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The Securities and Exchange Commission at a meeting on Thursday decided in principle to amend its mutual fund rules to bar closed-end mutual fund in increasing their size, said a senior official of the SEC.
   ‘We have also decided in principle that no mutual fund will be allowed to give any pre-emptive rights for shares to unit-holders of any existing mutual fund,’ SEC executive director Farhad Ahmed told reporters.
   He said the commission would publish the draft amendments on the newspapers for inviting public suggestions. Then, the SEC will finalise the amendments to the rules, he added.
   ‘There is scope of ambiguity in the existing rules over the issue of increasing size of closed-end mutual funds,’ said the SEC official adding that the amendments would make the issue comprehensible.
   Closed-end mutual funds have fixed size and tenure, and are listed with the stock exchanges, he said.
   The SEC meeting on Thursday also extended timeline of submitting bank certificate for beneficiary account holders to regularise their accounts to September 30 from June 30 with a new provision that from now on a BO account holder would be allowed to regularise their accounts also with submitting copy of national ID card, signed by account holder himself/herself.
   ‘The commission will not extend the timeline further for submitting bank certificate or national ID card,’ said Farhad.
   Under the recent amendments to BO accounts rules, every applicant for opening BO accounts is required to submit a bank certificate containing name of the applicant, names of father and mother, and bank account number. BO accounts opened prior to this order must be regularised by depository participants as per the same order.
   The SEC on Thursday also approved the initial public offering applications of Standard Insurance Ltd and Maksons Spinning Mills Ltd for raising Tk 9 crore and Tk 8 crore respectively from the capital market.
   ‘Standard Insurance will float 9 lakh shares with face value of Tk 100 each and Maksons Spinning will offer 80 lakh shares with face value of Tk 10 each,’ said Farhad.
   Paid up capital of Standard Insurance is Tk 6 crore and that of Maksons Spinning is Tk 34 crore, he said. As on December 31 in 2007, earning per share of Standard Insurance was Tk 19.52 and that of Maksons Spinning was Tk 10.69, informed the SEC official.

Basic Bank managing director AH Ekbal Hossain resigned from his post on Monday after the bank’s board asked him to quit the job blaming him for flaws in some loan deals and appointments.
   ‘The directors of the bank on Monday had a board meeting, which continued till midnight at the industries ministry, and they alleged that I had committed some irregularities. At one stage they asked me to resign and I gave in to their pressure,’ said Ekbal.
   The alleged irregularities include giving loans to a company named Rose Bud, appointing two deputy general managers on contract basis, rescheduling loans to Desktop Computer and going abroad without the permission of the chairman.
   The loans to Rose Bud were approved by the board and were documented, and the bank rescheduled the loans to Desktop after getting down payment, he said.
   The two DGMs were appointed after a recruiting committee recommended them, and he had always informed the chairman in written form that he was going abroad, he added.
   ‘He was asked to resign and the directors thought that it was the best option,’ one of the directors said.
   The industries secretary is the chairman of the bank and five out of the six directors were present at the board meeting, he said.
   In his tenure of four and half years, the bank grew by three or four times in terms of profit, advance, deposit and international trade, claimed Ekbal.
   ‘In my whole banking career I have worked with honesty and sincerity and I felt insulted when the directors questioned my integrity,’ he added.
   In his tenure, profit grew from Tk 60 crore four years back to Tk 132 crore in 2007, advance from Tk 800 crore to Tk 2,500 crore, deposit from Tk 1,100 crore to Tk 3,800 crore, export business from Tk 600 crore to Tk 2,200 crore, import business from Tk 800 crore to Tk 3,000 crore, and bad loans came down from 6 per cent to 3 per cent in 2007, claimed Ekbal.
   The alleged irregularities are minor and did not put the Basic Bank into any trouble, said a high official of the Bangladesh Bank.
   If his irregularities are considered big offences, then more than half of all the managing directors of the country would lose their jobs, he said.

