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Turnover at the Dhaka Stock Exchange nearly doubled last week with 93.83 per cent rise to total at Tk 1,425 crore from the previous week’s Tk 735 crore as investors returned to the trading floor heavily after the SEC withdrew restrictions on fund inflow to the market, said analysts.
   ‘It is a reflection of the relief among investors,’ said Moin Al Kashem, senior vice-president of the Prime Finance and Investment.
   He said the investors, institutional or retail, injected funds into the market eased by the latest moves taken by the Securities and Exchange Commission, the capital market regulator.
   The DSE turnover Tuesday climbed to its highest ever mark at Tk 372.37 crore, breaking its previous highest of Tk 343.77 crore Monday. Before the Monday’s figure, the highest turnover at the DSE was at Tk 316.83 reached on October 22, 2007.
   A DSE broker said offloading of the Meghna Petroleum’s shares in large-volume also contributed to the record surge of the turnover at the bourse.
   On Sunday, the SEC raised the maximum rate of margin loan for merchant banks to 1:1 with effect from today (February 10) with a view to improving the liquidity situation at the market which had recently been going through a somewhat shortage of liquidity inflow.
   To improve the liquidity situation at the market, the SEC also reintroduced financial adjustment facility against the trading of shares of ‘A’, ‘B’, ‘G’ and ‘N’ categories from last Sunday.
   The DSE general index gained 93 points or 3.20 per cent last week to close at 3000.17 on Thursday, while it blue chips index, DSE20, advanced by 21.49 points or 0.91 per cent to close at 2381.08.
   With the rise in the share prices, DSE market capitalisation recorded its highest ever mark with Tk 80,226 crore on Thursday, surpassing its previous highest of Tk 79,697 crore on January 16.
   Of the total 256 issues traded at the DSE last week, 165 gained, 88 declined and three remained unchanged. Twenty-eight issues recorded no transaction during the period.
   Wata Chemicals topped the gainers’ list in the week with 79.32 per cent rise in its share price while M Hossain Garments was the worst loser with 22.22 per cent fall.
   Meghna Petroleum topped the turnover leaders with total transaction of Tk 213.11 crore, which was 14.96 per cent of the total turnover of the bourse last week. Jamuna Oil Company was the second biggest turnover leader with Tk 153.76 crore.
   Other turnover leaders were Grameen Mutual Fund One, AB Bank, Aims 1st Mutual Fund, Summit Power, BRAC Bank, IFIC Bank, Lankabangla Finance and National Bank.

Finance and planning adviser AB Mirza Azizul Islam has stressed the need for improving coordination among government agencies for better utilisation of public resources as he reckoned the current monitoring process of development project implementation anomalous.
   The adviser, addressing a seminar on Saturday, cited an implementing agency had reported spending of 65 per cent of the allocation for a development project whereas an investigation by the monitoring authority found utilisation of only 5-6 per cent of the resources.
   ‘The money was withdrawn and perhaps kept in a bank account,’ he told the seminar on ‘Strengthening Result-Based Monitoring and Evaluation of Project’ organised by the Implementation, Monitoring and Evaluation Division to finalise its strategic plan.
   Jointly funded by the government and the Asian Development Bank, the Tk 7-crore project is designed to include some result indicators for development spending. Currently, evaluation of the projects under the annual development programme is done mainly on the basis of spending money.
   ADB country director Hua Du insisted that development planning must be made considering the local context so that exercises such as ‘managing for results’ did not come to an end with the expiry of the project.
   She felt that inter-agency coordination was extremely important in Bangladesh to ensure effective utilisation of resources. She also pointed out that lack of availability of accurate data was a major challenge to development planning.
   The finance and planning adviser laid emphasis on revisiting the development plans to ensure transparency and accountability, especially in view of the government’s move to formulate ‘Right to Information Act’ soon.
   Recalling his statement on placing development spending on official website during the announcement of the 2007-08 budget, he mentioned that the interim government was determined to ensure transparency and accountability in spending public money.
   However, the officials of the division later said the website could not be developed since all the agencies of the government were yet to respond to queries on implementation status of their development projects.
   Mirza Aziz further said public investment in the country in terms of volume increased in the past and it should increase in the future, given unwillingness of the private sector to invest in some areas.
   ‘Reality is that any government will have to increase public investment for a long time,’ he added.
   But the principle of allocation of resources could not always be guided by performance, he said, giving the example of the health sector, in which allocation could not be reduced even in case of poor performance.
   Chaired by the IMED secretary Sheikh AK Motahar Hossain, the seminar was addressed, among others, by Dhaka University teacher Niaz Ahmed Khan and IMED officials Fazlul Karim, Amulya Kumar Debnath and Abdul Hye Talukder.

