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No share of the Rupali Bank Limited was traded at Dhaka Stock Exchange in the past two days after resumption of trading of the bank securities at the bourse on Sunday, said a DSE official.
   Market analysts said investors stayed away from buying of the Rupali Bank share mainly finding huge mismatch between its real value and offered price.
   However, 130 shares of the bank were traded at the Chittagong Stock Exchange at Tk 297,700 on Monday. The bank’s shares price closed on Monday at Tk 2290, down by 9.99 per cent from the previous day’s closing, according to the CSE official website. On Sunday, only 30 shares of the bank were traded at the port city bourse.
   The DSE official said, ‘There was no buy offer for the bank shares after resumption of the trading. But there were sale offers from the shareholders of the bank.’
   ‘Circuit breaker was active on trading of the bank shares at DSE,’ said the official. As per the circuit breaker limit, share of the bank could be traded at Tk 2614 at the minimum and Tk 3194.50 at the maximum.
   With suggestion of the Securities and Exchange Commission, the DSE and the CSE kept the share trading of Rupali Bank suspended since November 5, 2007 due to volatility in the bank’s share price over confusing reports on its disinvestment.
   The trading of the bank securities resumed after completion of the dematerialisation of sufficient number of its listed shares, said the DSE official.
   In May, the DSE in consultation with the SEC decided to resume the share trading of Rupali Bank after completion of dematerialisation of at least 50 per cent of the Bank’s publicly held shares. Around seven per cent shares of the bank are held by the general public.
   The demating of share means transfer of paper shares to electronic system. Demat trading or script-less trading makes share transaction more transparent, said stock market operators.
   The abortive effort to sell the state-owned Rupali Bank to Saudi prince plunged the bank’s shareholders to a worrying situation as they fear slump in the bank’s share price, said market analysts and investors. The apprehension has made stock market regulatory bodies cautious over the issue, they said.
   On March 10, the government rescinded a deal with Saudi prince Bandar Bin Mohammad Abdul Rahman Al Saud to sell off 93.26 per cent shares in Rupali Bank for $458 million following his non-compliance to pay the money and take over the bank. The government took the decision because of ‘no response’ from the investor for about a year.
   Rupali Bank share was traded at meagre Tk 500 on June 24, 2006 and jumped to Tk 2597.50 when the sell-off process continued in late 2006. On October 16, 2007, the bank’s share price jumped to Tk 3124.50. It, however, closed at Tk 2904.25 at the DSE on the day before the bourses halted its trading. The face value of the bank shares is Tk 100 each.

The Bangladesh Petroleum Corporation has started a move for putting state-level pressure to get back fuel delivery from Emarat, an oil supplying firm of the United Arab Emirate, the corporation officials said.
   Unilateral suspension of fuel delivery by Emarat prompted the corporation to start such a move for applying diplomatic pressure, they added.
   ‘We have started our process to move in the diplomatic line as Emarat made a breach of the agreement putting us into a trouble,’ said a senior BPC official.
   ‘We already approached our ministries and embassy concerned to create diplomatic pressure on the UAE to force its firm for resumption of fuel delivery to us,’ he added, saying, ‘such a dislocation will affect our internal distribution of fuels.’
   The state-run BPC struck a deal with Emarat to import 390,000 tonnes of diesel and octane and the consignments started reaching here from May this year, BPC sources said.
   But Emarat, after sending about 90,000 tonnes of fuels, abruptly stopped the supply and kept silent though the corporation issued series of reminders to it in this regard, the sources added.
   The situation took a bad turn when an oil tanker carrying over 32,000 tonnes of diesel, sent by Emarat, fled from the Kutubdia channel near the outer anchorage of the Chittagong port early this month without handing over the consignment of fuel to the BPC, sources added.
   Even that oil tanker ‘Port Luis’ did not make any declaration or intimation to the Chittagong Port Authority about its arrival and left for an unknown destination after staying here for six days, the sources also added.
   The BPC had initiated to import fuel from Emarat in a bid to reduce its dependence on its major oil supplier the Kuwait Petroleum Corporation which was demanding higher premium, the sources informed.
   The BPC imports 3.7 million tonnes of fuels annually and most of them are supplied by the Kuwait Petroleum Corporation, they added.