Special assistant to the chief adviser M Tamim on Thursday said recent growth at the country’s share markets did not reflect on industrial growth of the period.
   ‘Huge sum of money is flowing to stock market in recent times, but we do not see flow of funds to industrial sector at that level,’ said M Tamim, while speaking as chief guest at the projection meeting on the Titas Gas Transmission and Distribution Company Ltd, organised by the Dhaka Stock Exchange in the Dhaka city.
   DSE held the meeting on Titas Gas prior to its debut on the bourses. Titas Gas will make its debut on bourses on July 2 under the direct listing regulations for offloading shares worth Tk 214.12 crore.
   The state-owned enterprise will offload 2,14,11,728 shares of Tk 100 each. The SoE will offload 25 per cent of its existing paid up capital amounted to Tk 856.47 crore.
   Tamim, however, hoped for significant contribution from the stock market to the industrial development of the country.
   ‘Recently, our capital market is vibrant and strong with achieving a growth in market capitalisation,’ he said adding that ‘Contribution of DSE market capitalisation rose to 17 per cent to the GDP in 2008, while it was 7 per cent in early 2007.’
   ‘We must remain alert against any uncontrolled growth of the market to safeguard the interest of the investors and capital market,’ Tamim said.
   He expected, Titas Gas would be more successful and transparent company after getting listed with the bourses.
   Faruq Ahmad Siddiqi, chairman of the Securities and Exchange Commission, and Mohammad Mohsin, power, energy and mineral resources secretary, also spoke on the occasion as special guests.
   SEC chairman said with the rising demand for shares, the bourses were suffering from mismatch between demand and supply in recent times. ‘Offloading of shares of Titas Gas would be very much helpful in diminishing the demand-supply gap and deepen the market.’
   Jalal Ahmed, chairman of Petrobangla, also spoke at the meeting, which was chaired by DSE president Abdul Haque. Salahuddin Ahmed Khan, chief executive officer of the DSE, gave vote of thanks.
   Abdul Haque said with the continuous supply of shares of profit making SoE and private sector companies, contribution of market capitalisation would be double in short period of time. He urged the government to utilise the capacity of the capital market in developing country’s infrastructure including power sector.
   Titas Gas, which is engaged in business of purchasing, transmitting and distributing gas, will be the fifth state-run company to be listed on the stock exchanges under the direct listing regulations.
   Earlier, Jamuna Oil Company and Meghna Petroleum offloaded 30 per cent shares each in January this year, and Dhaka Electric Supply Company and Power Grid Company Bangladesh sold off 25 per cent shares each in 2006.

The government is considering a proposal, of some non-resident Bangladeshis in Australia, for setting up a pharmaceutical research centre in the country.
   Sources in the Board of Investment, which is working on the proposal, told New Age the government high-ups responded positively to the proposal feeling the necessity of such a centre to support growth of the pharmaceutical companies as well as their export mission.
   According to the BoI officials, a group of NRB investors proposed raising funds from Australia for setting up of the multimillion dollar centre which required sophisticated equipment.
   The BoI officials told New Age that Dr. Zahir Khan, an NRB and a renowned pharmaceutical expert Australia in, forwarded the proposal to the BoI through the Bangladesh embassy in Canberra.
   The BoI is discussing the proposal with the representatives of pharmaceutical entrepreneurs, officials of the Export Promotion Bureau and other stakeholders.
   ‘We are considering the venture as potential for the growth of increasing number of drug exporters in Bangladesh,’ a senior official of the EPB said.
   As the proposal came from private sector and people having experiences in the developed counties, the official said, the venture is expected to gain success.
   The BoI was apprised that several hundred Bangladeshi pharmacists, microbiologists and other pharmaceutical professionals were working in the EU, US and Australian private and public organisations.
   ‘The venture can help the local companies in promoting drugs for both local and overseas markets,’ said one BoI official.
   Local exporters are preparing to capture the EU and US drug markets as Bangladesh, being advanced among other LDCs, has potential to utilise the easy market access with its cost-effective products.
   According to a WTO agreement, the LDCs do not have to implement any kind of intellectual property rights at least before 2016 for medicines and drugs.
   Around 30 Bangladeshi drugs producers have so far explored markets in more than 50 countries including Africa, Latin America and Asia.
   According to the EPB sources, export figure will surely reach $40 million with a growth of 50 per cent in the current fiscal.
   But, the industry insiders said the current amount is almost nothing compared to the industry’s capacity and potential in the global market.
   They claimed that with already increased production capacity for 20 billion pieces of tablets, only for export, local drug makers can immediately feed a market for $2 billion.

