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Banking on its business competitiveness and inherent potentials, Bangladesh promises huge investment opportunities in burgeoning sectors such as pharmaceutical, capital market and infrastructures including power and port, concluded an international conference on Friday.
   The capital requirement of the country’s power and energy sectors alone is $5 billion to $10 billion to meet the immediate demand for some 5,000 megawatt electricity and a planned deep seaport needs another $1 billion, said Dhaka Stock Exchange chief executive officer Salauddin A Khan.
   An overseas participant said to New Age that Bangladesh should build necessary physical infrastructures and improve regulatory regime including the one in the capital market, ensure quality education, and take initiative to capitalise on the expertise of the Bangladeshi diaspora to ‘really shine’ in the coming years.
   ‘Bangladesh has to be Bangladesh, not India or China. It can achieve over 10 per growth in GDP (gross domestic product) using all its potentials,’ he said when asked about the outcome of the conference on ‘Bangladesh: The New Investment Frontier’.
   Dusan Dujmic, an executive of a European investment banking securities trading company, said that they had come to see opportunities in Bangladesh and were impressed by the potentials here.
   Top executives of a number of local pharmaceutical companies said on the final day of the conference that Bangladesh could offer tremendous opportunities for foreign investors to develop products and carry out reverse engineering.
   They added that global players could take advantage of the trade-related intellectual property rights of the World Trade Organisation that has given least developed countries certain additional facilities till 2016.
   Syed S Kaiser Kabir, managing director of Renata, mentioned that two Bangladeshi companies had got accreditation with the medicines and healthcare regulatory agency in a European country and seven more were under the process of securing certification for their higher standards in producing world class medicines.
   ‘Bangladesh is a source of opportunities that the global pharmaceutical companies are looking for. We have all the competitiveness,’ Abdul Muktadir, managing director of Incepta, said presiding over a session on pharmaceuticals at the conference.
   Explaining the real potentials of the capital market, the Dhaka Stock Exchange chief executive told another session that eight large profitable government enterprises were going to be listed in next three to six months under direct listing method to add value worth $1 billion. The telecommunications giants in Bangladesh are also finalising their initial public offerings (IPO), he informed.
   About further development of capital market, Salauddin said that all major infrastructure companies, especially those in power, telecommunications and energy sectors, are to be listed to broaden the market depth. The country’s prime bourse expects its market capitalisation to grow to at least $15 billion by 2009 with average daily turnover rising to a level of $70 to $100 million in two years from current level of $10 million to $15 million.
   In Bangladesh, total issued capital of all listed securities would stand at $2.24 billion and market capitalisation at $5.96 billion, he informed the gathering at the Dhaka Sheraton Hotel.
   Mamun Rashid, chief executive officer of Citigroup in Bangladesh, described as a highly successful one the conference which was jointly organised Citigroup NA and the Dhaka Stock Exchange and Chittagong Stock Exchange.

Indian inflation eased by a tenth of a percentage point to 5.66 per cent but remained above the central bank’s target of five per cent, according to official data released on Friday.
   The wholesale price index, India’s most closely watched cost of living monitor, showed inflation at 5.66 per cent for the week ended April 28, down from 5.77 per cent the previous week,
   Inflation, which a year earlier stood at 3.90 per cent, has emerged as a key political issue in the country of 1.1 billion people where rising prices put a huge strain on the budgets of the hundreds of millions of poor.
   Prices of food staples such as barley, poultry, sugar and wheat all fell, the data showed. But prices of milk and some other foods were up.
   The Reserve Bank of India, the central bank, has warned of signs of overheating in the fast-growing economy and has introduced a slew of monetary tightening measures in recent months to curb inflation.
   It is aiming for inflation of 5.0 per cent during this financial year to March 2008 and wants the rate to fall to 4.0 to 4.5 per cent in the medium-term.
   The RBI has raised short-term lending rates twice this year, by a quarter of a per cent each time to 7.75 per cent — the highest level in more than four years — to contain inflation.
   Economists have said they expect inflation to ease in coming weeks against a backdrop of slowing global and domestic economic growth.
   India’s economy is estimated to have grown by 9.2 per cent in 2006-07.
   The RBI forecast growth would slow to 8.5 per cent this year because of the steps taken since late 2004 to cool the economy.

