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

Archive «
Launch Supplement «
Special Supplements «

Potential investment by local entrepreneurs as registered with the Board of Investment in the past six months till June 2007 has become almost half of the investments registered in the six months before that, between July and December 2006.
   The Board of Investment received domestic investment proposals worth Tk 12,968.6 crore in the first six months of the 2006-07 fiscal year against the following six months’ investment proposals amounting to Tk 6,689.5 crore, which was about 25 lower than investment projects of Tk 8,860.5 crore registered with the investment promotion agency during the January-June period of fiscal year 2005-06.
   Mahmudur Rahman, BoI’s former executive chairman, termed this an alarming and disappointing situation, the negative impact of which, he pointed out, would be felt at the end of the current fiscal year, leading to economic stagflation [slower growth with higher inflation].
   ‘Till date, this government has not been able to give the private sector the right signal to make investments,’ he said.
   Also, according to the latest official statistics, the foreign investment proposals to the BoI nosedived to Tk 11,925 crore in the 2006-07 fiscal year from Tk 24,986 crore of foreign investment proposals in the 2005-06 fiscal year.
   Overall, the registration of both local and foreign private sector investment projects fell by 27 per cent from Tk 43,355.99 crore to Tk 31,583.19 crore in the just-concluded 2006-07 fiscal year — a year which was marked by political turmoil and subsequent promulgation of the state of emergency.
   During this six-month period, the state-run Sonali Bank earmarked Tk 50 crore for funding 19 big and medium industrial units compared to Tk 237 crore for 245 enterprises in the entire calendar year of 2006. No such investment proposal was pending with Rupali Bank, which is awaiting privatisation, in the said six months while it financed 18 big and medium sized projects worth Tk 148 crore in 2006.
   A mid-ranking private banker said he usually dealt with a good number of investment proposals in recent years but now he was himself looking for investors to justify his salary. ‘The investors are generally shaky,’ he added.
   The worst month in terms of registration was March when the BoI received investment proposals worth Tk 341.88 crore, much lower than a minimum of Tk 1,000 crore investment projects registered on an average in the last two years.
   ‘It was the time when the crackdown began and both new and old entrepreneurs were panicked by the Rajuk’s drive to demolish many structures, including industrial units,’ explained an official of the BoI, describing the declining trend as an outcome of the state of emergency.
   When asked about the declining trends on Tuesday, the executive chairman of the BoI, Nazrul Islam, forecast that there would be an improvement in investment scenario when results of the current reforms were available.
   ‘Foreign investors are observing what is going on and some of them, especially the Chinese, are concerned about the political situation,’ he said, stressing the need for improving infrastructure and the taking of faster decisions on pending investment proposals such as $3 billion Tata investment project and also of Asia Energy.
   Nazrul mentioned that the government would be able to take decisions on foreign investment proposals soon after announcement of the coal policy. ‘The next one month will be very crucial in this regard,’ he said.
   Another official of the BoI predicted that the Bangladeshi investors would, in the near future, be crippled by the scarcity of land and problems in most of the utility services unless urgent steps were taken right now for promotion of local and foreign investment in industrial units.
   However, Mahmud, now the chief executive of a private enterprise, did not blame this government for the delay in taking decisions on the huge foreign investment proposals since it has inherited the customary trend of dilly-dallying.
   ‘This government has also inherited the most robust economy in Bangladesh’s history. But I am really concerned about the state of the economy after its departure if the current investment situation continues for another six months,’ he told New Age, forecasting a slowdown in the growth of the gross domestic product and shortfall in revenue earning as a result of the decline in investment.

The general index of the Dhaka Stock Exchange on Tuesday hit a new high at 2210.69 points due to rise in share prices of power, ICT and banking stocks.
   The benchmark index crossed 2100 points on June 25 and 2000 points on May 31 for the first time since its inception on November 27, 2001.
   On the day, the DSE general index gained 13.05 points or 0.59 per cent.
   A stock broker said increased participation of institutional and foreign portfolio investors pushed up the benchmark index to its new record high.
   He said the market was enjoying an upward trend since late April amid surplus liquidity position in the banking system.
   The DSE blue chips index, DSE20, however, lost 7.74 points or 0.41 per cent to close at 1872.41.
   Chittagong Stock Exchange’s selective categories index gained 16.73 points or 0.47 per cent to close at 3564.32 on Tuesday.
   The CSE blue chips index, CSE30, however, lost 12.57 points or 0.25 per cent to close at 4946.46.
   Losers, however, outnumbered the gainers on Tuesday. Of the total 218 issues traded on the DSE, 105 declined, 95 advanced and 18 remained unchanged.
   Of the total 111 issues traded on the CSE, 56 declined, 50 advanced and five remained unchanged.
   Turnover at the DSE also increased to Tk 185.58 crore from the Monday’s Tk 136.54 crore on the backlash of Tk 23.40 crore block market transactions.
   The CSE turnover also increased to Tk 24.23 crore from the Monday’s Tk 22.54 crore.
   Summit Power topped the turnover leaders at the DSE with total transaction of Tk 14.04 crore.
   Other turnover leaders at the prime bourse were Power Grid Company Bangladesh, Dhaka Electric Supply Company, BRAC Bank, Square Pharmaceuticals, AB Bank, Southeast Bank, Shahjalal Islami Bank, Agni Systems and Al-Arafah Islami Bank.