Dhaka stocks plummeted on Monday for six straight trading days as investors continued offloading their holdings being frustrated with the downtrend in recent weeks, said market operators.
   The general index of the Dhaka Stock Exchange lost 48.59 points or 1.70 per cent to close at 2810.36, lowest since February 25, while its blue chips index, DSE20, shed 14.48 points or 0.56 per cent to finish at 2585.78. On February 25, DSE general index was at 2797 points.
   Turnover at the DSE, however, increased to Tk 406.12 crore from the Sunday’s Tk 307.32 crore due to increased institutional buying and resumption of the share trading of the United Commercial Bank Limited, said a DSE stock broker.
   The broker said the long-standing downtrend upset the investors. Retail investors sold off their holdings fearing further fall in share prices, he said.
   The market lost steams in the previous five weeks as investors remained unnerved due to regulatory moves including, the SEC decision barring closed-end mutual funds from increasing their sizes through issuing bonus or right shares and the DSE’s market cooling measures.
   Prime Finance and Investment senior vice-present Moin Al Kashem said, ‘The market has been going through price correction after a buoyant period.’ He expected the market would rebound soon as institutional investors started to buy shares after the fall in prices.
   Of the total 231 issues traded at the DSE on Monday, 46 advanced, 174 declined and 11 remained unchanged.
   Chittagong Stock Exchange selective categories index lost 111.39 points or 1.97 per cent to close at 5556.72 while its blue chips index, CSE30, shed 170.76 points or 2.15 per cent to finish at 7758.22.
   Of the total 143 issues traded at the CSE, 25 posted gains, 112 dropped and six remained unchanged.
   Turnover at the CSE went up to Tk 55.77 crore from Tk 42.18 crore.
   The UCBL topped the turnover leaders at the DSE with total transaction of Tk 48.81 crore. Share price of the bank gained 18.13 per cent to close at Tk 6628.25 on Monday. The bank’s shares were traded at the spot market.
   The trading of shares of the UCBL was remained halted at the bourses since June 12 last. The DSE kept trading suspended over non-availability of official confirmation of a judgment regarding the pending issues of annual general meetings and dividend, said a DSE senior official.
   On July 16, the bank informed the bourses that it had decided to hold 20th, 21st, 22nd and 23rd annual general meetings of the bank for the accounting years 2002, 2003, 2004 and 2005 on August 17. The bank has also declared July 30 as fresh ‘record date’ for the years, the bank informed. ‘The board reconfirmed the earlier declared nine bonus shares for every 10 ordinary shares for the years 2002, 2003 and 2004, and five bonus shares for every 10 ordinary shares for the year 2005.’
   However, the bank informed that there was a provisional civil petition for leave to appeal before the appellate division of Supreme Court for staying operation of the judgment and order dated June 11 passed by the High Court division in company matter no 01 of 2008, was yet to be settled, the DSE official website reported on Monday.

Net profit of the Bangladesh Bank jumped by 51 per cent in the last fiscal over the rise of foreign exchange reserve and government borrowings.
   The central bank profit stood at Tk 5,216 crore in the FY08, which was Tk 3,460 crore in the previous fiscal, said a high official of the central bank.
   ‘Bangladesh Bank invests its forex reserve for short-term period under a prudent policy,’ he said.
   In most of the cases, the central bank invests in money market in Singapore and Hong Kong, he added.
   The forex reserve soared to about $6 billion at the end of the last fiscal.
   ‘Investment in foreign markets is the highest income generating source of the Bangladesh Bank and it gained about Tk 2,500 crore profit from the foreign investment last fiscal,’ he said.
   The other major income sources are the revaluation gain, interest of government borrowing, earning from banks and interest of credit extended to its employees, he said.
   Revaluation gain occurs due to upward fluctuation in the exchange rate and as the forex reserve is about $6 billion, the central bank gained about Tk 1,800 crore profit from the fluctuation, he said.
   The government has an accumulated borrowing of about Tk 20,000 crore from the central bank and it pays interest on it while the central bankers also took about Tk 1,200 crore in loans, especially home loans, where interest rate is 5 per cent, he explained.
   Interest on refinancing scheme and penalty earnings from the banks are another sources of income of the central bank, he said.
   Out of the total profit,
   revaluation gain will be transferred to the reserve fund and about Tk 300 crore will be transferred to housing loan scheme, SME scheme and women entrepreneurs’ scheme, he added.
   It is expected that the central bank can contribute about Tk 3,000 crore to the national exchequer, which is next to the contribution of the National Board of revenue, the central banker said.

A four-day Malaysian halal products fair begins at a city hotel tomorrow aiming at boosting business of halal products and strengthening the trade link with Bangladesh.
   Bangladesh has a sizeable chunk in regional markets for halal products as a significant portion of the $580 billion global consumption of halal items is in Indian sub-continent, said organisers of the fair at a press conference held in the Dhaka Sheraton Hotel on Monday.
   Malaysian ministry of entrepreneur cooperative development and EPIC TIPS, a company, in collaboration with the Malaysian high commission in Dhaka, are organising the fair where some 30 small and medium enterprises and over 80 business communities and officials from Malaysia will participate at the fair.
   Secretary general of the Malaysian ministry of entrepreneur cooperative development Musa Muhammad, who is expected to arrive in Dhaka today, will open the fair.
   High commissioner of Malaysia in Bangladesh Abdul Malek Bin Abdul Aziz attended at the programme while the president of Bangladesh-Malaysia Chambers of Commerce Salauddin Kashem Khan and president of EPIC TIPS Hajah Hazizah Haji Awang among others also spoke at the press conference.
   The main objective of the Halal Malaysia Week is to become the undisputed platform for the business communities of Bangladesh and Malaysia to foster and spur bigger business linkage and collaborations, said the Malaysian high commissioner in Bangladesh.