The biofuel policies pursued by the rich countries are pushing millions of people in the developing world into poverty, an Oxfam’ study says, according to the Hindustan Times Thursday.
   Oxfam, a group of non-governmental organisations, launched the report at a time when leaders of the industrialized countries are to discuss policies to mitigate the impact of climate change at a G-8 conference in Japan early July.
   Quoting World Bank estimates, the study says the price of food has increased by 83 per cent in the last three years, which is disastrous for the world’s poor people. ‘The lives of about 290 million people are immediately threatened because of the food crises,’ the study says.
   The study attributes 30 per cent of the rise in food prices to bio-fuels and says it has pushed 30 million people into poverty already.
   ‘Today’s bio-fuels are not solving the climate or fuel crises but are instead contributing to food insecurity and inflation, hitting poor people the hardest,’ said Rob Balley, the author of the report.
   Blaming the rich countries for the crises, the report says the subsidies for bio-fuels by the United States and Europe are taxing food for poor in the developing world.
   The report recommends that the richer countries should freeze implementation of future bio-fuel mandates and dismantle subsidies and tax exemptions to bio-fuels to save more people from falling into poverty and accelerate the global food crisis.

Consumer confidence in several Asia Pacific countries has sunk to levels similar to those seen during a regional financial crisis 10 years ago, a MasterCard survey said Thursday.
   The twice-yearly survey of 13 markets in the region found six are as pessimistic or even marginally more so than they were during the 1997-98 financial crisis that struck the region.
   MasterCard said those countries were South Korea, Malaysia, New Zealand Australia, the Philippines, and Thailand.
   The MasterCard Worldwide Index of Consumer Confidence, derived from a survey, measures consumer confidence on a scale from zero to 100, with 100 being most optimistic.
   It said Japan and Indonesia were above levels of 10 years ago but had low sentiments towards the next six months. Indonesia was at 36.7 on the scale and Japan at 29.90.
   Overall, the region’s consumers are only slightly optimistic about the coming six months, with a measure of 56.0 on the index. That compares with 69.3 during the last survey.
   ‘The decline in optimism can be attributed to the continuing global credit crunch and associated volatility in financial markets, rising inflation, mounting food and fuel prices, and slower economic growth in many of the markets surveyed,’ MasterCard said.
   With an index score of 87.3, Singapore proved the most optimistic, followed by Vietnam, Hong Kong, mainland China, and Taiwan, it said.
   Thailand’s score of 23.7 left its consumers the most pessimistic.
   The Index measures consumers’ outlook toward employment, the economy, regular income, stock market and quality of life.

Amir Humayun Mahmud Chowdhury has been reelected chairman of the Union Capital Limited.
   The UCL at a board meeting on Thursday reelected Mahmud Chowdhury as its chairman for the next term, said a press release.
   Mahmud Chowdhury is also the chairman of Popular Life Insurance Co Ltd, and director of the Peoples Insurance Co Ltd. He is an ex-president of the Chittagong Chamber of Commerce and Industry, and former director of the Federation of Bangladesh Chamber of Commerce and Industry.

People’s Leasing and Financial Services Limited declared 35 per cent stock dividend at its 12th annual general meeting held at Bashundhara Convention Centre in Dhaka city on Thursday.
   The company earned a total of Tk 179 million in net profit after tax in 2007, which was Tk 148 million in 2006.
   The total investment at the end of the year stood at Tk 3500 million, which was Tk 2800 million a year back while operational revenue went up to Tk 504 million from 358 milion in 2006.
   The meeting was presided over by Motiur Rahman, chairman of the company, and a large number of shareholders attended the meeting.