Insurance companies have the legal and moral obligation to settle genuine claims as soon as possible, said the finance adviser, AB Mirza Azizul Islam, on Tuesday.
   ‘Why do you need external pressure [to settle claims],’ he asked a workshop on contribution of insurance to Bangladesh economy at a city hotel.
   He was referring to certain claims that had remained pending for two to three years until 80 per cent of them to the tune of Tk 100 crore were settled on intervention of the chief controller of insurance four months ago.
   Mirza Aziz urged the Bangladesh Insurance Association to set a standard of corporate responsibility and the association members to comply with it.
   He also remarked that ‘soul-searching is needed to bring corporate good governance in the sector’.
   The adviser said merger of insurance companies was one way to bring down the
   cost of operations as the local market was not big enough for as many as 62 companies to operate in.
   He said he had taken an initiative to bring the insurance sector under the finance ministry from the commerce ministry and it would happen very soon.
   He hinted at a change soon in the top management of Sadharan Bima Corporation as the state-owned insurance company had been facing some problems.
   The chief controller of insurance, Mahfuzul Haque, said the insurance companies should go for credit rating for their own interests. ‘It is very important.’
   Anomalies were detected at a number of insurance companies during a recent physical inspection of all the 62 companies operating in the country, he told the workshop.
   ‘My office provided each of the companies with its evaluation report and advised it to comply with the recommendations made in it,’ the CCI said.
   Nizamuddin Ahmed, vice-president of Bangladesh Insurance Association, said more than 270 insurance claims worth about Tk 165 crore had been pending for years with the Sadharan Bima Corporation. He requested the finance adviser to look into the matter.
   A BIA executive committee member, Abdul Matlub Ahmad, presented the keynote at the workshop.
   The insurance sector earned over Tk 2,500 crore in gross premium and contributed Tk 111 crore to the exchequer in 2005, revealed the paper.
   About 8 lakh people are employed in the sector directly or indirectly, Matlub said.
   He urged the finance adviser to amend the insurance laws through an ordinance and bring the sector under the umbrella of finance ministry as soon as possible.
   In his presentation, Matlub said the corporate tax should be lowered to 15 per cent from the existing 45 per cent.
   He hoped that in the next five years the insurance sector would be able to generate a premium income of Tk 10,000 crore and make an investment of about Tk 12,000 crore and contribution around Tk 500 crore to the exchequer in value-added and other taxes.

The SEC has penalised 14 top officials of three companies and a brokerage house for breaching corporate laws, an official said Tuesday.
   The regulator fined each of the six senior officials of Chittagong Vegetables Oil Industries Tk 1 lakh. They are company chairman Shamsul Alam, managing director AHM Habibullah and directors Md Nazrul Alam, Md Amin, Md Emranul Haque and Md Mohsin Saki.
   ‘The company did not comply with the guidelines. We have also observed irregularities in its audited accounts,’ said Farhad Ahmed, executive director of SEC.
   According to the SEC, if a company fails to comply with regulator’s corporate governance guidelines, it is required to explain why. Chittagong Vegetables neither complied nor reported why it failed to follow the guidelines, Ahmed said.
   Four senior officials of Saleh Carpet were fined for non-submission of an audited financial statement for 2006. Each of the officials was given a penalty of Tk 1lakh.
   The SEC penalised Saleh Carpet’s chairperson Dilara Begum, managing director Shamim Ara and directors Rezaul Karim Chowdhury, Badrul Hoque and Ruhul Amin. Each was asked to pay Tk 1 lakh in 15 days.
   The same amount fine was also imposed on three top officials of Raspit Inc. The company failed to submit their half-yearly accounts for June-December of 2005 and 2006 and failed to hold annual general meetings for three years to 2006, Ahmed said.

Bangladesh Telecommunications Regulatory Commission chairman Manzurul Alam Tuesday urged the mobile phone operators in South Asia to assist the governments of their respective countries in fighting terrorism.
   ‘We should not overlook the security issues and the malicious use of telecommunications system,’ Manzur told the inaugural session of a two-day South Asia regional conference of mobile phone operators in Dhaka.
   Infroma, a consultancy and research firm in telecoms and media, organised the conference at Dhaka Sheraton Hotel in association with the South Asian GSM forum.
   Mobile phone operators and governments should work together in fighting terrorism in the region, Manzur said.
   ‘The BTRC is providing necessary assistance to Bangladeshi security agencies in curbing terrorist activities in the country,’ he told the session.
   Apart from security issues, the commission chairman also touched a number of other issues including competition in the market, frequency allocation, and licensing procedures.
   He said despite the phenomenal growth in the mobile phone sector in Bangladesh, a large number of people were still deprived of the basic telecommunications facilities, particularly in rural areas. ‘Around 90 per cent of the telephone connections in the country are in urban area.’
   The BTRC chairman said the commission was aware of the stiff competition prevailing in the telecoms sector and working on creating a level-playing field in the area.
   Manzur also said the commission was taking back unused frequencies from the telecom operators allocated injudiciously to them in the past.

The ministry of commerce on Tuesday suspended the election to the FBCCI executive committee for the 2007-09 term until further order.
   The FBCCI Election Board convened an emergency meeting immediately after receiving the order and decided to convey the suspension order to all the affiliated member-bodies of the apex trade body, said an Election Board statement.
   The suspension order was issued when the Election Board was receiving nomination papers for the election scheduled for August 16. The deadline for submission of nomination papers expired on Thursday.
   The commerce ministry has the authority to extend the tenure of the existing executive committee or appoint an administrator until a new executive committee is installed through election, a senior FBCCI executive told the news agency. The tenure of the present executive committee will expire on September 5.
   The Statutory Regulatory Order required for giving effect to the decision of restricting loan and tax defaulters from taking part in the FBCCI election has not been issued yet, FBCCI sources said. It’s now pending with the ministry of law for vetting.