The Bangladesh Bank governor, Salehuddin Ahmed, on Saturday said that the sluggish trend in the country’s trade and commerce was improving gradually.
   Salehuddin said, ‘The rate of import and exports had increased over the past few months. In the last several months, remittance inflows had also increased.’
   The central banker termed the foreign currency reserves strong, in his speech to a discussion meeting with the representatives of the Chittagong Chamber of Commerce and Industry and business leaders at the Chittagong branch of the Bangladesh Bank Saturday.
   He hoped the situation would improve substantially if the boro production reached the target. The Bangladesh Bank was providing all-out assistance to ensure fertiliser and irrigation to the farmers, he said.
   Mentioning that the foreign currency reserves were recorded at $5.4 billion, Salehuddin said that as the reserves were strong, the central bank had approved opening L/C worth 100 million dollars for the import of urea and other fertiliser in January.
   At the meeting, the governor announced that a policy would be formulated in the next one month to lower import finance interest rates, L/C commissions and other charges and to coordinate the activities of commercial banks.
   The BB governor said discussions would be held with the owners and officials of the banks in the next two weeks.
   He said work on formulating the policy would be completed in one month from now. ‘The work of collecting information from commercial banks in this regard has already started to ease import and export as well as to cut expenditure,’ he said.
   Efforts are underway to formulate a policy on foreign currency exchange, he added.
   Mentioning the recent upward trend of import, Salehuddin urged businessmen to invest in the manufacturing sector so that trade and commerce did not become import-dependent.
   Salehuddin said that it was not possible to meet the demand of the large population through import-dependent business. ‘For this, production-oriented industries and factories would have to be established,’ he went on adding that development of agriculture and agriculture-based industries was important.
   He said in this regard that commercial banks had been directed to provide loans to small and individual entrepreneurs.
   The governor said that in many cases the banks were misinterpreting the policy of the Bangladesh Bank and harassing customers and mentioned that if the central bank got complaints about this, stern action would be taken.
   At the meeting, businessmen discussed import-loan interest rates, dollar prices, foreign direct investment, obstacles in import and export, high rate of interest on bank loans and an easier import and export policy.
   On the businessmen’s demand to lower dollar prices, the governor said that appreciating the taka against the dollar would have a negative impact on exports.
   On the different problems and complexities faced by the businessmen, Salehuddin said attempts would be made to solve the problems on the basis of reality.
   The CCCI president, Saifuzzaman Chowdhury, said that if the economy was not strong, whatever the government did would have no positive impact.
   Mentioning that FDI in the country was not up to the mark in the past several years, he said a proper policy was necessary so that foreign investors could not take away profits by only making small investments in the country.
   He said the release of shares of foreign companies in the market should be made mandatory.
   Bangladesh Bank Chittagong region general manager SK Sur Chowdhury presided over the meeting. Former president of the chamber Ali Ahmed, director Mahfuzul Haq Shah and Nasirul Haq, BGMEA director Ershad Ullah, and vice-chairman of S Alam Group Abdus Samad Labu also spoke.

Sri Lanka has had another good year of tea prices not just for the unique range of Low Grown Orthodox teas but for the High and Mid Grown Small leaf grades as well.
   The latter standards sold well in a global market that had Kenya in competition.
   Kenya boosted supply through a rapid and sharp recovery in its production after the 2006 drought. Annual production in 2007 would definitely be a record in excess of 365 million kg.
   India also maintained steady supply though final production figures are likely to be about 10 million kg lower that its record crop of 956 million kg achieved in 2006.
   China emerged as the world’s largest producer in 2006 and was the first country to cross 1 billion kg mark. Indications are that 2007 would be a similar total comprising mostly of green tea (70 per cent).
   These figures indicate that the world market was well supplied with black tea in 2007. Buyers loyal to Ceylon tea however could not obtain their full requirement.
   The Market for Orthodox Low Growns has few competitors. Indian products with a few exceptions generally do not compare favourably, and are often low end reducers.
   Low Grown supply was a key factor that drove the market in 2007. Annual production figures show Low Growns having lost 7 million kg; down from 184.5 in ‘06 to 177.6 in ‘07.
   A review of monthly production shows that the short fall was narrowed towards the end of the year and often supply was much tighter during the first two quarters.
   Bad weather and reduced fertiliser application were the main causes. On the demand side Middle-east and North African markets which absorbed 53 per cent of Sri Lanka Tea Exports were active once again. Russia/ CIS with an off take of 23 per cent were also strong.
   Both regions benefited from strong oil prices which boosted their economy and improved spending power of their consumers.
   Low Grown monthly average prices for all teas sold were at record levels through out the year. In January the figure was 235.23 Rupees and by December had risen to 357.77 rupees, highest for any month.
   Depreciation of the Rupee also helped lift auction prices. In US$ the 1997/1998 record figures were passed in the month of February ‘07. It must be noted however that the 2007 discounted dollar does not compare with its 1997 /1998 purchasing power.
   High Grown prices rose sharply in the first quarter in Rupee and Dollar terms, as a result of the production crash that followed theQ4 ‘06 strike. Plantation companies whose cost of production skyrocketed after the strike and exporters forced to pay up on previous contracts; both lost money during the period.
   The market eased during Q2 but production losses in Q3 and increased seasonal demand started pushing prices up all the way till the close of the year. The market for Mediums rode with both Low and High Growns.
   Orthodox leafy types moved in sympathy with the stronger low growns while Small Leaf types sold in line with High Growns.
   Rising Private Sale quantities is a cause for concern. During the year 2007 a record 55 million kg (19 per cent) of all tea sold was on Private Sale basis. The greater weight of this teas comprised of Low Grown main grades.
   It is believed that the producers’ advantage of shortening the tea to cash cycle is out weighed by negative impact on auction prices. The other reason attributed to producer (private tea factories in particular) eagerness for adopting this channel of sale is inflation of the factory average.