In an effort to attract investments from abroad, the Madhya Pradesh government of India will organise a two-day Global Investors Meet in Bhopal from October 26, state chief minister Shivraj Singh Chauhan has said.
   Chauhan, who was in the British capital to extend a personal invitation to the businesses interested in investing in the mineral-rich state, said those attending the meet from abroad would be treated as ‘State Guests’ and their boarding and lodging will be taken care of by the government.
   Infrastructure, agro-processing, automobiles, IT, and development of tourist spots were some of the areas where the state is expecting investments from abroad, Chauhan told the media last night.
   He also held an interactive session with potential investors at the India House, organised by the High Commission. Chauhan said Madhya Pradesh had developed a ‘single table’ clearance for all investment projects.
   The chief minister also said the state possesses abundant skilled manpower, electricity, water and historic tourist spots and investors failing to invest now would regret it after five years.
   OP Rawat, principal secretary to the MP government, Dept of Commerce, Industry and Employment, told PTI that after the last visit by a previous delegation, the state had attracted Rs 11,000 crore from the US and

The revenue of mobile phone operator AkTel in the January-March quarter decreased by 3 per cent to Tk 340 crore from that in the preceding quarter due to a lower retail tariff and revision of interconnection charge, reported AkTel’s parent company, Telekom Malaysia.
   Telekom Malaysia owns 70 per cent stakes in AkTel, the second largest mobile phone operator in Bangladesh, and AK Khan and Sons of Bangladesh owns the remaining 30 per cent shares.
   The Q1 report released Tuesday, however, said the year-on-year profit of the company rose by 26 per cent in the quarter from Tk 270 crore posted in the same period last year.
   Its profit after tax also rose to Tk 89.5 crore in the quarter from Tk 73.6 crore a year ago, the report said.
   At the end of Q1, 2007, AkTel’s subscriber base expanded to 6.3 million from 3.1 million in Q1, 2006 and 5.8 million in Q4, 2006.
   The report said the company was facing challenges in Bangladesh because of uncertainty about policy and regulatory decisions stemming from leadership changes.

Sri Lanka plans to buy 60 million dollars worth of locomotives and passenger coaches from China to modernise its Victorian-era network, the state-owned railway announced on Friday.
   Sri Lanka Railways is purchasing 100 carriages and 15 diesel-powered locomotives, technical manager PP Wijesekera told AFP.
   China’s Exxim Bank will fund the purchases with a lending agreement due to be signed between Colombo and
   Beijing shortly, officials said.
   The railway official said the railways’ rolling stock is in desperate need of modernisation.
   ‘We last bought about 150 carriages from Romania in 1992,’ Wijesekera told AFP. It purchased 15 engines from China in 2000.
   Delivery of the locomotives and coaches was expected to start in August.
   Sri Lanka Railways was built in 1864 by the British to transport tea, coffee, rubber, cinnamon and other spices from the hilly interior to Colombo for export.
   It moves 300,000 passengers daily on 324 trains between 320 stations across the island of 19.5 million people.
   Over the years the railway, which employs 17,000 workers, has lost market share to road transport as a lack of investment has diminished its speed and reliability.
   The railway makes revenues of around three billion rupees ($27.78m), but has not made a profit since 1943 and needs a state subsidy of seven billion rupees to survive, according to central bank figures.