The Calcutta-Dhaka service of Air India Express, the low-cost carrier of Air India, made debut on Sunday with the inaugural flight carrying just one passenger to the Bangladesh capital, according to the Indian daily Telegraph on July 21.
   The 186-seater Boeing 737-800 arrived at Netaji Subhas Chandra Bose International Airport from Dhaka in the morning with only four passengers, said airport sources.
   ‘It took off from Calcutta at 2.05pm with two passengers. One of them was making an onward journey from Bangkok,’ said an immigration official.
   Md Moazzem Hussain, a 58-year-old Australian citizen, was the only passenger to board the flight from Calcutta. According to airline sources, there are very few bookings for the next two days.
   A Boeing 737-800 aircraft burns around three tonne of aviation turbine fuel, which costs around Rs 2.4 lakh for a round trip between Calcutta and Dhaka.
   The flight will operate throughout the week, except Saturday, with a minimum fair of about Rs 3,000. It is an extension of the airline’s services on the Singapore and Bangkok sectors.

M Wahidul Haque has been elected chairman and Sajedur Seraj vice-chairman of the AB Bank Limited, said a press release.
   Born in 1952, M Wahidul Haque holds a bachelor’s degree in arts as well as in the field of law.
   Currently the managing director of Deundi Tea Company (UK) Limited, Haque was a member of former managing committee of Bangladesh Employers’ Federation and immediate past chairman of the Bangladesh Tea Association.
   Sajedur Seraj was born in Chittagong in 1970. A sponsor shareholder of the bank, Seraj is a business graduate from the prestigious ACIB, United Kingdom.
   He is also a director of Hexagon Chemicals Complex Ltd, Elite International Ltd, Elite Chemical Industries and Elite Oil Refinery Ltd.

Golam Mainuddin has been appointed chairman of the British American Tobacco Bangladesh Company Limited effective from August 3.
   After a career spanning 26 years in BAT Bangladesh, Mainuddin will retire from his current position as deputy managing director to become non-executive chairman of the company, said a press release.
   Mainuddin started his career in BAT Bangladesh as leaf operations manager in 1982 after a 13 year stint in tea plantation.
   He became head of leaf in 1985, and later a member
   of the board of directors in 1986. He assumed the role of deputy managing director in 1997.
   Mainuddin was instrumental in quality improvement of Bangladeshi tobacco. During his tenure with the company, he expanded BAT Bangladesh’s afforestation programme.
   Till date, the company distributed over 5.5 crores of saplings, making it the largest private sector afforestation programme in Bangladesh.

Zimbabwe wants to develop a good partnership with Bangladesh, said Zimbabwean deputy minister for small and medium enterprises development KK Mutiwekuziwa on Monday.
   ‘Bangladesh is a fast growing country and my country wants to share your experience,’ he said at a meet the press programme at the National Press Club in the Dhaka city.
   The deputy minister came to Bangladesh on a nine-day private tour to explore business opportunity in Bangladesh.
   When asked about the political situation in Harare, he replied that he did not want to talk about politics.
   About the hyperinflation of 2.2 million per cent in Zimbabwe, he said, ‘You should visit the country to see yourself what is happening in there.’
   The minister said his country wanted to recruit highly skilled person from Bangladesh.
   ‘We immediately want to recruit 100 doctors, 50 lawyers and 50 executives,’ he said.
   Harare wants to have cultural exchange programmes between the two countries, he added.
   The Zimbabwean government has adopted ‘Look East’ policy and Dhaka has immense potential to fulfil the needs of Harare, said Boniface Mutize, member of parliament and managing director of LI (P/L), a business organisation.
   ‘We had a fruitful discussion with business leaders in Bangladesh and invited them to visit Harare,’ he said.

Construction of the $1.2 billion Thu Thiem Software Park has begun in HCM City’s District 2 with a ground-breaking ceremony by SaigonTel-Teco joint venture.
   The software park in An Loi Dong Ward is the first construction project in Thu Thiem Urban Area.
   To be built on 65ha, the park will have 75 per cent of space devoted to office areas, 15 per cent to commercial and retail areas, and 10 per cent to residential areas.
   Space will be available for rent to IT experts and highly skilled staff who decide to work in software production and processing for export and microchip design.
   The project has a training centre to develop human resources and provide a skilled workforce to tenants.
   The centre will also carry out activities to promote trade and investment in the Thu Thiem New Urban Area.
   ‘The operation of Thu Thiem Software Park will contribute to the process of transforming Viet Nam’s cheap labour force to a high-tech one, and attract other companies to invest in the technology industry,’ according to a press release from the joint venture.
   When the park becomes operational, it is expected to attract an additional $2.95 billion in foreign direct investment, contribute $4.3 billion in taxes, and create $6.5 billion in annual revenue.
   The park is expected to create 40,000 new jobs during the construction period and 70,000 jobs for software specialists and IT engineers.
   As the biggest single software park project in Vietnam as well as in the Asean region, the park will contribute significantly to the city’s structural shift towards service sector development.
   ‘This project will also make a significant contribution to the national economy and raise Viet Nam’s young knowledge-based technology to a world level,’ says the press release.
   SaigonTel-Teco was granted a license for Thu Thiem Software Park Project by the HCM City People’s Committee on June 11.
   SaigonTel-Teco is a joint venture between Sai Gon Telecommunication&Technologies Co, a subsidiary of the Sai Gon Invest Group and the Singaporean TA Associates International Pte Ltd, a member of TECO Group from Taiwan. SaigonTel contributes 20 per cent of the joint venture’s capital.
   SGI is one of the top economic groups of Vietnam, specialising in industrial parks and high-tech parks. The group is operating 20 industrial parks throughout the country.