The country settled import payments worth $15.9 billion in the last fiscal year, compared to $13.95 billion paid in the previous fiscal, central bank statistics show.
   Letters of credit for $17.36 billion were opened in FY2006-07 against $15.25 billion in the previous fiscal. In July–May of the last fiscal year, 22.26 lakh tonnes of rice and wheat worth $486 million were imported, compared to 23.68 lakh tonne worth $392 million imported in the same period of FY06.
   Edible oil importers settled L/Cs worth $563 million in FY07, against $449 million settled in FY06. L/Cs worth $359 million were settled for import of chemical fertilisers in the last fiscal year against $337 million settled in FY06.
   Traders settled L/Cs worth $97 million for milk food imports, $190 million for pulse imports, and $61 million for onion imports in FY07.

France won key EU backing Tuesday for former French finance minister Dominique Strauss-Kahn to lead the IMF despite British calls for a candidate from outside Europe.
   Paris secured a tentative victory just hours after French President Nicolas Sarkozy clashed in Brussels with finance ministers from the 13-nations sharing the euro on Monday over his controversial budget plans.
   ‘Dominique Strauss-Kahn became the Europeans’ candidate for the managing director of the IMF,’ new French Finance Minister Christine Lagarde told journalists on the margins of a meeting of EU finance ministers in Brussels.
   ‘That will allow him to start a campaign and consultation process with all the members of the IMF,’ she added.
   Strauss-Kahn said Tuesday in a statement: ‘I want to express warm thanks to the 27 (European Union members) for the confidence they have shown in me.’
   He also thanked Sarkozy and Luxembourg Prime Minister Jean-Claude Juncker in particular and added: ‘I am now going to work to convince the other concerned parties.’
   Poland had early Tuesday announced its support for a former Polish prime minister, Marek Belka, but ended up not pushing his candidacy as a broad majority emerged in favour of the Frenchman.
   The finance ministers scrambled to find a replacement for the current International Monetary Fund Managing Director Rodrigo Rato after the Spaniard’s surprise announcement late last month that he would step down in October.
   Under a long-standing and increasingly criticized gentleman’s agreement, Europe chooses the head of the IMF and the United States picks the president of the World Bank, the IMF’s sister institution.
   Developing countries for years have protested in vain against the tradition of Europeans running the IMF and Americans leading the World Bank and have called for open competition for both posts.
   British finance minister Alistair Darling said: ‘I think that Dominique Strauss-Kahn would be a very credible candidate, but the British government wants to see what other candidates there may be put forward from other parts of the IMF.’
   In response to Britain’s concerns, Lagarde said ‘we are very attentive ... (to) the question of balance and respecting emerging countries.’
   With the looming deadline of October to find a candidate, the ministers felt rushed to decide on a European for the IMF, said Portuguese Finance Minister Fernando Teixeira dos Santos, whose country holds the EU’s presidency.
   ‘The fact is that circumstances being what they were we felt it was very important to get a candidacy as quickly as possible and so we felt that we couldn’t get an ideal procedure on this occasion,’ he told journalists.
   Sarkozy, a conservative, had lobbied hard to secure the IMF’s top seat for Strauss-Kahn, who was finance minister in the government of former prime minister Lionel Jospin from 1997-1999 and is a heavyweight in Socialist Party.
   But three Frenchmen have held the job for more than 30 of the IMF’s 61 years, and the French also currently head the World Trade Organisation, the European Central Bank and European Bank for Reconstruction and Development.
   Despite a relatively easy victory over the IMF head, Sarkozy faced a rougher ride Monday night with eurozone finance ministers when he sought to reassure them about plans to push back France’s target for balancing the state accounts.
   Although all 13-nations sharing the euro committed in April to balance their books by 2010, Sarkozy has warned that France may need until 2012 while he shakes up the economy with pro-growth reforms.
   But while the ministers welcomed Sarkozy’s pledge to reform the French economy, they gave a cautious reaction to his call for more flexibility on Paris’s fiscal targets.
   In the face of their concerns, Sarkozy promised he would ‘do everything’ to meet the 2010 deadline, but also called for some slack if that proved impossible.

The Bank of Canada on Tuesday hiked its key lending rate by 0.25 per centage points to 4.5 per cent, hoping to quell mounting inflationary pressures with its first rate increase in a year.
   And another rate increase is likely in the coming months as the central bank moves to cool a red-hot economy, it said.
   ‘Economic growth and inflation in Canada in the first half of this year have been stronger than expected,’ the central bank said in a statement.
   As well, the bank said ‘the economy is now operating further above its production potential than was projected’ while inflation has been ‘higher than projected,’ and above its 2.0 per cent target.
   Against this backdrop, the Canadian dollar has ‘appreciated sharply,’ surging to a 30-year high and nearing parity with the US greenback, the bank noted. And Canada’s jobless rate has remained steady at 6.1 per cent.
   The Bank of Canada had kept its overnight interest rate unchanged since July 2006 after seven consecutive rate hikes.
   On Tuesday, it stated that more interest rate increases loom, saying: ‘some modest further increase in the overnight rate may be required to bring inflation back to the (2.0 per cent) target over the medium term.’
   With the Canadian economy now projected to grow by 2.5 per cent in 2007 or ‘somewhat stronger than was expected’ and ‘somewhat more slowly than previously projected’ in 2008 and 2009, inflation is likely to remain ‘slightly higher and more persistent’ than projected, until 2009, it said.
   In this new projection, ‘higher interest rates across the yield curve and a higher assumed range for the Canadian dollar of 93 to 95.5 cents US’ would act to moderate growth in 2008 and 2009 to an average of about 2 ½ per cent, the bank said.