Thailand finance minister Friday called on the Bank of Thailand to further reduce interest rates at its monetary policy meeting later this month to spur the sluggish economy.
   ‘I think that monetary policy could be eased further, and that interest rates could be further cut given that the inflation will remain relatively low,’ finance minister Chalongphob Sussangkarn told an economic seminar.
   ‘But how deeply the rate should be cut is for the Monetary Policy Committee to decide,’ he said.
   The Bank of Thailand has already slashed interest rates three times this year, most recently by a half-point to four per cent last month.

The World Economic Forum’s annual Middle East meeting of business and political leaders will take place in Egypt next year and will alternate subsequently with Jordan, the organisation said Thursday.
   This year’s regional meeting is due to assemble Middle Eastern and world leaders by the shores of the Dead Sea in Jordan from May 18 to 20.
   The event was held in Egypt last year and will return to the Red Sea resort of Sharm el Sheikh again in 2008, the Forum told AFP. The Middle East meeting has been to Qatar, Egypt and Jordan from 2003 to 2005.

The foreign affairs and expatriates welfare and overseas employment adviser, Iftekhar Ahmed Chowdhury, has said a catering institute of international standard would be set up in Sylhet for creating skilled manpower in the culinary industry.
   Exchanging views with the leaders of British-Bangladesh Chamber of Commerce at the local circuit house on Thursday, he said the expatriates welfare and overseas employment ministry would implement the project with the assistance of DFID.
   The adviser said there were about 12,000 restaurants, owned by Bangladeshi expatriates in London, where the demand for skilled chef is rising day by day. It would be possible to find employment for another 20,000 people only in the restaurant sector, he added.
   Iftekhar said the setting up of the catering institute would enable to create skilled manpower in the restaurant sector and it would be easier to export such skilled manpower abroad.
   He informed the business leaders that during his recent visit to London he received positive response from the UK for setting up a catering institute in Bangladesh. The establishment of the catering institute will be the first project of the expatriates welfare and overseas employment ministry.

Scientists of the Bangladesh Rice Research Institute have developed two more potential early hybrid variety of rice suitable for Boro season.
   Production from such hybrid variety is one tonne higher per hectare than any other popular variety and its growth duration is 35 days and quality also good.
   This was disclosed at a function marking Field Day at a research plot of BRRI in Gazipur on Friday. Guests, scientists and delegates went round different research plots and expressed their satisfaction at the progress of hybrid rice research programme.
   Experts hoped that the newly developed rice, yet to be named, would help meet the food demand of the growing population if it is cultivated.
   The BRRI director general Mohammad Nur-e-Elahi said research activities should be further updated and strengthened to continue the success of technology invention. BRRI first developed a hybrid variety of rice in 2001. So far, BRRI developed 47 high yielding variety of rice.

Three women entrepreneurs of Proshika have been awarded by Prime Bank in recognition of their successes in micro-credit programme and creating employment opportunities for some unemployed people.
   The three awardees are Nazma Arif, owner of Nikhut Craft, Rasheda Akhter, owner of Rasheda Shopping Centre and Halima Akhter, owner of Dairy and Poultry Farm.
   These women took loans from the Small Economic Entrepreneurs Development programme of Proshika achieved success investing the loan money in their business. They also provided employments for 126 people in their business ventures.
   A total of nine women entrepreneurs of Proshika, BRAC and Asha were awarded for their success in micro-credit programmes.