Malaysia’s inflation rate could hit seven per cent in June in a ‘one-off’ hike, a senior minister warned Monday following the recent 41 per cent rise in fuel prices.
   Nor Mohamed Yakcop, second finance minister, said for June and July, inflation could be slightly higher, reflecting the rise in the cost of goods, after June’s fuel price increase.
   ‘This is a one-off inflation as oil prices have gone up ... food prices have gone up. It is a cost-pushed inflation,’ he said.
   But Nor Mohamed was confident inflation for 2008 would be contained at five per cent.
   ‘My own feeling as a whole is that inflation will be contained. In my own expectations — not more than five per cent for the year as a whole,’ he was quoted as saying on private TV3 television.
   The central bank has said the June inflation rate is expected to surge above six per cent due to the fuel price hike, raising speculation that rates will be hiked.
   Economists expect the central bank to announce an increase in borrowing costs by 25 basis points at the end of July to counter a jump in inflation, when it holds its monetary policy.
   Malaysia’s key interest rate now stands at 3.50 per cent.
   Prime Minister Abdullah Ahmad Badawi last month announced a deeply unpopular 41 per cent increase in petrol prices to cut the country’s subsidies bill, which would have reached 17 billion dollars this year.
   May’s inflation rate rose to a 22-month high of 3.8 per cent from 3.0 per cent in April and 2.8 per cent the month earlier, driven by higher food prices, while for the first four months of the year, it averaged 2.7 per cent.

An agreement on EL DORADO .... remittance and payment system was signed between the BRAC Bank Limited and the Bank Asia Limited recently.
   AEA Muhaimen, managing director and chief executive officer of BRAC Bank, and Syed Anisul Huq, president and managing director of Bank Asia, signed the agreement for their respective banks, said a press release.
   EL DORADO will enable customers to transfer money electronically within Bangladesh in the quickest possible way. EL DQRADO is being developed under the Remittances and Payments Challenges Fund jointly sponsored by DFID, UK and Bangladesh Bank.
   Kaiser Tamiz Amin, deputy managing director and chief operating officer of BRAC Bank, Erfanuddin Ahmed, Deputy Managing Director & Head of Operations and Mr. Irteza Reza Chowdhury, Senior Executive Vice President of Bank Asia Limited were alsb present.

South Korea’ s milk producers and processors agreed on a 20 per cent hike in the supply price of milk on Saturday, adding to the burden of consumers suffering from rising inflation.
   The two sides decided to raise the supply price of un-pasteurized milk from 584 won (0.58 cents) per litre to 704 won (70 cents) per litre, as rising feed prices push up costs.
   This is the first time in four years that price of milk will go up. The Korea Dairy and Beef Farmers’ Association claimed that feed costs had surged by 40 to 50 per cent from 2004.
   The nation’s milk producers and processors have engaged in the 13th round of negotiations on the price hike since May.
   Milk producers called for a 25.7 per cent increase, while milk processors insisted on no more than 17.1 per cent. The agriculture ministry, which mediated the dispute, proposed an 18.5 per cent hike, but the offering was rebuffed by milk producers.
   Milk producers even threatened to halt the supply of raw milk unless their demands were met. The two sides reached a last-minute agreement on the price hike on Saturday.
   The prices of milk and other dairy products will increase more than the 20 per cent due to rising milk and fuel costs.
   The price of a litre of milk is expected to rise to over 2,200 won ($2.18), from the current 1,850 won ($1.84).
   Consumer inflation hit a 10-year high of 5.5 per cent in June in 2008 on soaring oil and commodity prices.