Md Akter H Sannamat has recently been appointed managing director of Prime Finance and Investment Limited.
   Prior to his new appointment, he was deputy managing director of the company, said a press release.
   Sannamat joined Prime Finance in 1997 as assistant vice-president. A chartered accountant, Sannamat, started his career in 1993 as group auditor with Excelsior Group. He completed his post-graduation in accounting from the University of Dhaka.
   He is a fellow member of the Institute of Chartered Accountants of Bangladesh and the Institute of Chartered Secretaries and Managers of Bangladesh. He is also a member of the listing committee and trading committee of the Chittagong Stock Exchange.

After many years, farmers of the northern region are expecting an bumper production of wheat this time as the farmers cultivated the crop on more land current year than the previous seasons and the blooming plants are growing well everywhere due to favourable climatic conditions.
   Farmers and officials concerned today told the news agency that the fixed target might be achieved for the first time in recent years this season as the growers have cultivated the crop on more land than the fixed target in many of the northern districts.
   The Department of Agriculture Extension had fixed a target of producing 4,69,220 tonnes of wheat from 2,22,962 hectares of land during the current Rabi season in the region.
   DAE sources said, a target of producing 2,33,600 tonnes wheat from 1,10,762 hectares was fixed in eight districts under Rangpur Agriculture Zone and 2,35,620 tonnes from 1,12,200 hectares in another eight districts under Rajshahi Agriculture Zone this time.
   The sources said, the departments concerned, including the DAE, the Armed Forces, the Bangladesh Agriculture Development Corporation and the Bangladesh Agriculture Research Institute, had taken special steps to make the programme a success.
   The DAE fixed target for producing the wheat in the region could not be achieved during the last five consecutive seasons due to various reasons, including diversification of crop farming and less interest of farmers in farming the crop, the sources added.
   During the last Rabi season, the DAE fixed the target for producing 4,91,507 tonnes of wheat from 2,84,108 hectares in the northern districts and the target was not achieved and the results were the same during the past several consecutive seasons.
   Besides, the landless, small and marginal farmers have cultivated wheat in vast tract of the sandy char lands in the Brahmaputra and Jamuna rivers basins this time that will add to the overall production of the crop.
   Deputy director of DAE, Rangpur Kamal Shariful Alam on Saturday told the news agency that the government has engaged its best efforts to popularise wheat farming throughout the country for achieving the fixed production target this year and onwards.

India wants to triple its bilateral trade with Argentina in the next four years to more than three billion dollars, a junior Indian minister said Friday during a visit to Buenos Aires.
   ‘We have set a target of 3.0 billion by 2010. We hope that we will be able to achieve it ... but we want more, we want to increase by three times in the next four years,’ said minister of state for external affairs Anand Sharma.
   ‘We are identifying more areas of partnership,’ Sharma told AFP, citing his country’s particular interest in bio-technologies and underscoring his country’s will to boost its investments in Argentina.
   The balance of trade currently favors Argentina, which exports 800 million dollars of products — 80 per cent of which is soybean oil — to India, the minister said. Indian exports to Argentina total around 300 million dollars.
   India also has around 800 million dollars in investments in Argentina’s steel sector, software with the Tata Consultancy Group, and pharmaceutical and agrochemical industries.
   He indicated that a forum of business leaders from the two countries was due to convene in the near future in Argentina.
   Sharma arrived in Buenos Aires Thursday and held discussions with his Argentine counterpart Jorge Taiana, and on Friday met with Argentina’s deputy foreign minister Roberto Garcia Moritan.

British inflation data is expected to play a key part in dealers’ thinking next week as they seek to drive higher the London stock market, which has slumped on lingering fears of a US recession.
   London’s FTSE 100 index of leading shares ended the week at 5,784.00 points, down 4.07 per cent or 245.2 points from the previous Friday.
   Following the publication of British inflation data for January next Tuesday, the Bank of England will on Wednesday unveil its latest quarterly inflation and economic growth forecasts.
   This week, the BoE trimmed its key interest rate by a quarter-point to 5.25 per cent amid concerns of slower economic growth, while keeping a close watch on inflation.
   The British central bank said its rate-setting Monetary Policy Committee needed to balance the risk of ‘a sharp slowing in activity’ against the danger of rising inflation.
   The main job of the BoE’s monetary policy committee is to keep British 12-month inflation close to a government-set target of 2.0 per cent. Inflation was unchanged at an annual rate of 2.1 per cent in December.
   ‘As the growth outlook has worsened, so too have inflation prospects,’ said Capital Economics analyst Vicky Redwood.
   ‘In particular, CPI (consumer prices index) inflation is now set to rise more sharply in the near-term than the MPC was expecting three months ago.’
   Inflation in Britain is being fuelled largely by big hikes to energy prices.
   On the corporate front next week, all eyes are expected to be on mining giant Rio Tinto, which unveils full-year earnings on Wednesday.