A group of European banks are in secret talks to set up a pan-European debit card to challenge MasterCard and Visa Europe in cross-border business, a document obtained by Reuters said on Friday.
   The banks are ‘believed to be unhappy with the possible emergence of MasterCard’s Maestro as the dominant provider of debit card network services in Europe,’ said the document from banking consultancy Lafferty Group, sent to clients.
   The banks involved include Societe Generale, Deutsche Bank, Dresdner Bank, Commerzbank, Unicredito, ABN AMRO, ING and Rabobank, it said.
   Some are listed as clients of Lafferty on its website. None of the banks was immediately available for comment.
   The European Union has just adopted new rules to create a single euro payments area for the bloc’s 490 million consumers to make or receive national or cross-border payments in all EU currencies from a single bank account.
   The aim is to have one EU-wide payments system using common technical standards so that existing banks and new payment institutions can compete to cut costs for consumers.
   National debit systems will be replaced by a single EU-wide system from 2010, but so far Maestro has a clear run for providing an EU-wide debit card service.
   This has triggered concern among European banks that a core service is dominated by a US based company that already has a big chunk of the cross-border credit card market in the EU.
   That concern is shared by the executive European Commission—the EU’s top competition regulator.
    ‘According to one source, a working group has been established to look at the feasibility of using the Euro Alliance of Payment Schemes (EAPS) as a basis for forming the new scheme,’ the Lafferty document said.
   ‘However, another source says that so far discussions have only occurred at board level within the banks, and that no technical issues have been discussed,’ the document said.
   The document said the V Pay debit scheme, operated by Visa Europe, ‘does not seem to have gained widespread support from European banks.’

The German government expects the country to have a bigger-than-expected tax surplus of 179.2 billion euros (241.6 billion euros) by 2011, according to figures published on Friday.
   The federal government’s predicted fiscal surplus, or excess of tax revenue over expenditure, is expected to come to 87 billion euros by that date, the figures released by the finance ministry showed. The rest of the stated figure is made up of the expected surpluses of the country’s 16 regional states and social security services.
   In a break-down given by the ministry, the total fiscal surplus for 2007 is forecast at 20.3 billion euros and that for next year at 47.9 billion euros.
   The figures bolster perceptions that the German economy, the biggest in the eurozone, is recovering and regaining its position as the motor of European Union growth.
   But the left-right coalition government in Berlin appears divided on how to best use the strong fiscal surplus.
   Economy Minister Michael Glos, a member of Chancellor Angela Merkel’s Christian Democrats, favours tax cuts but Finance Minister Peer Steinbrueck, a Social Democrat, is opposed to such a step.
   Steinbrueck would prefer to use the surplus to balance the German budget and reduce the national debt. On Friday, he said he hoped to eliminate the federal budget deficit by 2011.

The dollar steadied against the euro and yen on Friday as the market awaited fresh US economic data and digested the week’s interest-rate decisions from around the globe, traders said.
   In early European trading, the euro stood at 1.3482 dollars, compared with 1.3483 dollars in New York late on Thursday.
   The dollar was being traded at 119.87 yen, compared with 119.90 yen.
   Market watchers were awaiting several US economic indicators to be released later Friday, including retail sales and producer price inflation for April as well as business inventories for March.
   ‘The dollar has reacted to the weakening in data over recent weeks, but appears to have shown renewed signs of recovery lately,’ Calyon analyst Mitul Kotecha said.
   ‘The dollar is likely to consolidate further over the short-term, with today’s releases unlikely to give the currency much direction.
   The dollar had extended its rally on the euro Thursday as favorable comments in Washington on the US unit and openness to foreign investment overshadowed news from major central banks.
   The market also shrugged off a weak report on the US trade deficit and announcements from three major central banks in 24 hours, focusing instead on comments by US President George W. Bush and US Treasury Secretary Henry Paulson.
   The latter told a TV station that a strong dollar was in his nation’s interest, while Bush issued a statement that said he would attempt to lower trade barriers to attract foreign investment.
   Their words supported the dollar, while coming amid meetings of the Bank of England and European Central Bank and a day after the US Federal Reserve made no change in interest rates while maintaining an upbeat outlook for the world’s biggest economy.
   Analysts said the Bank of England’s quarter-point increase was expected and that the ECB’s hint of a rate hike in June offered no surprises and had been priced into the market.
   ‘But a continued fall in the euro is unlikely as there is no particular reason to back up the dollar at this moment,’ said Hironobu Hagi, deputy general manager at Shinsei Bank’s capital markets division.
   The euro changed hands at 1.3482 dollars, against 1.3483 dollars late Thursday, 161.59 yen (161.67), 0.6815 pounds (0.6812) and 1.6427 Swiss francs (1.6448).
   The dollar stood at 119.87 yen (119.90) and 1.2187 Swiss francs (1.2196).
   The pound was being traded at 1.9791 dollars (1.9791).
   On the London Bullion Market, the price of gold dropped to 668.20 dollars per ounce, from 673.50 dollars late on Thursday.