The United States and European Union took aim at emerging economies at crucial WTO trade talks in Geneva on Monday, warning them to open up their markets if the seven-year Doha Round is to succeed.
   EU trade commissioner Peter Mandelson even implied an ultimatum, saying he had gone out on a limb on agriculture and stressing that agreement was now conditional on developing countries making ‘real’ cuts in industrial tariffs.
   Mandelson, who is under strong political pressure, notably from France, to harden his stance on industrial issues, said: ‘They must be real. These cuts must provide some new market access in practice.
   ‘That is the political bottom line. Nothing else will work for us. Nothing else will close the deal.’
   The EU revealed it was prepared to go even further than hitherto on farm issues, offering to extend proposed cuts in its tariffs on farm produce to 60 per cent from 54 per cent.
   Earlier, Mandelson had said Europe was prepared to make ‘painful’ cuts in its payments to farmers but only if it received guarantees of progress on other topics such as industrial tariffs and services.
   ‘We are prepared to offer more than others in this round, but everyone must understand that we need something in return,’ he said.
   The EUs, offers, he warned ‘will not remain on the table indefinitely.’
   Ministers from 35 key nations began critical talks under the aegis of the World Trade Organization here on Monday after seven years of confrontation and crisis.
   US Trade Representative Susan Schwab called on emerging markets to play their part in the process.
   She highlighted the ‘fundamentally critical role’ of the emerging markets to the Round, noting that much of the developing world itself did not have access to the rapidly emerging markets.
   ‘Seventy per cent of the tariffs paid by developing countries are paid by other developing countries, they aren’t paid by developed countries,’ she said.
   The United States was prepared to make a contribution in return for contributions from emerging countries.
   The ‘vast overwhelming contribution’ had to come through market liberalisation rather than subsidy cuts.
   The so-called Doha Development Round of negotiations was launched with great fanfare in the Qatari capital in November 2001.
   It has been deadlocked as developed and developing countries show brinkmanship over concessions on issues such as agricultural subsidies and tariffs on industrial goods.
   Any draft agreement thrashed out here would then have to go before all 152 members of the World Trade Organization.
   An already difficult situation was not helped over the weekend when a remark by a Brazilian minister, comparing the tactics of advanced countries to the methods of the Nazi propaganda chief Joseph Goebbels, sparked a row with Washington’s representative.
   Celso made his contentious comment at a news conference on Saturday in response to claims by the industrialised countries that they had offered concessions on agricultural tariffs.
   He said those claims reminded him of a remark by Nazi propaganda chief Joseph Goebbels that ‘if a lie is repeated enough times, it becomes the truth.’
   On Monday, Schwab declined to respond further.
   She said there was a ‘sense of anticipation, a sense of momentum and a great desire to see a successful conclusion’ to the Round. Egyptian Trade and Industry Minister Rachid Mohamed Rachid also expressed optimism ‘because people expect nothing out of this week — because when expectation is so low, people are becoming more relaxed to negotiate.’
   Developing countries have been pressing for lower farm subsidies and agricultural tariffs in the developed world.
   Industrialised states are demanding in return that developing countries make their markets more accessible to imported services and manufactured goods.
   WTO director general Pascal Lamy of France argues a Doha deal could inject between 50 billion and 100 billion dollars each year into the world economy and be of enormous benefit to poor countries.
   For the meeting to be a success, the WTO’s 152 members will have to agree on ‘modalities’ — the key per centages for tariff cuts that would form the basis for any comprehensive deal.
   The Geneva talks have added urgency because all sides know that the United States will have a new administration and a new Congress next year.

The half-yearly business conference of the Prime Bank Limited was held in the Dhaka city on Saturday.
   Azam J Chowdhury, chairman of the board of director of the bank, was present in the conference as chief guest, Maksudur Rahman Sarkar, director, and Md Shirajul Islam Mollah, former director, attended the conference as special guests while Nasiruddin Ahmed, acting managing director of the bank, presided over the conference, said a press release.
   Mahbubul Alam, RQM Forkan and Syed Mahbubur Rahman, deputy managing directors, heads of the divisions, heads of branches participated in the conference.
   Md Tabarak Hossain Bhuiyan, executive vice-president and head of hr division, conducted the conference.

Hong Kong’s inflation rate hit 6.1 per cent in June as food and energy costs continued to spiral upwards, official figures showed Monday in the latest sign of Asia’s battle with surging prices.
   News of the annual jump comes just days after the city’s government introduced a raft of measures to try and shield its poorest residents from the spiralling cost of living, hoping the move will dampen growing discontent here.
   Inflation is on the march across Asia, driven up by soaring fuel and food costs, raising fears that it will curb consumer spending, hit business profits and lead to slower economic growth, especially if interest rates rise.
   The underlying inflation rate in the southern Chinese territory was also 6.1 per cent, up from 5.7 per cent year-on-year in May, according to figures released by the Census and Statistics Department.
   A government spokesman said sustained increases in food and energy costs, and the strength of the local economy, had contributed to upward pressure on housing rents and the price of various goods and services.
   ‘The inflation outlook for the rest of the year remains uncertain, due to the volatile international food and energy prices,’ the spokesman said in a statement.
   June inflation was higher than the 5.8 per cent rise forecast by economists surveyed by Dow Jones Newswires. The government said the rise was mainly due to costlier private housing rentals, package tour charges and rice.
   Rice prices have risen 64.0 per cent in the past year, while staple meat pork is up 48.2 per cent and beef some 50.8 per cent, the figures showed.
   The price of electricity, gas and water went up 7.4 per cent year-on-year, while housing rentals went up 6.3 per cent.
   Hong Kong’s government has forecast inflation will come in at 4.5 per cent in 2008, up from 2007’s 2.0 per cent.
   The city’s chief executive Donald Tsang last week unveiled a package worth 11 billion Hong Kong dollars (US$1.4b) to try and ease the effect of rising prices.
   The measures target lower- and middle-income groups and include transport subsidies for students, an electricity subsidy for every household and an extra allowance for pensioners.
   The move was unusual for Hong Kong, which prides itself on its laissez-faire economic approach, but comes as the popularity of the city’s leaders wanes.
   Inflation is posing a threat to economic growth across Asia. It has also risen markedly in the West, complicating the task for policymakers amid a US-led global economic slowdown.
   Southeast Asian foreign ministers said Monday after annual talks in Singapore that rising oil and food prices posed a serious challenge to the social and economic welfare of their region.