Inflation, fuelled by surging energy and commodity prices and interest rate hikes by the Reserve Bank, could pull down India’s economic growth from the projected eight per cent to 7.8 per cent this fiscal.
   ‘High oil prices, strong input costs and a depreciating Rupee continue to exacerbate inflationary and other pressures. High interest rates, along with a slowing global economy, will trim GDP growth to 7.8 per cent in 2008-09,’ Standard & Poor’s Asia-Pacific chief economist, Subir Gokarn, said in a statement in Mumbai Thursday.
   The inflation rate was expected to be around 8.5 to nine per cent during this fiscal.
   Rising inflation, a forecast slowdown in economic growth, and turmoil in the global financial markets have dampened investor confidence and led to foreign capital outflow.

Vietnamese consumer prices rose 26.8 per cent in June compared to the same month last year, driven mainly by sharply higher food prices, statistics from the communist government showed Thursday.
   Prices rose an estimated 2.1 per cent between May and June, a slowdown from the 3.9 per cent rise a month earlier, the General Statistics Office said in an early estimate.
   Vietnam, which experienced 8.5 per cent economic growth last year, has been hit by double-digit inflation since November — a spike that has caused public anger and triggered a series of labour disputes.
   Inflation for the first six months of the year has reached 18.4 per cent, the GSO said.
   Food and beverage costs in June rose by 45.6 per cent year-on-year, with the staple food rice and other grains up 74.3 per cent.
   Prices for housing and construction material rose 23.7 per cent, while clothing and footwear were up 9.9 per cent, the GSO said.
   Pharmaceuticals and health care costs increased by 8.1 per cent, and household goods and appliances rose by 8.4 per cent.
   Inflation — driven by record high global oil and food prices — has hit much of Asia this year.
   Vietnam’s communist government has made fighting inflation its top priority and has cut its 2008 economic growth target to 7 per cent.
   Authorities have also raised interest rates, while reducing public investment and introducing temporary price caps on some goods, in a bid to bring the galloping inflation under control.
   The GSO also said Vietnam’s trade deficit has more than tripled to an estimated 14.8 billion dollars for the first half of 2008.
   The Ministry of Planning and Investment earlier this month had estimated the trade deficit for the first half at 16.9 billion dollars, state media reported.
   The GSO said Vietnam’s January to June imports totalled 44.5 billion dollars, saying that was a 60.3 per cent rise compared with the same period in 2007.
   Exports — including leading products crude oil, textiles and footwear — rose 31.8 per cent to 29.7 billion dollars, the GSO said.

Singapore’s industrial sector in May performed worse than expected, raising concerns the economy may miss the government’s 4.0-6.0 per cent annual growth target, economists said Thursday.
   The Economic Development Board’s monthly report showed output from the industrial sector shrank an annual 12.8 per cent last month, pulled down by a hefty 55.1 per cent drop in biomedical output.
   Analysts had projected a fall of 2.5 per cent for May.
   On a seasonally adjusted basis, industrial output in Southeast Asia’s most advanced economy last month fell 5.7 per cent from April, the EDB said.
   ‘Production in May dropped 12.8 per cent compared to the same month last year, largely due to a contraction in the biomedical manufacturing cluster,’ said the EDB.
   The sharp plunge in biomedical output was due mainly to the pharmaceuticals segment which shrank 58.2 per cent because a different batch of ingredients was produced, it said.
   Precision engineering also declined last month with output down 4.8 per cent on the year but other sectors fared better. EDB reported increased output in electronics, chemicals and transport engineering.

The Bangladesh Label Manufacturers and Exporters Association held its 6th annual general meeting held in the Dhaka city on Tuesday.
   Shibbir Mahmud, acting president of the BLMEA, presided over the meeting, said a press release. A good number of members of the association were also present in the meeting.
   The meeting reviewed the overall performance and position of the labe1 industries sector of the country. In the meeting, the names of the seven members elected to the executive committee for the 2008-2010 term were also announced.
   Mohammed Hossain Sattar was elected president, Shahidul Haq Sikder first vice-president, Abul Kalam Azad vice-president (finance), Ahsan Shahed Khan, Mohd Shaukat Hossain, Md Moniruzzarnan Khan, Mizanur Rahman Azad members of the executive committee.