Apple Inc chief executive Steve Jobs defended the company’s record on stock option grants and joked about his $1-a-year salary in a spirited exchange at the computer and iPod maker’s annual meeting on Thursday.
   ‘What did you know and when did you know it?’ an AFL-CIO union representative asked Jobs about back-dated options granted to senior executives at Apple.
   Cupertino, California,-based Apple previously said an internal review found two questionable options awarded to Jobs, but found no wrongdoing by him or other current management.
   The SEC said late last month that it would not bring charges against Apple based in part ‘on its swift, extensive and extraordinary cooperation’ in the investigation.
   Jobs read that statement aloud during the question and answer session of the annual meeting at which the discussion about options and executive compensation arose. ‘I think I’m going to read that sentence again,’ Jobs said. And then he did.
   ‘Unless you think there’s a conspiracy with the SEC, I don’t know what to say,’ Jobs said.
   Apple said in December it would take an $84 million charge for misdating more than 6,400 stock options. Apple is among dozens of companies under scrutiny for their accounting of stock options granted to executives. The main issue for many companies is whether they changed the date of stock options grants to take advantage of a temporary decline in the underlying share price.
   As expected, all six shareholder proposals were defeated. Two of the six, which asked Apple to be more environmentally responsible, were withdrawn at the meeting following a letter that Jobs posted earlier this month on Apple’s Web site about the company’s environmental policies.

British mobile phone giant Vodafone has chosen Budapest as the site of a new global financial service centre, the company management said here on Friday.
   The nine billion forint (36.1 million euros, 48.7 million dollars) centre will be set up by 2009 and will employ 700 people, Vodafone Hungary chief executive Gyorgy Beck said in a press conference in Budapest.
   ‘Under the initiative, Vodafone will set in place a single, integrated Enterprise Resource Planning (ERP) system for finance, supply chain and human resources in all operating companies where the Group has a majority ownership,’ Vodafone said in a statement.
   ‘The programme is expected to ensure that Vodafone is even better prepared to deliver on its key strategic objectives of reducing costs in Europe, supporting strong growth in emerging markets and enhancing the management of its business portfolio to maximise returns,’ the company said.

Singapore Airlines said Friday its net profit in the year to March almost doubled to 2.13 billion Singapore dollars (1.41 billion US), boosted in part by exceptional gains of 421 million dollars.
   Net profit for the flag carrier in the previous financial year was 1.24 billion dollars.
   The carrier’s revenues in the year to March rose an annual 8.6 per cent to a record 14.49 billion dollars, SIA said in a statement.
   It flew a record 18.34 million passengers, an increase of 7.9 per cent from the last financial year.