Russian billionaire Alexei Mordashov has pulled even with Norwegian John Fredriksen at a 15 per cent stake in TUI as they bicker over a roadmap for the leading European travel group.
   Mordashov boosted his stake in TUI to 15.03 per cent, a statement by his Cyprus-based S-Group said on Monday.
   The statement added that the increase from 10 per cent ‘strengthens our position as a long-term strategic investor and our commitment to developing the tourism business of TUI.’
   Mordashov backs the strategy of TUI boss Michael Frenzel, while Fredriksen has led a shareholder revolt against the company’s management and bid earlier this month for Mordashov’s 10-per cent stake to gain a decisive holding in TUI.
   Frenzel wants to sell the group’s Hapag-Lloyd shipping unit to concentrate on tourism, where TUI is a European leader, and S-Group’s statement made it clear Mordashov would hang on to his holding.
   It also said: ‘We believe that the separation of TUI’s container shipping division, Hapag-Lloyd, serves the best interest of all shareholders.’
   Market rumours have said that the world’s fifth-biggest shipping firm could be sold to Singapore’s Neptune Orient Lines, for an estimated value of between four to five billion euros ($6.3-8.0b).
   Fredriksen, who made his fortune in the container shipping sector, challenges such a move and demands that shareholders be consulted on the matter.
   The Norwegian wants TUI to run its tourism and shipping units separately, with investors able to decide whether to back one or both operations.
   He has also called for Frenzel to resign, underscoring that TUI has lost much of its value during his 14-year reign.
   But Mordashov reiterated his backing for Frenzel on Monday, with S-Group’s statement saying it ‘continuously supports the TUI executive board and the supervisory board in the decision to focus the business on tourism.’
   Mordashov has already mooted launching a joint venture with TUI on the fast-growing Russian tourism market.

LG Electronics Inc increased quarterly earnings by 84 per cent with strong results in mobile phones and at its LCD joint venture, but the South Korean firm faces a tougher second half amid a global economic downturn.
   LG, whose record net profit was below analysts’ forecasts, predicted revenues would dip in the third quarter as consumer demand eased, and its chief financial officer said the global slowdown could last up to 18 months.
   ‘We are cautious about the outlook for the second half,’ said CFO David Jung. ‘We have seen the impact of the slowdown on our orders since June.’
   Many analysts said the April-June quarter would represent a peak for the year.
   ‘There are several risks in the second half of the year to 2009, which are the global downturn of the mobile phone market and the weakening display market due to a supply glut,’ said Jason Kang, analyst at Daewoo Securities.
   LG, the world’s fourth-largest mobile maker, said it expected mobile phone margins and shipments to fall in the third quarter, although margins should remain above 10 per cent.
   Its second-quarter operating profit margin on handsets was 14.4 per cent on a global basis, a historical high and better than 13.9 per cent in the first.
   LG, which owns 38 per cent of LG Display Co Ltd, benefited from another banner quarter at the world’s No 2 liquid crystal display maker, which more than trebled quarterly net profit from a year ago on strong demand for flat-screen panels for TVs and computer monitors.
   But flat panel prices are set to fall this quarter with the LCD market in oversupply, LG told an investor meeting.
   ‘LG Electronics is the largest shareholder in LG Display, and a gloomy outlook for the display industry is making prospects much weaker,’ said John Park, an analyst at Daishin Securities.
   LG posted April-June net profit of 707 billion won ($696.5m) versus 385 billion won a year ago. It missed a forecast for 802 billion won by 10 analysts surveyed by Reuters due to losses related to foreign exchange debt and higher taxes.
   Operating profit on a global basis climbed to a record 856 billion won from 464 billion won, slightly beating expectations.
   Quarterly revenue on a global basis rose 22 per cent to 12.7 trillion won.
   Shares in LG, valued at more than $16 billion, closed up 4.1 per cent at 113,500 won after jumping almost 7 per cent before the earnings announcement, outpacing the wider market’s 3.5 per cent gain.
   LG, which ranks below Nokia, Samsung Electronics and Motorola in making mobiles, sold a record 27.7 million phones in the second quarter, versus 24.4 million in January-March.
   ‘If Apple’s iPhone sells more than expected, LG Electronics is going to face a situation where it will have to cut its high-end cellphone prices,’ Park said.
   LG’s results offer a strong contrast to smaller rival Sony Ericsson, which on Friday posted a small quarterly operating loss, hit hard by a fall in demand for its more expensive phones, and predicted a tough road ahead.