Singapore’s economy picked up sharply in the second quarter, beating forecasts with a blistering 8.2 per cent gain after an already strong 6.4 per cent in the three months to March, official figures showed Tuesday.
   Contributing to the growth was an ‘astonishing’ 17.9 per cent expansion in the construction sector, the fastest in almost a decade, DBS Group Research said in a report.
   Economists had estimated 6.2-7.7 per cent Gross Domestic Product growth for the second quarter.
   On a quarter-on-quarter, seasonally adjusted annualised basis, GDP, the value of all goods and services produced in the country, grew 12.8 per cent after 8.5 per cent in the first three months of the year, the Ministry of Trade and Industry said.
   GDP grew 6.6 per cent year-on-year in the fourth quarter of last year, official figures show.
   ‘The Singapore economy registered strong growth in the second quarter of 2007,’ the ministry said.
   The data helped boost the local bourse to a record intraday high of 3,653.27 points in morning trade before the Straits Times Index fell back on late profit-taking to close at 3,620.32.
   ‘With the strong growth, all around, stocks should get a nice little lift,’ CIMB-GK research head Song Seng Wun said.
   Growth in the manufacturing sector jumped sharply to 10.2 per cent, led by biomedicals and transport engineering, which includes oil rigs and ships, from 4.4 per cent in the first quarter.
   The ministry said construction grew 17.9 per cent, up from 11.6 per cent in the first three months of the year.
   ‘Construction of the two integrated resorts and a healthy slew of private residential projects arising from the current property market boom have certainly boosted the sector,’ DBS said.
   The integrated resorts are multi-billion dollar casino, entertainment and convention complexes, due to open by 2010.
   Services slowed slightly to 7.0 per cent from 7.2 per cent but the trade and industry ministry called the performance ‘healthy.’
   The figures are advance estimates for real GDP - growth adjusted for inflation - and computed largely from April and May data. More detailed figures will be released in August.
   ‘Basically, these are all-round strong numbers,’ said Song, who upgraded his full-year GDP projection to 7.5 per cent from 6.6 per cent.
   ‘Barring any sort of nasty surprises from the pharma sector in the second half, manufacturing should do reasonably well since we expect high technology to be a smaller drag,’ Song said.
   DBS said manufacturing growth was better than expected after a ‘dismal’ first quarter, with the sector dragged down by weakness in global electronics demand.
   The bank’s analysts said they were revising upwards their 2007 growth forecast to 7.3 per cent from 6.3 per cent.

Sears Holdings Corp on Tuesday forecast lower quarterly profit and admitted that it needs to become more relevant to consumers and control its costs, sending its shares down more than 7 per cent.
   The company, which is controlled by hedge fund manager Edward Lampert and runs the Sears and Kmart chains, also said its board had approved the repurchase of up to an additional $1 billion of common stock.
   Sales at Kmart stores open at least one year fell 3.9 per cent in the first nine weeks of the 13-week second quarter, with declines across most categories at the discount chain.
   Same-store sales fell 4 per cent at U.S. Sears stores, with declines across most categories, although demand for women’s apparel and footwear improved.
   At those stores, comparable-store sales of home appliances fell more sharply than most other categories did, but the decline was not as steep as it was in the first quarter.
   The company reported results for the nine weeks ended on July 7. The second quarter ends on August 4.
   The bleak outlook from Sears came the same day that Home Depot Inc forecast a deeper profit drop for 2007.
   ‘Although we believe our business has suffered from many of the same factors that have led other retailers to announce disappointing results and lowered expectations, our recent performance underscores our ongoing need to become more relevant to consumers while improving our discipline around expense management,’ Sears Holdings Chief Executive Aylwin Lewis said in a statement.
   Should the sales trends continue, Sears Holdings said it expected quarterly profit of $160 million to $200 million, or $1.06 to $1.32 a share, including special items.
   Excluding an after-tax gain of about $12 million from bankruptcy-related settlements and total return swap investing activities, Sears expects to earn 98 cents to $1.24 per share.
   On that basis, the analysts’ average forecast was $2.12 per share, according to Reuters Estimates.
   In last year’s second quarter, Sears earned $294 million, or $1.88 a share. Excluding a gain, it earned $272 million, or $1.74 per share, in that period.
   Sears said it expected to end the second quarter with about $2.8 billion in cash and cash equivalents, excluding Sears Canada, down from $3.1 billion at the end of the first quarter. Investors watch the cash closely because Sears has given Lampert authority to invest excess money as he sees fit.
   The new $1 billion share repurchase authorization is in addition to the $121 million worth of shares still available for repurchase under an existing program. Sears said it had bought back about 13.8 million shares for $1.9 billion since the repurchase plan was approved in the third quarter of fiscal 2005.