Asia is unlikely to be hit by another financial crisis similar to the one in 1997 as the region now has ample foreign exchange reserves, former US Federal Reserve chief Alan Greenspan said Friday.
   The region has also taken action to pool part of these massive reserves to defend against a repeat of the meltdown, he was quoted as telling a closed-door Merrill Lynch forum in Singapore.
   ‘The chance of 1997 happening again is virtually non-existent,’ a forum participant quoted him as saying.
   Greenspan, whose views are still closely watched by the market despite his retirement last year, was speaking via satellite link from Washington.
   According to a participant, who did not want to be named, Greenspan drew his views from the fact that Asian central banks currently have adequate reserves compared to a decade ago when several economies were running current account deficits.
   The former Fed chief also referred to an agreement this month by the 10-member Association of Southeast Asian Nations, Japan, South Korea and China to pool part of their reserves as a shield against a repeat of the 1997 crisis.
   Under the pact, the 13 countries will work toward a multi-nation scheme of currency swaps to improve an existing system introduced in 2000.
   Asia now holds the bulk of the world’s foreign reserves at some 2.7 trillion dollars, led by China, which alone has more than one trillion dollars.
   Greenspan said a slowdown in the US economy will affect exports from Southeast Asia, but any impact could be offset by stronger domestic consumption as a result of the region’s healthy savings rate.
   The US economy — a major buyer of the world’s exports — weakened dramatically in the first quarter to its worst growth pace in four years, expanding at a clip of just 1.3 per cent.
   A housing slump dragged the world’s biggest economy down sharply from its annualised 2.5 per cent pace in the prior quarter.
   Greenspan told the forum he thinks the odds against the US economy falling into a recession are two to one.
   He said that ‘housing is a drag’ on the US economy, describing the problem in the housing market as one of excess inventory.
   ‘We’re unlikely to get an improvement until we’re through this,’ he was quoted as saying.
   Commenting on the Chinese currency, Greenspan said it was in China’s ‘self-interest’ to allow the yuan to appreciate at a quicker pace.
   The value of the yuan has been a key source of trade friction between the United States and China, with Washington accusing Beijing of artificially keeping the currency low to give its exporters an unfair advantage in the global market.
   China revalued the currency by 2.1 per cent in July 2005 and has since then allowed the monetary unit to gain about five per cent more.

Deutsche Telekom employees began an open-ended strike on Friday in protest at restructuring measures at Europe’s biggest telecoms operator, the ver.di union said.
   Employees began industrial action in the southern region of Bavaria, followed by their colleagues in the western city of Duesseldorf.
   About 11,000 workers were expected to join the strike, the union said.
   Workers are furious at Telekom’s plans to transfer up to 50,000 staff to a newly created T-Service customer service division, a measure designed to face up to the collapse in its fixed-line business.
   Unions are also angered by plans to slash entry-level wages by about one third to reduce staff costs.
   Striking workers in Duesseldorf carried banners incorporating the Telekom logo into the German word ‘Armut’, or poverty.
   With the German economy booming, Telekom employees say they want their share of the benefits of economic growth, but Telekom is struggling to re-structure 12 years after privatisation.
   It lost 588,000 fixed-line customers in the first three months of 2007 as clients switched to cheaper operators. That contributed to a 57.4 per cent collapse of net profit to 459 million euros ($619m) in the first quarter.
   Telekom employs 120,000 people in Germany.
   The strike, which is expected to affect repair and installation services, is 44 years old Rene Obermann’s first big test as chief executive since he took over last November.

A Chinese business delegation has signed deals worth 4.3 billion dollars with US firms, a move to showcase willingness to reduce China’s yawning trade surplus, state media said Friday.
   The mission, headed by vice-minister of commerce Ma Xiuhong, signed 27 contracts in San Francisco on Wednesday for US high-tech and information products, the China Daily reported.
   Chinese computer giant Lenovo Group inked orders for 1.3 billion dollars with Microsoft Corp to buy Windows, Office and other software suites for its personal computers, the report said.
   The deals were sealed ahead of a much-anticipated round in the Strategic Economic Dialogue between the two nations, to be held in Washington later this month.
   The China Daily quoted local media as saying that California lieutenant governor John Garamendi applauded the contracts as an ‘important step in furthering the deep relationship between this state, this country and China.’
   China has sent such buying missions to the United States from time to time to highlight its determination to narrow its trade surplus with the United States, which hit 232 billion dollars last year according to US data.
   When Chinese president Hu Jintao visited the United States in April last year, Chinese enterprises sealed about 16 billion dollars in deals on products ranging from soyabeans to aircraft.