Britain’s economic ‘horror movie’ will continue in the months to come, with growth slowing considerably, while unemployment will rise and inflation will remain above government targets, an influential economic forecasting group said Monday.
   The ITEM Club, which is backed by accounting giant Ernst and Young, predicts Britain’s economy will grow by one per cent in 2009, much slower than finance minister Alistair Darling’s own forecasts of 2.25-2.75 per cent, made when he delivered the annual budget in March.
   Its report comes after Darling himself said in a newspaper interview published Saturday that the economic downturn here would be more ‘profound’ than he expected, adding that the economic picture was ‘at the bottom end’ of his range.
   The forecasting group said that while the picture was not as bleak as the struggles that preceded a recession in the early 1990s, it was imperative that wages be kept in check so as not to let inflation, already at a 16-year high of 3.8 per cent annually, get out of control.
   ‘As with any horror movie, there is an escape route but it is not an easy one,’ the report read.
   ‘It is imperative that wage increases remain restrained, despite the tremendous pressure from food and energy cost inflation... A general outbreak of wage inflation would spell disaster, requiring much higher interest rates and a recession in output to get inflation back under control.’
   According to the ITEM Club, house prices will drop on average by about 10 per cent through this year, and a further six per cent through 2009, and year-on-year inflation will remain above the government’s two per cent target for the coming 12 months.
   Unemployment, meanwhile, will rise to two million by 2010, compared to 1.6 million at the end of last year.
   ‘Both on the high street and in the housing market, it is going to get a great deal worse before it gets better,’ ITEM Club Chief Economist Peter Spencer said.

Private equity firms Silver Lake and Providence Equity Partners have teamed up to bid for a stake in a unit of China’s Huawei Technologies, sources involved in the process said on Monday, in a deal that could fetch more than $2 billion.
   Another team is AEA Investors, a mid-sized private equity firm, and General Atlantic, according to one source involved in the process. As mid-sized firms, that team would likely have to bring in a third partner to clinch Huawei’s fast-growing mobile devices division.
   US private equity firms have jumped at the chance to pursue the unit, attracted to its size and growth potential — not just in China but across the globe. Huawei has made no secret of its plans to expand into the United States.
   If priced at more than $2 billion, a Huawei deal would be the fifth largest cross-border inbound deal in China on record, and the largest so far this year, according to Thomson Reuters data.
   It would be the second largest private equity deal in China ever, after ICBC’s acquisition by an investor group comprising Goldman Sachs, Allianz and American Express.
   Silver Lake and AEA were among the five firms that made it through round one of the Huawei auction, sources have said. Bain Capital, Goldman Sachs’ private equity group and Kohlberg Kravis Roberts & Co were the other firms that made it through.
   All firms mentioned have declined to comment on the process.
   As in any auction, teams can change and bidders can drop out at any minute. Bidders are reviewing financial documents for due diligence, and another round of offers is expected in the next few weeks, said the sources, who were not authorised to speak to the media.
   A Huawei spokesman did not return a message seeking comment. Morgan Stanley, the bank running the auction, declined to comment.

The dollar weakened against the euro and yen in European trade on Monday as investors banked profits amid lingering concerns over the US economy and its financial sector, analysts said.
   In morning deals, the European single currency rose to 1.5884, from 1.5846 in New York late on Friday.
   Against the Japanese currency, the dollar fell to 106.64 yen from 106.95.
   ‘The euro/dollar is likely to remain in a relatively tight range and stuck between economic data releases out of the US and the eurozone,’ said Commerzbank analyst Antje Praefcke.
   ‘Volatility should remain elevated, though. The market is worried about a possible stagflation in the US and maintains its rather dollar negative mood, especially since this week’s US fundamentals (initial claims, housing data, durable goods orders) are likely to underline this view.’
   Stagflation is the combination of rising prices, which forces central banks to keep interest rates high, and weak economic growth.
   The dollar had firmed on Friday during US trading hours after banking giant Citigroup, among the hardest hit by the weak American housing market, posted a smaller-than-expected quarterly loss.
   The news from Citigroup, one of the biggest US banks, helped calm jitters about the health of the financial sector in the world’s largest economy.
   Last Tuesday, however, worries about the US financial sector had sent the euro soaring to a historic peak of 1.6038 dollars.
   Elsewhere on Monday, sterling came under pressure after Bank of England policy-maker David Blanchflower warned that the British economy was heading into recession and that interest rates should fall to ‘well below’ their current level of 5.0 per cent.
   The widely accepted definition of a recession is two or more quarters running of contration of output.
   ‘I think we are going into recession and we are probably in one right now,’ Blanchflower told The Guardian newspaper, based in London.
   ‘We will probably have three or four quarters of negative growth, but the risks are to the downside.
   It’s not too late to stop it, but we have to act right now. Monetary policy has been far too tight for too long. We can’t just sit and do nothing as we have done for too long.’
   Blanchflower had been the lone voice calling for a cut in rates at the central bank’s May and June meetings. The Bank of England has shied away from reducing borrowing costs owing to surging inflation caused by higher energy and food prices.
   British 12-month inflation jumped to a 16-year high point of 3.8 per cent in June, official data revealed last week.
   In early London trading on Monday, the euro changed hands at 1.5884 dollars against 1.5846 late on Friday, at 169.42 yen (169.47), 0.7961 pounds (0.7926) and 1.6209 Swiss francs (1.6202).
   The dollar stood at 106.64 yen (106.95) and 1.0207 Swiss francs (1.0223).
   The pound was at 1.9949 dollars (1.9990).
   On the London Bullion Market, the price of gold increased to 965.83 dollars per ounce from 959.75 dollars late on Friday.