BHP Billiton Plc, the world’s biggest miner, is in talks with private equity firms to team up for a possible 40 billion dollar bid for US aluminum company Alcoa Inc, the Times said on Tuesday.
   The UK newspaper, citing unnamed sources close to the company, said BHP’s favored partner was the Blackstone Group, which had employed Paul O’Neill, former United States treasury secretary and chief executive of Alcoa from 1987 to 1999, as one of its special advisers.
   Sources familiar with the matter told Reuters last month that BHP had appointed investment bank Merrill Lynch, which is the subject of a 28.7 billion dollar hostile bid from Alcoa.
   The Times said Alcoa was BHP’s preferred target, but it was unwilling to pay a premium for assets that it does not want to retain and so wanted to team up with a bid partner.
   BHP, which Credit Suisse sees showing a record A$13.6 billion after tax profit in fiscal 2007, could probably manage the funding of a takeover of Alcoa Inc. and Alcoa’s 60 per cent-owned Alumina Ltd of Australia, according to analysts.
   Newly-named chief executive Marius Kloppers, who takes over from Chip Goodyear in October, last week told analysts in Australia he will be looking for opportunistic acquisitions.
   With the added benefit of strong revenues from its oil and gas assets in Europe, Australia and the Gulf of Mexico, BHP is seen able to pay cash for its share of a joint bid with Blackstone.
   Blackstone has showed no signs of slowing down its buying spree, last week agreeing to pay $26 billion in cash for Hilton Hotels Corp.
   Another potential Alcoa bidder often mentioned, Rio Tinto Ltd is seen as more likely to employ scrip to avert a potential liquidity crunch.
   Rio has refused to comment on media reports it had hired Credit Suisse and JP Morgan to explore potential acquisition targets in mining.
   A takeover of Alcoa would be among the biggest deals in the sector this year, and would dwarf BHP’s $7 billion-plus acquisition of WMC Resources in 2005.
   Rio Tinto, which turns out nearly one million tons of aluminum via its Comalco smelters in Australia and New Zealand, last week said it would spend $1.8 billion expanding alumina-refining capacity in Australia. It also is helping fund plans to build a giant smelter in Abu Dhabi in the United Arab Emirates.
   In Australian trade on Tuesday, Rio closed 0.1 percent up A$103.49, while BHP fell 1 per cent to A$38.46.

EU economic and monetary affairs commissioner Joaquin Almunia urged France on Tuesday to shake up its economy with a stiff dose of reforms and improve its finances at the same time.
   Speaking a day after French president Nicolas Sarkozy warned that France might need extra time to stamp out its deficit, Almunia told journalists: ‘Budget consolidation and reform are not irreconciliable, they go hand in hand.’
   Almunia said EU finance ministers told Sarkozy on Monday when he attended their monthly meeting that ‘you cannot achieve growth unless you maintain budgetary discipline and rigour.’
   True to his image as a whirlwind of activity, the newly-elected rightwing leader tried to take Paris’ eurozone partners by storm with the unusual move of inviting himself to the ministers’ dinner meeting to outline his budget plans.
   Although all 13-nations sharing the euro committed in April to balance their books by 2010, Sarkozy has warned since he was elected in May that France may need until 2012 so that he can jolt the French economy with a growth ‘shock.’
   ‘I’ll do everything to be there in 2010 depending on growth and devoting the receipts due to growth to the reduction of the deficit,’ Sarkozy told journalists after the meeting on Monday.
   ‘If we’re not there in 2010, we’ll be there in 2012 and I’ll be the first to regret it,’ he added.

The European Union has called for the complete elimination of tariffs in its proposal to South Korea before a second round of free trade negotiations, officials said Tuesday.
   ‘The EU’s initial tariff offer is much higher than we previously anticipated,’ deputy trade minister Kim Han-Soo told Yonhap news agency.
   The EU offered to eliminate or phase out tariffs on 100 per cent of goods within seven years, while South Korea proposed to eliminate or phase out tariffs on 80 per cent within three years, he said.
   South Korea suggested that rice be excluded from any deal, he said. Rice was excluded from a free trade deal signed by Seoul and Washington on June 30, which awaits approval by the legislatures of both countries.
   Asia’s third largest economy and the world’s biggest trading bloc began talks in May and will hold a second round starting July 16 in Brussels.
   At the first round in Seoul both sides agreed in principle to scrap about 95 per cent of each other’s tariffs on merchandise. South Korea’s average tariff is 11.2 per cent compared to the EU’s 4.2 per cent.
   The EU was South
   Korea’s second largest trading partner after China last year, with trade reaching 78.56 billion dollars. It is the biggest single foreign investor, committing 4.97 billion dollars last year alone.
   South Korea wants to gain more access to the EU market for auto parts, electronics and textiles. The EU wants Seoul to remove barriers on automobiles, pharmaceuticals, chemicals and cosmetics.
   South Korea also proposed that the deal should include goods made at a Seoul-funded industrial park in the North’s border city of Kaesong, he said.
   Seoul has failed to persuade Washington to include goods from Kaesong in the free trade deal.
   Meanwhile, a group of nine South Korean legislators left for Washington Tuesday to muster support for the pact amid concerns that the US Congress may not approve it.
   Some Democratic lawmakers have vowed to vote against the pact unless it is amended to lower South Korea’s non-tariff barriers especially in the auto industry.
   A forum with US representatives will take place on Wednesday, followed by meetings with Christopher Hill, US assistant secretary of state for East Asian and Pacific affairs, and US deputy trade representative Karan Bhatia, Yonhap news agency said.