The US government launched an initiative Thursday to show America welcomes foreign investment despite recent flaps about takeovers of US companies.
   The initiative announced by president George W Bush and Treasury Secretary Henry Paulson comes amid a drop off in global investment in the United States in recent years and a perception of barriers to foreign firms, officials said.
   ‘As both the world’s largest investor and the world’s largest recipient of investment, the United States has a key stake in promoting an open investment regime,’ Bush said in a statement.
   ‘My administration is committed to ensuring that the United States continues to be the most attractive place in the world to invest.’
   Paulson on Thursday was attending a forum on the importance of an open economy and international investment at George Washington University in the US capital and on Friday was to travel to St Louis, Missouri to tour the facilities of two foreign-affiliated companies operating there.
   The campaign came a year after a move by Dubai’s DP World sparked a furor by acquiring US port operator PO, but then sold the US operations in the face of massive criticism in Congress and elsewhere.

Beer smuggling cost Cambodia’s government 22 million US dollars in lost tax revenue last year, according to an economic think tank, which warned Friday that contraband alcohol was on the increase.
   Millions of bottles and cans of beer imported from Singapore and Thailand simply disappeared at the Cambodian border before being taxed, the Economic Institute of Cambodia said in a report commissioned by two local breweries, Cambrew and Cambodia Brewery Ltd.
   ‘With weak governance and law enforcement, ‘contraband’ beer has ... been booming,’ the EIC said, adding that the smuggled brew accounted for 29 per cent of the country’s total beer market, far outstripping legal imports at six per cent.
   The Japanese beer Asahi, the cheapest foreign brand on the market, made up the largest percentage of imported beer, the EIC said.
   ‘It is crucial the government take energetic measures to combat ‘contraband’ beer, especially along the Thai border,’ it added.
   The losses represent about three per cent of Cambodia’s total budget revenue, and have wider implications for anyone trying to produce locally, business experts said.
   The Swiss foods giant Nestle closed its factory in Cambodia several years ago because its locally produced products could not compete with smuggled goods, according to Bretton Sciaroni, who co-chairs a monthly working group on law, taxation and good governance for the private sector.
   Corruption cost Cambodian businesses some 330 million dollars in 2005, while the government failed to collect 400 million dollars in taxes, the EIC said in a report released last year.

Initial talks between South Korea and the European Union on forging a free trade agreement have been a success, both sides said Friday at the end of the first round.
   Seoul’s chief negotiator Kim Han-Soo called the five days of talks ‘highly successful’ while his EU counterpart Ignacio Garcia Bercero said discussions were ‘very constructive.’
   Asia’s third largest economy and the world’s biggest trading bloc began talks Monday, focusing on rules and principles. Bercero said they aim for a ‘very ambitious and comprehensive’ free trade agreement.
   ‘The first round was highly successful,’ said Kim, the deputy trade minister. ‘Mutual trust was built considerably between negotiators of the two sides.’
   He said they have agreed in principle to scrap about 95 per cent of each other’s tariffs on merchandise. A draft text on tariff concessions would be exchanged by the end of June, with a second round of talks starting July 16 in Brussels.
   South Korea’s average tariff is 11.2 per cent compared to the EU’s 4.2 per cent, according to Kim’s office.
   South Korea has said it wants to conclude a pact within a year. Kim said it was too early to say when an agreement would be sealed, ‘but I hope we will be able to conclude the deal as quickly as possible.’
   South Korea, fresh from a landmark trade pact with the United States, hopes to become a free trade hub linking America and Europe and to steal a march on its export rivals China and Japan.
   The European Union sees an agreement as giving it a bridgehead in Northeast Asia.
   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.
   The EU cited rules of origin, services and sustainable development as sensitive issues for future negotiations, while South Korea regards environment and labour matters as the most difficult areas.
   South Korea hopes the EU will ease anti-dumping rules and countervailing duties, while the EU wants Seoul to ease regulations on imported cars.
   The EU has called for ‘reciprocity’ in services and investment, Bercero said, adding he also raised intellectual property rights.