Oil prices rose on Monday on news of stormy weather which could threaten energy facilities in the US Gulf of Mexico, and after fruitless talks between the US and crude producer Iran, traders said.
   However after heavy losses last week that were linked to fears of slowing global growth and lower demand, oil prices remained far below the record highs of about 147 dollars per barrel that were struck earlier this month.
   Brent North Sea crude for September delivery added 1.71 dollars to 131.90 dollars in morning London trade.
   New York’s main contract, light sweet crude for August delivery, rose 1.62 dollars to 130.50 dollars a barrel.
   ‘Oil prices were up partially on the back of the weather concerns as we saw the first tropical storm of 2008 in the Atlantic,’ said Sucden analyst Michael Davies.
   The hurricane season, which began in June and lasts until the end of November, had been largely uneventful until now.
   ‘Tropical storm Dolly was heading for Mexico’s Yucatan Peninsula and this has served as a reminder that there remains a threat to oil and gas facilities in the Gulf of Mexico while we remain in the hurricane season,’ added Davies.
   ‘However, at the moment the US National Hurricane Centre is expecting the storm to pose no immediate threat.’
   The most hurricane-prone US region is the southeastern coastline, running from the states of North Carolina to Texas.
   Meanwhile, weekend talks in Geneva aimed at convincing crude producer Iran to halt its nuclear programme made little progress, dealers said.
   The US and other major powers suspect Iran’s nuclear drive aims to make weapons, but Tehran insists its objective is only energy production.
   ‘The weekend meeting involving Iran really didn’t resolve the issues surrounding the nuclear programme so the geopolitical risk premium has increased,’ said Commonwealth Bank of Australia strategist David Moore.
   ‘I think that was the factor behind the lift in prices,’ he said from Sydney.
   US secretary of state Condoleezza Rice upped the pressure on Tehran on Monday, warning Iran had two weeks to respond seriously to an international offer to halt its sensitive nuclear work or face further ‘punitive measures.’
   The Geneva meeting sent a ‘very strong message to the Iranians that they can’t go and stall ... and that they have to make a decision,’ Rice told reporters travelling with her to the Middle East.
   The Islamic republic is the world’s fourth-biggest producer of crude oil, and tension over its nuclear effort has helped push prices to record highs recently.
   Washington’s decision to send Under Secretary of State William Burns to the talks marked a major US policy shift, which has not had diplomatic relations with Iran since 1980.

Repo auction held
The Repo auction of Bangladesh Bank for commercial banks and financial institutions was held on Monday. Three bids of one-day tenor, amounting to total Tk 579.00 crore and two bids of seven-day tenor amounting to total of Tk 753.00 crore, in total five bids amounting to Tk 1332.00 crore, were received and they were accepted. The rate of interest of the accepted bids was 8.50 per cent per annum, says a BB press release.
— BSS

BKB earns Tk 105 crore profit in Ctg zones
Two zones of Bangladesh Krishi Bank, Chittagong earned Tk 105.45 crore profit in fiscal 2007-2008, the amount being the highest in last 10 years. In the previous fiscal, the bank’s profit stood at Taka 82.41 crore, officials said. In 2007-2008, they said, the BKB disbursed agricultural loans of Taka 349.98 crore among the 64,894 people through its 54 branches under two zones in Chittagong district against the target of Tk 291.82 crore. Of the total disbursed loans, Tk 318.84 crore was distributed among the 23,010 people through 35 branches under Chittagong region while Tk 31.14 crore among the 41,884 people through 19 branches under Patiya zone. The break-up of the distributed loans: Tk 119.49 crore for crop cultivation, Tk 6.46 for fish cultivation, Tk 6.26 crore for dairy and poultry firms and the rest amount for other agro- based sectors. The Bank realised Tk 275.90 crore outstanding loans from the beneficiaries during previous fiscal. BKB officials said they have set a target to disburse Tk 556 crore in loans in agriculture and other agro sub-sectors like crops cultivation, diary and poultry farming, purchasing agricultural and irrigation equipment during the current fiscal (2008-2009) through 54 branches in the district.
— BSS