Britain’s negotiator on climate change warned Thursday that the upcoming summit of the Group of Eight rich nations was unlikely to reach a consensus on how to tackle global warming.
   ‘We should be careful not to expect too much of the conversations next week,’ John Ashton told reporters in Tokyo ahead of the July 7-9 summit in the northern resort of Toyako.
   ‘We are not going to have a major breakthrough in the global effort on climate change because the conditions at the moment are not conducive,’ Ashton said. ‘We are still in the process of building the political consensus that we need.’
   Ashton was coming back from Seoul, where a US-led meeting last weekend of 16 major economies, including the G8 countries and developing nations such as China and India, failed to agree on concrete climate goals.
   Japan had proposed that the Seoul meeting set a long-term goal of halving greenhouse gas emissions by 2050, language similar to what was agreed at the last year’s G8 summit in Germany.
   Japanese prime minister Yasuo Fukuda has voiced hope for progress on climate change at the G8 summit as a UN-backed deadline looms to come up with a new treaty by the end of next year.
   But Fukuda has conceded that the G8 will not set targets on cutting emissions for the mid-term period after Kyoto’s obligations run out in 2012.
   The United States, the only major industrial nation to reject Kyoto, has argued that the G8 is not the right forum to discuss mid-term targets as it does not include developing countries.
   Ashton urged the world’s rich nations to send ‘strong signals’ to take the lead, which would send a ‘follow me’ message to developing countries.
   ‘Nobody moves till everybody moves, and the result is that nobody moves and you get a gridlock,’ he said, referring to past trade negotiations. ‘We cannot do that in relation to climate change.’
   ‘If you want China and India to do it quickly, then you have to have the confidence to continue leading the way,’ he said.

The Federal Reserve’s steady hold on interest rates Wednesday signaled it is prepared to ride out the current economic storm with a close eye on inflation, analysts said.
   The 9-1 decision by the Federal Open Market Committee to hold the base rate at 2.0 per cent reinforced expectations the central bank is leaning slightly toward a hike in rates but is not yet ready to make such a move.
   The action marked the first pause by the US central bank since it began a series of aggressive rate cuts last September in the federal funds rate.
   The panel echoed earlier comments from Fed chairman Ben Bernanke that the world’s biggest economy remains weak but that the risk of a calamitous meltdown had eased while inflation risks were higher.
   Brian Bethune, economist at Global Insight, praised the Fed for refraining from acting on rates before it has better data.
   ‘The Fed has a difficult period of decision making ahead of it, as the inflation risk issue clearly points in the direction of higher rates, but the growth outlook for the end of 2008 and 2009 now has ‘recession’ printed on it,’ Bethune said.
   ‘The Fed needs to keep it cool and avoid being stampeded in one direction or another on the path for future rates. Ideally the Fed would prefer to keep rates steady through this tumultuous period, but it is not clear that the major players and forces in this high stakes game will cooperate on this front.’
   Aneta Markowska, economist at Societe Generale in New York, said the Fed did well to temper expectations for rate hikes without sounding too easy on inflation.
   ‘The statement does a good job balancing these objectives and we believe that it should at least buy the Fed some more time,’ she said.
   ‘With rising unemployment, lingering credit concerns, ongoing housing contraction and consumers being squeezed by energy, the environment is just not ripe enough for a rate hike cycle. We look for a status-quo on rates through 2008. Policy normalization can occur in 2009 when the economy and the financial system are on a more solid ground.’
   Most analysts said the Fed appears to be on hold until it gets a clearer picture of the economy, which has been struggling with near-recession conditions as surging oil prices have ignited inflation.
   The central bank has slashed rates since last September by 3.25 percentage points, but officials are signaling that cycle of cuts is probably over, and that inflation is now the biggest threat.
   ‘Although downside risks to growth remain, they appear to have diminished somewhat, and the upside risks to inflation and inflation expectations have increased,’ the FOMC said after a 9-1 vote with Dallas Fed president Richard Fisher dissenting, calling instead for an increase in the funds rate.
   Paul Ferley, economist at RBC Capital Markets, said the new statement includes ‘a little more emphasis on the inflation risks versus growth risks.’
   ‘It implies slightly greater bias toward tightening, but I think the Fed will remain in a watching mode,’ Ferley said.
   Ferley said the most likely scenario ‘is that fed funds will hold steady through the remainder of this year’ with no major change in economic conditions.