North Korea has cancelled foreign visits to a Seoul-funded industrial estate amid rumours that its leader Kim Jong-Il might soon visit the complex, officials and media reports said Tuesday.
   The South’s unification ministry said North Korea gave no reason for its sudden decision to postpone a planned trip Tuesday by 100 South Korean officials and reporters and another by 160 businessmen on Wednesday.
   The industrial estate, just north of the heavily fortified border, aims to educate the communist state about the market economy. South Korean companies produce goods there using cheap but skilled local workers.
   The trip cancellations sparked rumours that Kim may soon visit the complex, according to Yonhap news agency. ‘The North has requested the postponement of the visit, without specifying reasons,’ Unification Ministry spokesman Kim Nam-Sik told reporters, without commenting on speculation of Kim Jong-Il’s visit.

Ministers and officials from the world’s least developed countries met in Istanbul Monday to discuss the impacts of globalisation on their communities and ways of integrating with the global economy.
   At the opening ceremony of the two-day conference, Turkish foreign minister Abdullah Gul called on the international community to fulfill its commitments of assistance to help the development of the poorest nations of the world.
   ‘We must redress the imbalances of the international economic system. In some cases, that requires financial resources. In many others, what is needed is a political will that responds to the concerns of the least developed countries,’ Gul told the gathering.
   ‘Turkey will continue to do its best to be the voice of the least developed countries where they are not represented to better reflect their concerns,’ he added.
   The Istanbul conference was proposed by Gul and organised by several UN agencies, among them the UN Development Programme and the Food and Agriculture Organization.
   Among the participants are UNDP administrator Kemal Dervis, FAO director-general Jacques Diouf and representatives of the world’s poorest nations, including 27 ministers.
   Turkey is hosting the meeting as part of its vision to foster closer ties with African countries and to seek the support of attending countries to its bid for a non-permanent seat on the UN Security Council in the 2009-2010 period.
   According to UN-set criteria, 50 countries qualify as the world’s least developed nations, compared to 25 in 1971.

China’s trade surplus soared 85.5 per cent to hit an all-time high in June, official data showed Tuesday, setting the stage for an enormous full-year figure that is sure to inflame tensions with the United States and Europe.
   The surplus hit a monthly record of 26.91 billion dollars as exporters rushed to beat new curbs that went into place on July 1.
   Exports for June totalled 103.27 billion dollars and imports were 76.36 billion dollars, the customs administration said in a statement on its website.
   China posted a trade surplus of 112.53 billion dollars in the first six months of 2007 it said, without giving comparative data.
   But based on previously released figures, the June surplus was 85.5 per cent higher than the same month last year and the six-month figure was 83.1 per cent larger than the corresponding period in 2006.
   The June surplus far exceeded the previous monthly record high of 23.83 billion dollars set in October last year.
   Although the June figure was partly due to businesses rushing to beat the new curbs on exports, analysts said China would inevitably come under more global pressure as the surplus ballooned throughout the rest of the year.
   China’s top economic planning said in May that the trade surplus was likely to hit 250-300 billion dollars in 2007, up from a record 177.5 billion dollars last year and a massive increase from 31.98 billion dollars in 2004.
   The surplus has been a constant source of friction with its major trading partners, mainly the United States and the European Union. Beijing has been routinely accused of keeping the Chinese currency artificially low to make its goods cheaper, giving its exporters an unfair competitive edge.
   ‘This level of trade surplus is unprecedented for China or any other major economy in the world,’ Goldman Sachs economist Hong Liang said.
   ‘This again highlights the ineffectiveness of the policy tinkerings that have so far failed to tackle the root cause of China’s bloating trade surplus: the significantly undervalued currency.’
   Last month China escaped being branded a currency manipulator in a US Treasury report. If it had been so accused, then the Asia giant would have become subject to a legal process that can trigger sanctions under US law.
   US lawmakers critical of China’s trade and foreign exchange policies have in the meantime also unveiled legislation that could make it easier to impose sanctions on Beijing.
   Ping A Securities analyst Sun Fanghong agreed that the larger surplus would again pressure the currency but was unlikely to affect Beijing’s stated policy of maintaining the slow but steady rise of the yuan. ‘The surplus absolutely will impact the yuan’s appreciation but I don’t think the Chinese government will change its slow and steady pace of adjustment easily,’ she said.
   A senior analyst at the customs administration said last week that one of the reasons for the then anticipated June rise was that manufacturers had rushed to ship orders before the end of export tax rebates on July 1.
   The government announced on June 19 that it would cut or remove export tax rebates for 2,831 commodities, or a third of total exports, from the beginning of this month in another effort to bring some balance to the trade account.