Turkmens will be taking to their cars with a spring in their step from Saturday after the government declared it will be giving drivers 120 litres of free petrol every month.
   Drivers of trucks, tractors and buses will get 200 litres for free every month and motorcyclicts will get 40 litres, according to a decree published in the government daily, Neutral Turkmenistan.
   ‘The owners of transport vehicles will be given coupons giving them the right to free refuelling’ at petrol stations, the newspaper said.
   Coupons will be given out at banks from Monday to anyone who can provide a Turkmen passport and a registration document for their vehicle.
   For drivers purchasing petrol above the limit, however, the price will go up to market levels, the decree said. Experts said this could mean petrol will cost around 60 dollar cents compared to the current eight dollar cents.
   Turkmenistan, a gas-rich Central Asian state, has a Soviet-style economy that is dominated by the state.

Venezuelan energy minister Rafael Ramirez said Friday that the South American state would not be ‘intimidated’ by US energy giant ExxonMobil in a legal spat tied to the nationalisation of key oil fields.
   Ramirez spoke a day after ExxonMobil said it had won international court orders freezing 12 billion dollars in the worldwide assets of Venezuela’s state oil firm, Petroleos de Venezuela (PDVSA), as it seeks compensation related to the nationalization push.
   ‘We will not be harassed in this way. It’s an aggressive strategy, but we won’t be intimidated,’ Ramirez told reporters.
   ExxonMobil, one of the world’s largest oil companies, said it had won court orders in London, the Netherlands and Netherlands Antilles freezing PDVSA assets in those jurisdictions of up to 12 billion dollars.
   A New York court has also frozen 300 million dollars worth of the state oil firm’s assets.
   Ramirez denied that any of PDVSA’s assets had been blocked.
   ‘It’s completely wrong to say they’ve been frozen, there has been no definitive decision,’ the energy minister said.
   ‘Its a precautionary measure ... to which we have the right to respond,’ he said, adding that PDVSA was preparing its case before the court, where ‘we feel certain we’ll quash that measure.’
   PDVSA said it plans to file its appeal in court by the end of the month.
   The escalating legal fight pitches one of America’s most powerful and wealthy corporations against the leftist government of Venezuelan president Hugo Chavez. Venezuela is also a member of the Organization of the Petroleum Exporting Countries (OPEC).
   Ramirez said Venezuela would fight ExxonMobil’s legal salvos and said the oil firm’s actions would not affect PDVSA’s operations.
   ‘We are respectful of the courts and have faith in them,’ the energy minister said, adding of ExxonMobil, ‘It’s not possible to talk to them.’
   The court orders will have ‘a minimum impact on (PDVSA’s) day to day operations, as well as its near term credit quality and financial flexibility,’ Fitch international ratings agency analyst Carlos Fiorillo told AFP by telephone.
   ‘The order in and of itself does not prevent PDVSA from transacting business, and from a practical perspective transferring assets, given its total consolidated asset base of more than 92 billion’ dollars, he added.
   ExxonMobil, which is based the US state of Texas, has sought compensation from Venezuela through international arbitration after pulling out of the country when the Orinoco oil fields were nationalized and it lost its stake in sizeable oil projects.
   Chavez’s government approved a law in June of last year forcing multinationals to transfer at least 60 per cent of the capital in their Venezuelan operations to PDVSA.
   ExxonMobil and rival US company ConocoPhillips both refused and withdrew from Venezuela, which supplies significant oil shipments to the United States.
   Ramirez said new contracts associated with the oil fields’ nationalization could not be addressed through international arbitration.
   Chavez has said Caracas would pay compensation to the multinational companies based on the book-price for the nationalized assets, and not on current market prices.
   ExxonMobil has plenty of cash to wage an international legal contest.
   Earlier this month it reported the biggest annual profit in US corporate history of 40.6 billion dollars for 2007, largely due to surging crude oil prices.
   The oil firm has been seeking international arbitration through the International Center for Settlement of Investment Disputes (ICSID), an autonomous body within the World Bank which works to resolve disputes between governments and foreign private investors.
   While ExxonMobil opted to launch a legal battle, other foreign energy companies, including France’s Total, Norway’s Statoil and British energy firm BP, accepted the Venezuelan government’s terms for maintaining their operations in the country.

A 150-billion-dollar economic stimulus plan approved by the US Congress will give a shot in the arm to a lagging US economy, possibly mitigating the current downturn, analysts say.
   The US president, George W Bush, is due to sign the measure next week, clearing the way for tax rebate checks to be sent out in the coming months. The measure also includes business tax breaks aimed at stimulating investment.
   Economists are divided on the overall impact of the measure. Most say it can help boost critical consumer and business spending, but not until later this year. Some call it an election-year gimmick.
   Peter Kretzmer, senior economist at Bank of America, said the plan ‘will provide a boost to consumer spending and business investment,’ but added: ‘It will not, however, solve housing’s problems.’
   ‘At best, it will provide a temporary boost to consumer spending and aggregate demand,’ Kretzmer said in a note to clients.
   ‘Some estimates suggest that spending may rise approximately 40 billion dollars over several quarters, with the residual of the rebates used for debt repayment/savings.
   ‘Because of the temporary nature of the fiscal stimulus package, its ‘multipliers’ in terms of boosting employment and investment spending are likely to be modest.’
   Backers of the plan say tax rebate checks of up to 600 dollars for individual taxpayers and 1,200 for couples, plus extra for dependent children, could charge up consumers pressured by sinking home prices and tight credit.
   Ethan Harris, senior economist at Lehman Brothers, said the rebate effort ‘should act like a well-timed shot of caffeine for the economy,’ but with a ‘payback’ after the effect wears off.
   ‘The rebate comes at an opportune moment,’ Harris said in a research update.
   ‘Our forecast assumes that in the absence of the rebate the economy would go into a shallow recession later this year, followed by a very weak recovery in 2009.’
   Harris said that because the stimulus will wear off, he sees ‘a ‘W’-shaped recovery, with the economy flirting with recession again in early 2009. In the rush to enact a timely package, politicians may have stopped a 2008 recession, but they have ignored a risky letdown — after the election.’
   A more skeptical John Wilson, equity strategist at Morgan Keegan, said the stock market sees through the gimmickry.
   ‘The market has a tendency to see through the bull and recognize this for what it is, a bipartisan attempt to be seen as taking action that will curry favor with the electorate in an election year,’ Wilson said.
   ‘From an economic stimulus perspective, it will have the short-term effect of increasing spending and there will be the Keynesian multiplier effect,’ Wilson said.