As France’s summer sales kicked off and millions prepared for long holidays, official data showed Thurday that French consumers are the gloomiest about their living standards for 21 years.
   The index calculated by the national statistics institute INSEE showed the 12th monthly fall in a row, a steady decline almost since the election of a reforming centre-right government headed by Nicolas Sarkozy which is committed to raising buying power.
   The index fell to minus 46 in June from minus 42 in May, a figure revised upwards, and now stands at the lowest point since it was established in its current form in 1987. As the summer holiday season gets under way, a central factor in family life in France, all but one of the main facets of life measured by the index showed pessimism.
   Wednesday also marked the beginning of France’s official summer sales period when shops are allowed to mark down items, usually triggering frenetic buying across the country.
   Of the areas of life covered by the INSEE survey, there was a decline in confidence on the outlook for living standards, assessment of recent trends in living standards and on current and future personal finances.
   Confidence also fell for making big purchases, on the possibility of saving, and on prices and expectations of inflation.
   In the last two years a long-standing and seemingly intractable problem in France, unemployment, has fallen markedly, and in June the opinion of households on this count was about steady.
   The biggest fall in confidence concerned the outlook for living standards, which slumped by seven points to minus 57.

The HeidelbergCement Bangladesh Ltd approved 25 per cent cash dividend for its shareholders for the year 2007at the company’s 19th annual general meeting held in the Dhaka city on Wednesday.
   Jean-Claude Jamar, managing director of HeidelbergCement, presided over the meeting, said a press release. The company’s directors Abdul Awal Mintoo, Md Ziaul Haque Khondker, AKM Jahangir Khan, Golam Farook, Jashim Uddin Chowdhury, among others, were present in the meeting.

The Union Capital Limited approved 30 per cent stock divided (three bonus shares for every 10 ordinary shares) for its shareholders for the year 2007 at the company’s 10th annual general meeting held in the Dhaka city on Wednesday.
   Amir Humayun Mahmud Chowdhury, chairman of the company, presided over the meeting, said a press release.
   Directors and shareholders of the company attended the AGM.

Unicredit, Italy’s biggest bank by capitalisation, said on Thursday it planned to cut 9,000 jobs in western Europe and invest in central and eastern Europe to boost profits.
   Staffing in western European markets, mainly Italy, Austria and Germany, is to be reduced ‘which will impact some 9,000 of the 100,000 jobs’ in the region, the company said in a statement presenting its strategic plan for 2008-10.
   ‘In central and eastern Europe, the group will expand its network significantly, while in western Europe the focus will be on optimisation, efficiency, restructuring and cost control,’ the bank added. Unicredit said it planned to open 1,300 branches in eastern Europe where 11,500 jobs will be created.
   The move reflects the attraction of the emerging eastern European economies where incomes are rising fast and consumers are demanding an increasing range of financial products.
   ‘For the foreseeable future the CEE-region (central and eastern Europe) will continue to grow much faster than western Europe,’ the bank said. Unicredit, which bought Italian peer Capitalia last year to become what was then the biggest bank in the eurozone and the second-biggest in Europe, says it has the biggest international network in eastern Europe with 3,600 branches.
   As a result of its exansion in eastern and central Europe, it said revenues from the region would grow at an annual rate of 19 per cent. Group revenues were forecast to increase by 6.7 per cent between 2008 and 2010.

The Maldives, one of the world’s most exotic holiday destinations, plans to lease 19 uninhabited coral islands to be developed as upmarket resorts, officials said Thursday.
   The new resorts will add to the 44 islands that are either to be leased out this year or at various stages of development, tourism minister Mahamoud Shougee told AFP by telephone from the capital of Male.
   ‘Once the new investors are identified, they have four years to build the resort,’ Shougee said.
   The Maldives is famed for its exclusive tourists, where guests pay thousands of dollars a night to dive and sleep in wooden cabins built over turquoise waters.
   In 2006, president Maumoon Abdul Gayoom’s government leased 35 islands to foreign and local investors for resort development. Only two of those are currently in operation.