Japan’s government denied Tuesday that US fund Steel Partners’ defeat in a high-profile legal battle over ‘poison pill’ takeover defences would shake the confidence of foreign investors.
   ‘It is impossible to imagine a feeling of revulsion arising among foreign funds’ towards Japan, financial services minister Yuji Yamamoto said in the wake of Monday’s high court ruling in favour of Bull-Dog Sauce Co.
   The Tokyo High Court turned down a request by Steel Partners for an injunction to stop Bull-Dog from adopting a poison pill-style takeover defence that would dilute the US fund’s stake in the condiment maker.
   The court battle was seen as a test case on the legality of poison pills, which are becoming increasingly popular here as firms look to guard themselves against foreign takeovers as Japan gradually opens up its economy.
   Steel Partners’ head Warren Lichtenstein has previously warned that Bull-Dog’s scheme would weaken international faith in the integrity of Japan’s capital markets and deter investment in Japanese companies.
   But Yamamoto said the Steel Partners’ buyout bid for Bull-Dog was just one out of many cases of investor activity in Japan.
   The high court decision clears the way for Bull-Dog Sauce to become the first Japanese company to use such a poison pill aimed at diluting a bidder’s stake by issuing new shares to other shareholders.
   The condiment maker, whose shareholders have overwhelmingly backed the scheme, said last week it planned to issue equity warrants this Wednesday to dilute Steel Partners’ stake to 2.86 per cent from 10.52 per cent currently.
   Steel Partners could file another appeal with the Supreme Court but it would be impossible for a ruling to be made before Wednesday.

Construction work will begin next year on a much-anticipated pipeline to deliver crude oil directly from Siberia to China, Russia’s energy minister said Monday, according to news reports.
   Speaking in Beijing, energy minister Viktor Khristenko said the first payment for the Chinese branch of a trunk pipeline that links Siberia to Russia’s east coast was received in June, paving the way for construction work to begin.
   ‘Construction will begin when the design work is complete,’ Khristenko was quoted by the Interfax and RIA Novosti news agencies as saying.
   ‘Under the contact this should be completed within 208 days after the first payment is made by the Chinese side to finance the project,’ said Khristenko, who is in Beijing for talks with Chinese officials on energy cooperation.
   ‘The first tranche was received from the Chinese side in June, 2007,’ he said.
   No decision had yet been made on whether the initial 30 million tonnes annual capacity of the Chinese pipeline would eventually be expanded, Khristenko said, but added that he was ‘more optimistic than pessimistic’ that this would happen, according to an Interfax report.
   China is anxious to secure as much Russian oil as possible to help it increase energy supplies needed to sustain its booming economy and ease its dependency on oil from the volatile Middle East region.
   Russia in 2003 opted against a plan to build a single pipeline directly to China, choosing instead a 2,500-mile route that skirted China and remained entirely inside Russian territory all the way to the Pacific port of Nakhodka opposite Japan.
   Since then, the two countries have been discussing building a branch off that main route to China’s oil capital Daqing.

Japan said Tuesday it had doubled the amount of foreign currency reserves it makes available to Thailand to shield against a possible financial crisis.
   Under the bilateral arrangement, Japan will now offer up to six billion dollars from its foreign exchange reserves to Thailand in the event of a currency crisis, a finance ministry statement said.
   Previously it had made up to three billion dollars available in exchange for Thai baht.
   Thailand for its part will continue to provide up to three billion dollars to Japan in exchange for Japanese yen if needed.
   The pact is part of the Chiang Mai Initiative of bilateral currency swaps set up by Southeast Asian nations plus Japan, China and South Korea in May 2000 as part of efforts to prevent a repeat of the 1997 East Asian financial crisis.
   The regional meltdown began in July 1997 when Thailand was forced to abandon its fixed exchange rate after coming under massive speculative pressure.

South Korea’s push for free trade agreements is aimed at strengthening its economy so it can one day meet the huge financial cost of unification with North Korea, the trade minister said Tuesday.
   ‘As you know, reunification needs astronomical amounts of money,’ Kim Hyun-Chong said in a speech.
   ‘The purpose of FTAs is aimed at increasing national wealth through reform and market-opening and eventually helping fund the huge unification cost.
   ‘That should be our objective ... and one day, I believe South and North Korea will be reunited,’ he told a forum hosted by the Korean Federation of Industries.
   The governments of both countries, which have been divided since 1945, are publicly committed to unification.
   But per capita output in the capitalist South is some 13 times higher than in the communist North, according to US Central Intelligence Agency estimates, and unification would cost tens to hundreds of billions of dollars.
   South Korea on June 30 signed an FTA with the United States which must be approved by the legislatures of both countries. It has similar pacts in force with Chile, Singapore, the 10-member Association of Southeast Asian Nations excluding Thailand, and the European Free Trade Association.
   It is also in negotiations with the European Union and Canada.
   ‘If history is any guide, no country will succeed with its market closed,’ Kim said, according to Yonhap news agency.
   The two Koreas have remained technically at war since the 1950-53 conflict ended in an armistice instead of a peace treaty but economic cooperation has greatly increased following a 2000 summit.