Finance leaders of the world’s top industrialised nations put on a show of solidarity on Saturday in the face of an economic slowdown and conceded that things could get even worse because of the crumbling US housing market.
   In a communique released after meetings in Tokyo, the Group of Seven said prospects for economic growth had worsened since they last met in October, although fundamentals remained solid and the US economy was likely to escape a recession.
   ‘There was a climate of much greater pessimism and worry than in October,’ said Italian economy minister Tommaso Padoa-Schioppa.
   Finance ministers and central bankers from Japan, the United States, Canada, Britain, Germany, Italy and France said that growth in their countries was expected to slow by ‘varying degrees’ in the short term.
   They pointed to serious risks from the US property market slump and subsequent tightening of credit conditions, which has slowed the flow of money to the consumers and companies that drive the world’s economy.
   Debt-laden banks have curbed lending as their losses, tied primarily to souring US home loans, rise above $100 billion. That has raised the specter of a vicious cycle as consumer spending slows, prompting businesses to retrench and cut jobs.
   Glenn Maguire, Asia Pacific chief economist with Societe Generale in Hong Kong, noted that the G7 offered little in the way of detail on coordination action to support the economy.
   ‘This economic shock and the economic downturn is largely driven by domestic problems in the US and it really can’t be remedied by a globally coordinated action plan,’ he said.
   US treasury secretary Henry Paulson said global markets may face a prolonged period of unrest.
   ‘The current financial turmoil is serious and persisting,’ Paulson said in prepared remarks issued after the meeting.
   ‘As the financial markets recover from this period of stress, as of course they will, we should expect continued volatility as risk is repriced.’
   The G7 leaders urged banks to fully disclose their losses and shore up their balance sheets to help restore the normal functioning of markets. German finance minister Peer Steinbrueck said writeoffs could reach $400 billion.
   ‘Going forward, we will continue to watch developments closely and continue to take appropriate actions, individually and collectively, in order to secure stability and growth in our economies,’ the communique said.
   Pledges to work together to restore the financial system to health contrasted with divisions over fiscal and monetary policy ahead of the G7 gathering.
   Before Saturday’s meetings, many in Europe had privately expressed alarm over the US Federal Reserve’s aggressive interest rate-cutting stance after it slashed 1.25 percentage points off of the benchmark federal funds rate in less than 10 days in January.
   The monetary easing, along with a $152 billion US fiscal stimulus package, threatened to open a rift between the United States and its allies over how to prevent the credit crisis from pushing the world into a downturn.
   But tensions eased after the European Central Bank stressed the risk to euro zone economic growth, alongside its long-held worry about inflation, signaling that the ECB may soon join the Fed, Bank of England and Bank of Canada in cutting rates.
   French economy minister Christine Lagarde said she welcomed that change by the ECB, but wanted more: ‘It’s like the overture of a symphony: you are always waiting for what comes next.’
   European leaders were particularly concerned about the strength of the euro which hit a record high against the dollar after the Fed began its cutting rates in September. However, the currency retreated after the ECB’s change of heart.
   With more pressing economic matters to discuss, foreign exchange issues were relegated to the back burner at Saturday’s meeting. The communique contained similar wording as in the October statement, with a focus on encouraging China to allow its yuan currency to appreciate more quickly.
   Many G7 leaders think the weak yuan gives China an unfair trade advantage, and have called on Beijing to step up domestic investment to help rebalance the world economy.
   The statement also urged oil exporters to step up production after oil prices briefly topped $100 per barrel last month. It has since retreated, though it spiked up 4 per cent to $91.77 on Friday — its biggest gain in nearly two months — amid supply snags and a looming U.S. cold spell.