German import prices posted their biggest annual jump in almost eight years in May as the cost of energy continued its ascent, official figures released Thursday showed.
   Imported products cost 7.9 per cent more last month on an annual basis, and 2.4 per cent more than in April, the Destatis statistics office said.
   ‘This was the highest year-on-year rate of price increase since November 2000,’ when it reached 10.6 per cent, Destatis added.
   The monthly rise was the biggest since September 1990, it added.
   Unsurprisingly, energy prices posted the biggest gains, leaping by 46.5 per cent on the year overall, while the price of ferrous metals such as steel jumped by 39.1 per cent.
   Crude oil prices jumped by 56.8 per cent and natural gas cost 36.2 per cent more in May.

Indonesia is concerned about Malaysia’s plan to carry out a mass deportation of illegal immigrants from Borneo Island, a senior official said Thursday.
   Malaysian deputy prime minister Najib Razak on Wednesday announced a plan to clear out illegal immigrants, mainly from Indonesia and the Philippines, who have settled in Sabah state on Borneo.
   ‘It is a concern when you deport hundreds of thousands of Indonesians back home,’ said Eka Suripto, a counsellor with the Indonesian embassy in Kuala Lumpur.
   Politicians in Sabah have pushed the national government to expel the illegals, saying they were a burden on the economy and pose a security threat by engaging in crime and the drugs trade.
   ‘If you deport thousands of illegals, the local industries will not have workers. The demand for workers will only fuel the return of the illegals,’ Eka said.
   Authorities say there are 130,000 illegal migrants in Sabah, but local politicians put the figure as high as 500,000. Many of them work in the timber and plantations industries.
   The issue of illegal migrants is a perennial irritant between Malaysia and Indonesia.
   In 2005, Malaysia embarked on another major offensive to expel illegals, mainly from Indonesia, in which at least 300,000 people were deported.
   Malaysian foreign minister Rais Yatim and his visiting Indonesian counterpart Hassan Wirayuda met Thursday and discussed a number of bilateral issues, including labour.

Taiwan on Thursday announced that it will relax restrictions on financial investments in China and Hong Kong by local firms amid improving ties between the rivals.
   The government will scrap a rule that requires local brokerages to own at least a 25 per cent stake in the mainland companies they invest in, said Susan Chang, deputy chairwoman at the Financial Supervisory Commission, the island’s top financial regulator.
   In addition, securities firms will be allowed to invest an equivalent of up to 20 per cent of their net worth in China, doubling the current ceiling of 10 per cent, Chang told reporters after a weekly cabinet meeting.
   Under the new rules, Taiwan will open the domestic market to listings of Hong Kong exchange-traded funds, and also plans to allow Taiwanese ETFs to list in Hong Kong, she added.

The euro rose against the dollar and struck a record high versus the yen on Thursday amid expectations of higher interest rates in the eurozone while other central banks remain on hold, dealers said.
   The European single currency gained to 1.5674 dollars in morning London trade from 1.5667 dollars in New York late on Wednesday.
   Against the Japanese currency, the dollar climbed to 107.90 yen from 107.82.
   The euro was at 169.08 yen after reaching a historic high of 169.45 earlier Thursday on speculation that interest rates will rise in the eurozone, widening the yield gap with Japan, dealers said.
   Meanwhile the US Federal Reserve decided to leave its key base interest rate unchanged at 2.0 per cent as widely anticipated on Wednesday.
   Analysts said the central bank’s accompanying statement stopped short of flagging a rate hike in the near future, but appeared to leave open the possibility of action to curb inflation later in the year.
   ‘The statement implies no commitment to a rate hike at the Fed’s August meeting, but it does not rule it out either, and such a move is possible if data on growth and inflation firm notably before that meeting,’ Barclays Capital analyst David Woo said on Thursday.
   Economists say the US central bank is in a tight corner as it weighs up concerns about slowing economic growth and growing inflationary pressures.
   ‘It didn’t sound like the Fed was planning to pull the trigger on rate hikes in coming months,’ NAB Capital analyst John Kyriakopoulos said in reaction to the US central bank statement.
   ‘The Fed will only hike if the economy recovers and this is unlikely over the next few quarters.’
   The Federal Reserve’s decision marked the first pause in a series of aggressive rate cuts since last September to spur growth. Lower US rates have weighed heavily on the dollar against other major currencies.
   Elsewhere on Thursday, the pound was up against the dollar and euro as Bank of England governor Mervyn King repeated his forecast that British inflation would rise above 4.0 percent this year amid surging energy prices.
   Soaring inflation may force the BoE’s monetary policy committee to increase British interest rates from their current 5.0 per cent level, analysts said.
   ‘The MPC’s current judgement is that inflation is likely to rise to above 4.0 per cent before the end of the year, although this projection is very sensitive to the path of domestic gas and electricity prices,’ King told British lawmakers.
   In morning London trading on Thursday, the euro changed hands at 1.5674 dollars against 1.5667 late on Wednesday, at 169.08 yen (168.97), 0.7922 pounds (0.7933) and 1.6209 Swiss francs (1.6220).
   The dollar stood at 107.90 yen (107.82) and 1.0342 Swiss francs (1.0350).
   The pound was at 1.9789 dollars (1.9748).
   On the London Bullion Market, the price of gold advanced to 891.26 dollars per ounce from 882.75 dollars late on Wednesday.