South Korea’s auto production at home and overseas will surpass five million this year for the first time, prime minister Han Duck-Soo predicted Friday.
   ‘The year 2007 will serve as a turning point for South Korea’s carmakers,’ Han told a meeting of government and car industry officials in southern Seoul.
   ‘In 2007 auto production within South Korea will reach four million, while that outside the country will amount to one million,’ Yonhap news agency quoted him as saying.
   Hyundai Motor and Kia Motors, the nation’s two largest automakers, operate factories in the United States, Eastern Europe, China and other Asian nations. Last month Hyundai Motor sold 225,178 vehicles, with domestic sales rising 16.5 per cent and exports gaining 8.7 per cent.
   Last year South Korean carmakers produced 3.8 million units within the country and 990,000 overseas, the commerce ministry said.
   It said South Korea will make up 7.5 per cent of global car production this year, up from 6.9 per cent last year.

The Indian government said Thursday it sold its remaining 10.27 per cent stake in the country’s biggest carmaker, Maruti Udyog, at 797 rupees ($19.9) a share, well above its floor price.
   The sale fetched 23.68 billion rupees ($575m) for the government from 36 bids that ranged between 765 and 850 rupees a share.
   The government had set a floor price of 760 rupees a share for the firm majority-owned by Japan’s Suzuki Motor Corp in the first major state asset sale by the Congress party-led government, which came to power in May 2004.
   Maruti’s shares fell 8.02 rupees or 1.02 per cent to 794.65 Thursday before the sale, while the benchmark Mumbai stock exchange Sensex index ended down 10.28 points or 0.07 per cent at 13,771.23.
   ‘We have sold the entire shares held by the government in Maruti at an average price of 797 rupees a share,’ Heavy Industries and Public Enterprises Minister Sontosh Mohan Dev told reporters.
   Dev said the government had offered 29.6 million shares, representing its stake in Maruti.
   Life Insurance Corp, India’s largest insurer, picked up 13 million shares, other officials said.
   ‘LIC earlier held 8.1 per cent of the shares in Maruti and now it will control 12.5 per cent and become the second-largest shareholder in the company,’ said PV Bhide, a senior finance ministry official.
   The carmaker currently faces stiff competition, especially from South Korea’s Hyundai and India’s Tata Motors, both makers of small cars.
   India’s booming economy, growing at an annual rate of nine per cent, has created an affluent middle class that has spurred car demand, creating one of the world’s fastest growing automobile markets.

US retail sales post surprise drop
US consumers appeared to rein in their legendary appetite for shopping last month as retail sales fell an unexpected 0.2 per cent, the government said Friday. The Commerce Department’s monthly snapshot on retail sales, a key driver of economic growth, caught Wall Street off guard as most analysts had been expecting April retail sales to rise 0.4 percent. The drop in sales was the strongest since September last year. Stripping out auto sales from the April report, retail sales were unchanged, also weaker than forecasts which had called for such sales to rise by at least 0.5 per cent. March’s retail sales numbers were revised higher as the government said it had revised March retail sales up several notches to 1.0 per cent. Over the past 12 months, overall retail sales are up 3.2 per cent or 3.7 per cent excluding the auto sector.
— AFP

Indian petroleum sector drives growth
A turnaround in crude oil output and higher production by refineries pushed the growth of six infrastructure industries to 8.6 per cent in 2006-07 as against 6.2 per cent in the previous year. The crude production, declined 5.3 per cent in 2005-06, increased by 5.6 per cent in 2006-07. Similarly, the output of refineries grew 12.6 per cent in FY07 as compared to 2.4 per cent in 2005-06. In March 2007, the growth of the core sector was 10 per cent as against 7.1 per cent in the same month last year. The increase in growth during the last month of 2006-07 was due to better performance of steel, whose production increased by 15 per cent. Besides, electricity grew at eight per cent and refinery throughput at 13.4 per cent. The growth in production of cement, however, fell in March 2007 to 5.5 per cent from 17 per cent in the same period last year.
— PTI