OPEC could switch the pricing of oil from dollars into euros within a decade, secretary general Abdullah al-Badri told a weekly magazine.
   The Organisation of the Petroleum Exporting Countries could adopt the euro to combat the decline of the dollar, Badri told the Middle East Economic Digest, published in London.
   ‘Maybe we can price the oil in the euro. It can be done, but it will take time,’ he said.
   Badri told MEED the change could happen within a decade, the magazine said.
   MEED recalled that OPEC is under pressure from its members, who have seen their earnings decline sharply since 2000 due to its use of the dollar. The US currency has fallen 44 per cent in value against the euro in that time.
   The publication of Badri’s remarks coincided with the euro rising against the dollar on the foreign exchanges Friday. The euro peaked of 1.4547 dollars at around 1800 GMT, though it has since weakened.
   ‘In oil exchanges in New York, Singapore or Dubai, you can see the currency is the euro or the yen,’ Badri said.
   ‘But as long as we see the final sign in dollar, that means the pricing is in dollars.
   ‘It took two world wars and more than 50 years for the dollar to become the dominant currency. Now we are seeing another strong currency coming into the (frame), which is the euro.’
   Some OPEC members, notably Iran and Venezuela, have been calling for the group to study the declining dollar’s effect on their economies. Iran has already begun pricing most of its oil in euros.
   MEED recalled that the pricing of oil in dollars is a sensitive topic. Saudi Arabia’s Foreign Minister Prince Saud al-Faisal warned OPEC late last year that the dollar could plunge if OPEC publicly discussed abandoning it.
   On Tuesday, Badri told reporters in London that several oil exporters were selling in dollars but buying other commodities in euros, calling the latter a strong currency.
   The comments served to underline the difficulties currently facing oil exporting countries.

The World Trade Organisation on Friday offered more flexibility to member states over the thorny issue of industrial products by removing a set of numbers to calculate tariff ranges.
   The new proposals came along a revised text on agriculture which left main figures unchanged but sought to narrow the areas of disagreement among the WTO’s 151 members.
   Back in July, the WTO’s chief negotiatior on industrial goods — known in the WTO as non-agricultural market access, or NAMA — issued draft proposals that called for a cut in industrial tariffs charged by about 30 developing nations to less than 23 per cent.
   The proposals by ambassador Don Stephenson, who is also Canada’s representative at the WTO, drew flack particularly from the ‘NAMA 11’ group of developing nations that viewed them as unfair and too generous to developed countries.
   Stephenson’s revised draft kept to this range, but took away figures previously indicated to calculate tariff flexibilities.
   Originally he set a limit of 10 per cent for the number of products that developing countries could exclude from a cut in tariffs, but this failed to achieve consensus among member states.
   ‘This text provides a great deal more space for members to negotiate on all the issues,’ Stephenson told reporters.
   ‘It is not a step backwards, it reflects the state of negotiations. Have I given in to pressure? I listened to all of the members,’ he said.
   Chief agriculture negotiator Crawford Falconer, who is also New Zealand’s ambassador to the WTO, conceded that his own revised text contained ‘no surprises’.
   Back in July, he called on the United States to reduce its agricultural subsidies to 13-16.4 billion dollars (9-11.2 billion euros) — a range on which Washington says it is prepared to negotiate, but which was still criticised as too generous by several developing countries.
   Falconer has not changed any of the key formulas in his revised text, but trade sources said it clarified issues and was now ‘comprehensive’ across the three main agricultural issues of domestic support, market access and export subsidies.
   ‘There is no big surprise. I haven’t tried to invent solutions when they are not there,’ he told reporters.
   ‘I have tried to build a structure on which policital choices can be made. Members know very well what those choices are,’ he added.
   The WTO’s Doha round of talks aims to cut barriers and spur development but have been mired in deadlock and disagreement since their launch back in November 2001.

France officially imposed Saturday a ban on a strain of genetically modified corn produced by the US agribusiness giant Monsanto, with the publication of an agriculture ministry order in the state’s official journal.
   ‘The growing of corn seeds ... derived from genetically modified corn strain MON810 is prohibited on ëFrenchû territory,’ read the order signed by agriculture minister Michel Barnier.
   Monsanto’s 810 maize had been the only GM crop grown in France, but the French government last month began moving to ban its further use after a watchdog authority said it had ‘serious doubts’ about the product in a report that has been controversial even among the scientists who put it together.
   The agriculture ministry order said the ban would remain in force until a decision was taken whether to renew the authorisation for the GM strain to be sold on the French market.
   French corn farmers have already said the planned to challenge the ban in court.
   With the law requiring a hearing within three weeks, corn producers could still plant the variety of GM corn this spring if France’s highest administrative court supports their appeal, said Luc Esprit, director of the Association General of Corn Producers.
   The association estimates that without a ban some 100,000 hectares (250,000 acres) of the GM corn would be planted this year, up from 22,000 hectares in 2007.
   It estimates the ban would cause farmers losses of some 10 million euros (15 million dollars).
   France last month invoked an EU safeguard procedure to temporarily bar Monsanto’s 810 maize.
   It followed a report by France’s Provisional High Authority on GM Organisms that said it had ‘serious doubts’ as to the safety of MON810.
   It pointed to what it described as ‘a certain number of new scientific facts relating to a negative impact on flora and fauna.’

The head of the IMF on Saturday renewed his call for countries to consider fiscal measures to boost demand in the face of slowing economic growth caused by the US subprime loan crisis.
   The International Monetary Fund director general, Dominique Strauss-Kahn, also urged the world’s financial authorities to work together closely on efforts to shore up the global economy and financial markets.
   Monetary policy and coordination between central banks must be ‘the first line of defence’ against economic problems, he told reporters on the sidelines of a meeting of Group of Seven finance ministers in Tokyo.
   Countries should also consider coordinating on their fiscal policy, he said.
   ‘If we are talking about globalisation, if we are talking about more and more coordinated monetary policy, then at the same time we have to think about something which could look like (a) more coordinated fiscal response,’ he said.
   The US government has prepared a 150-billion-dollar package to stimulate its flagging economy, while the Federal Reserve has slashed interest rates several times since last September.
   But other G7 nations have shown less appetite for fiscal measures to boost domestic demand, particularly Japan which has huge national debts.