The dollar was steady against the yen in Asian trade Tuesday as the market waited for a speech by US Federal Reserve chief Ben Bernanke and an upcoming Japanese interest rate decision, dealers said.
   The Japanese currency gained on the euro, bouncing off an all-time low as players locked in some gains from the single currency’s ascent.
   The dollar was flat at 123.37 yen in Tokyo afternoon trade, unchanged from levels in New York late on Monday.
   The euro slipped to 1.3603 dollars after 1.3625 and to 167.74 yen from 168.11, pulling back from Monday’s record high of 168.51.
   The market was waiting for Bernanke speech’s for a fresh lead on the central bank’s assessment of the outlook for US economic growth and inflation.
   ‘With the US economy recovering slightly recent employment data, players will be watching to see how hawkish he will be on inflation and growth,’ said Saburo Matsumoto, chief forex strategist at Sumitomo Trust Bank.
   The United States added 132,000 jobs in June, slightly more than expected, the US government said Friday, and the two previous months’ job gains figures were revised sharply upward.
   The yen has come under renewed pressure as players bet that the Bank of Japan will not raise interest rates from 0.5 per cent on Thursday.
   Instead the market will be focusing on a remarks from BoJ governor Toshihiko Fukui at a press conference after the meeting to see if he will give any signals to support market expectations of a hike in August or September.
   A robust report released Monday on Japanese machinery orders, as a key leading indicator of corporate capital spending, was seen as supporting the case for a quarter point BoJ rate hike to 0.75 per cent.
   Japan has one of the lowest interest rates in the world, prompting Japanese investors to put their money into higher-yielding currencies like the euro and the British pound.
   ‘The possibility of an August rate hike is high,’ said Matsumoto.
   ‘The second-quarter growth figures due in August will be key to determining whether the BoJ will raise rates,’ he added.

Oil prices were easier in Asian trade Tuesday after rising sharply overnight following a warning of a looming supply crunch from the IEA, dealers said.
   They said the market was also waiting for the US government’s regular weekly report on energy inventories due out on Wednesday.
   At 1:33 pm, New York’s main contract, light sweet crude for August delivery, was nine cents lower at 72.10 US dollars a barrel from 72.19 dollars in late US trades Monday.
   Brent North Sea crude for August delivery fell 35 cents to 75.43 dollars.
   Oil prices have been edging closer to last summer’s all-time record highs of 78.64 dollars per barrel in London and 78.40 dollars in New York, and the International Energy Agency on Monday added to the bullish outlook.
   It warned that the Organisation of the Petroleum Exporting Countries’spare production capacity would shrink to bare-bones levels by 2012 amid robust economic growth, particularly in Asia and the Middle East.

Trade
   Maq Enterprises
   Trading of the shares of the company will remain halted for market enquiry by the DSE Management.
   Lexco
   Trading of the shares of the company will also be allowed in spot market from July 11 to 18 as book closure will start from July 20.
   
   Transaction
   NCC Bank
   Aslam-ul-Karim, one of the directors of the bank, has reported his intention to sell 5,000 shares out of his total holdings of 1,95,946 shares of the bank while Abdus Salam, another director of the bank has reported his intention to buy 5,000 shares of the bank at prevailing market price through stock exchange within next 30 working days.
   
   Response to DSE query
   LAFARGE SURMA CEMENT LTD
   In response to a DSE query, the company has informed that central empowered committee of the Supreme Court, New Delhi, has directed the Ministry of Environment and Forest, New Delhi to expeditiously process the forest clearance application in order for the committee to place its recommendation to the Supreme Court Forest Bench by mid August 2007.
   Maq Paper
   In response to a DSE query, the company has informed that there is no undisclosed price sensitive information of the company for recent unusual price hike. DSE record shows that as per un-audited half yearly accounts as on June 30, 2006, the company has reported net loss of Tk 9.42m with EPS of Tk 7.85 as against last year’s half yearly of Tk 15.96m and Tk 13.30 respectively. Moreover, accumulated loss of the company was Tk 147.75m as on June 30, 2006.
   Maq Enterprises
   In response to a DSE query, the company has informed that there is no undisclosed price sensitive information of the company for recent unusual price hike. DSE record shows that as per un-audited half yearly accounts as on December 31, 2006, the company has reported net loss of Tk 5.63m with EPS of Tk 2.25 as against last year’s half yearly of Tk 5.51m and Tk 2.21 respectively. Moreover, the company has reported accumulated loss of Tk 189.41m as on December 31, 2006.
   Source: DSE, CSE

Honda keen to invest $1b in sugar industry, power generation
Japanese industrial giant Honda Denki Co Ltd has expressed its keen interest to invest 1 billion dollars in Bangladesh’s power, energy and sugar sectors. The investment offer came when president the Japanese firm Shin-ichi Honda met Industries adviser Geetiara Safiya Chowdhury at her office on Tuesday. Bio-ethanol project manager Salem Monem was present on the occasion. During the meeting, Shin-ichi said his company wants to invest in power generation and environment-friendly alternative energy Bio-ethanol projects. He said his firm is also interested to provide pure drinking water to the poor and finance housing projects. Shin-ichi informed the adviser that the Japanese industrial giant is also keen to extend its cooperation to the country’s sugar mills in boosting production through providing training to the farmers, distributing high-yielding seeds and offering modern technologies. He sought cooperation of the Bangladesh government in implementing the projects. The adviser said the bio-ethanol project could play an important role in developing sugar industries.
— UNB

India, Russia to set up task force on trade
India and Russia will set up a joint task force to boost bilateral trade to a level of 10 billion dollars by 2010 from the present two billion dollars, a senior official of the Indian government has said. The JTF would be set up by the end of this year when prime minister Manmohan Singh visits Moscow for summit talks with president Vladimir Putin, commerce secretary GK Pillai said at a meeting of Joint Study Group on economic cooperation in Moscow. The JSG was instituted to identify the bottlenecks in tapping the potential of bilateral economic cooperation and trade. According to Pillai, the proposed task force would monitor implementations of recommendations, covering goods, services and investments, as given in a 150-page report prepared by the JSG. JTF would be a time-bound mechanism with the final goal of signing comprehensive economic cooperation agreement and free trade agreement with Russia, once it joins WTO, Pillai told reporters.
— PTI