Iran plans to privatize 47 firms in its energy sector worth $90 billion and set up a holding company for these assets which it will list on four international exchanges, a National Iranian Oil Company executive said.
   The plan would see the oil and gas companies put under an umbrella group to attract foreign investment, Hojatollah Ghanimi-Fard, director of international affairs at NIOC told the London-based Middle East Economic Digest.
   He said the firms would also be listed in Tehran by 2014.
   ‘We decided the Iranian stock exchange may need to have some support financially from outside stock exchanges, especially for the oil sector, because the money involved is too much (for Iran),’ Ghanemi-Fard told the magazine.

The Japanese government is planning to nominate Bank of Japan deputy governor Toshiro Muto as the next head of the central bank, the Yomiuri Shimbun daily said Saturday.
   Toshihiko Fukui, the 72-year-old Bank of Japan governor who helped pilot the economy out of a decade-long slump, must stand down when his five-year term ends on March 19.
   The government may nominate Muto to parliament as the next Bank of Japan governor as soon as next week, the Yomiuri Shimbun said, without citing sources.
   He would need the approval of the opposition-controlled upper house of parliament to become head of the central bank.

The Citycell will launch an instant recharge system ‘e top-up’ for its pre- paid account holders today.
   The customers can electronically and easily recharge their pre-paid account, through ‘e top-up’ system without using any scratch card, said a press release.
   With this facility, the customers can recharge any amount of money within the range from Tk 10 to Tk 5,000.
   Initially, more than 900 designated outlets will be providing the ‘e top-up’ recharge facility all over the country.
   dollars.

The Export Import Bank of Bangladesh Limited and the Ahsania-Malaysia Hajj Investment and Finance Company Limited have signed a deal on collection of the AM-HIFC deposits at a ceremony held in the Dhaka city recently.
   Kazi Masihur Rahman, managing director of the EXIM Bank Limited, and Dr Rosli Bin Yaakop, managing director of the Ahsania-Malaysia Hajj Investment and Finance Company Limited, inked the agreement in the head office of the bank, said a press release.
   Senior officials of both the organisations were also present.
   The bank will collect the deposit money of the Hajj account holders of the AM-HIFC, according to the deal.

This week, precious metal platinum forged yet another record high on the back of flagging output from leading producer South Africa.
   Wheat also rocketed to an historic peak in Chicago, thanks to tumbling inventories and keen global demand, traders said.
   Elsewhere on global commodity markets, world oil prices drifted lower owing to concerns over a potential economic slowdown and soaring crude reserves in key consumer the United States.
   Towards the end of the week, trading was somewhat subdued owing to market holidays in many Asian countries for the Lunar New Year.
   PLATINUM and PALLADIUM: Platinum enjoyed a record high of 1,882 dollars per ounce on Friday, with sister metal palladium enjoying a six-year peak.
   Palladium hit 438.50 dollars — which was the highest level since January 2002.
   In recent weeks, power shortages in South Africa — a key producer of gold and platinum — have paralyzed mining activity and pressured prices.
    ‘Producers in South Africa are still suffering from power constraints and as there is no-quick fix; power shortages are likely to further impact platinum production,’ said Barclays Capital analysts.
    ‘Although further gains in palladium cannot be ruled out given its close relationship with platinum, the healthy level of palladium supplies coupled with high level of inventories are likely to cap upside potential.’
   On the London Platinum and Palladium Market, platinum soared to 1,876 dollars an ounce at the late fixing Friday from 1,755 dollars a week earlier.
   Palladium climbed to 438.25 dollars an ounce from 410.50 dollars.
   GOLD and SILVER: Gold prices edged higher but failed to improve on the all-time pinnacle of 936.92 dollars per ounce struck the previous week.
   On the London Bullion Market, gold firmed to 916.25 dollars at Friday’s late fixing from 914.75 dollars a week earlier.
   Silver fell to 16.95 dollars an ounce from 17.19 dollars.
   GRAINS and SOYA: Wheat hit a record high in Chicago at 10.93 dollars a bushel on Friday, amid dwindling US stockpiles and surging demand for exports, traders said.
   ‘It’s has been an uptrend week for wheat,’ said analyst Dax Wedemeyer at US Commodities.
   He added that low supplies and high demand have fuelled sharp price gains.
   By Friday on the Chicago Board of Trade, March-dated soyabean meal — used in animal feed — soared to 13.72 dollars, up from 12.89 dollars.
   The price of maize for March delivery rose to 5.12 dollars a bushel from 5.06 dollars a week earlier.
   Wheat for March delivery jumped to 10.93 dollars a bushel from 9.46 dollars.
   On LIFFE, the price per tonne of wheat for May delivery climbed to 192 pounds from 188.40 pounds a week earlier.
   OIL: Oil prices slinked lower after a topsy-turvey week.
   Prices staged a late rally on supply disruptions in Nigeria, Africa’s biggest exporter, and expectations of colder US weather.
   Energy giant Shell said Thursday it would not be able to honour all its export contracts from its southern Nigerian Bonny export terminal for the rest of February and March because of sabotage.
   Shell is Nigeria’s largest oil operator, accounting for around half of the country’s daily output of 2.6 million barrels at peak production, but unrest in the Niger Delta has slashed production by a quarter since January 2006.
   Oil prices had meanwhile closed down more than a dollar on Wednesday after the US government reported another rise in crude oil inventories amid mounting worries that demand for energy would fall owing to the weak US economy.
   The US Department of Energy said American crude inventories had jumped by 7.0 million barrels in the week ending February 1, marking a fourth straight rise in stocks.
   The increase was much higher than analysts’ consensus forecast which had predicted a gain of just 2.2 million barrels.
   US gasoline, or petrol, stockpiles increased by 3.6 million barrels, which also beat market expectations calling for a 1.7-million-barrel rise.
   On Friday, New York’s main oil futures contract, light sweet crude for delivery in March, drifted downwards to 89.24 dollars per barrel from 89.86 dollars a week earlier.
   Brent North Sea crude for March eased to 89.66 dollars from 90.51 dollars a week earlier.
   BASE METALS: Base metals prices diverged, but copper chalked up gains amid fears that slowing US economic growth could crimp demand, analysts said.
   Prices were mixed ‘amid thin trading due to the absence of market participants in China owing to the Chinese New Year holidays,’ said Barclays Capital analysts.
   On Friday, copper for delivery in three months rallied to 7,770 dollars a tonne on the London Metal Exchange from 7,305 dollars a week earlier.
   Three-month aluminium prices firmed to 2,714 dollars a tonne from 2,710 dollars.
   Three-month nickel eased to 27,795 dollars a tonne from 28,000 dollars.
   Three-month lead gained to 2,920 dollars a tonne from 2,850 dollars.
   Three-month zinc slid to 2,410 dollars a tonne from 2,515 dollars.
   Three-month tin decreased to 17,050 dollars a tonne from 17,100 dollars.
   COCOA: Cocoa prices hit five-year peaks on the back of strong speculative buying and supply problems in Ivory Coast, which is the world’s top exporter.
    ‘Fresh speculative buying interest coupled with industry cover taking pushed the market up,’ said Sucden analysts.
   By Friday on the LIFFE, London’s futures exchange, the price of cocoa for March delivery marched upwards to 1,228 pounds a tonne from 1,201 pounds a week earlier.
   On the New York Board of Trade (NYBOT), the May cocoa contract rose to 2,376 dollars a tonne, compared with 2,330 dollars a week earlier.
   COFFEE: Coffee prices in London leapt to a ten-year high of 2,130 dollars per tonne on news of falling output in Vietnam, which is the biggest producer of Robusta.
   High-caffeine Robusta, a bitter variety used in instant coffee, and the more expensive Arabica are the two most widely traded types of the commodity.
   By Friday on the LIFFE, Robusta quality for March delivery rose to 2,195 dollars a tonne from 2,117 dollars a week earlier.
   On the NYBOT, Arabica for March delivery increased to 142.45 US cents a pound from 137.80 cents.
   SUGAR: Sugar prices turned sour, falling after the previous week’s gains.
   By Friday on the LIFFE, the price per tonne of white sugar for May delivery declined to 345.30 pounds from 350.40 pounds a week earlier.
   On the NYBOT, the price of unrefined sugar for March delivery slid to 12.07 US cents a pound from 12.45 cents.
   RUBBER: Rubber prices were mixed as buyers remained sidelined in shortened trading ahead of the Chinese New Year holidays.

ADB okays Nepal water supply project loan
The Asian Development Bank said Friday it has agreed to revised terms of a delayed water supply project in Nepal for which the lender is the lead financier. The project involves boring a 26-kilometre (16-mile) tunnel through a mountain to bring water to 1.5 million residents of the chronically parched Kathmandu valley from the Melamchi river. The initial project design approved in 2000 called for a 464 million-dollar budget, but this was reduced to 317.3 million dollars under the new design, the Manila lender said in a statement. The project now ‘looks set to proceed,’ it added. ADB would lend 137 million dollars for the project, which is also supported by the Japan Bank for International Cooperation, the Japan International Cooperation Agency, the Nordic Development Fund and the Organization of Petroleum Exporting Countries Fund for International Development. ‘While the need to address the water crisis is growing, the changing circumstances surrounding the project required adjustments in scope and implementation arrangements,’ said Leonardus Boenawan Sondjaja, who heads the administration unit for the project.
— AFP

Sri Lanka unlikely to be hit by rice export ban by India
Sri Lanka, which imported 70,000 tonnes of rice from India during 2007, is likely to remain unaffected by a ban on exports of non-basmati rice imposed by New Delhi. This is due to the domestic crop that will hit the Sri Lankan market from this month end, according to traders here. ‘We are hopeful for being in a comfortable position on rice as the new domestic crop will start arriving from the end of this month and therefore, restrictions by India at this moment will not cause any problem,’ a spokesperson of an importers body said. India Friday withdrew concessions given to rice exporters, by announcing prohibition on export of non-basmati rice to strengthen supplies in the domestic market.
— AFP