Oil prices rose on Thursday, supported by risks to unrest in producer nations and a weak dollar, after sliding a day earlier on easing concerns about US energy supplies, analysts said.
   The president of OPEC, Algerian Energy minister Chakib Khelil, predicted Thursday that oil prices could rise to 150-170 dollars a barrel during the northern hemisphere summer.
   Last week crude futures hit record highs of close to 140 dollars.
   New York’s main oil futures contract, light sweet crude for August delivery, was up 44 cents at 134.99 dollars per barrel in electronic deals following the forecast made by Khelil to the television news channel France 24.
   Brent North Sea crude for August climbed 47 cents to 134.80 dollars.
   ‘Concerns over potential geopolitical conflicts continue to support crude markets,’ Sucden analyst Nimit Khamar said on Thursday.
   Crude futures had closed down 3.50 dollars on Wednesday after official data revealed an unexpected rise in crude stockpiles in the United States, the world’s biggest energy consumer, traders said.
   The US Department of Energy said that stockpiles of crude had risen for the first time in six weeks, by 800,000 barrels, in the week to June 20. Analysts had expected a drop of 1.1 million barrels.
   ‘The report also showed four week average gasoline demand is 2.1 per cent down from a year ago, this goes to show more and more people are reacting to high oil prices,’ said Khamar from the Sucden broker firm in London.
   Meanwhile in his interview with France 24, Khelil said: ‘I predict probably prices of 150 to 170 dollars this summer. It the market will probably fall a bit towards the end of the year.’
   The OPEC president added that a weak dollar was the main cause of surging oil prices. A struggling US currency makes goods priced in the dollar cheaper for foreign buyers, thus pushing up demand.

India to sell helicopters to Ecuador
India on Thursday made aviation history by concluding a USD 51 million deal with the South American Republic of Ecuador for the sale of seven ‘Dhruv’ Advanced Light Helicopters. The deal signed between Ecuador Aviation Authority and bluechip state-owned Hindustan Aeronautics Limited envisages the supply of seven helicopters in semi knock-down conditions to the Republic in a time-frame of 15 months to two years, defence ministry officials said. With this, India has joined a select group of nations with a capability to bid for international contracts for choppers. So far, the helicopter market has been dominated by US, European companies and Russia. The ALH ‘Dhruv’ has been making waves in international air shows world over from the past two years but international sales of the helicopter have eluded HAL. HAL came very near bagging its first international order when it bid for the Chilean armed forces contract two years ago, but was beaten to the closing line by the US competitors.
— PTI

China to replace Japan as Asia-Pacific’s largest online shopping market
China will replace Japan as the largest online shopping market in the Asia-Pacific region in 2010,with 480 million online shoppers spending 1.4 trillion US dollars, a MasterCard survey said on Thursday. The survey, which analyzes consumer behavior in relation to e-commerce across the region, found that online shopping growth in the region is expected to increase at an annual rate of 23.3 per cent by 2011 and this growth is likely to shift from consumers in Japan to new consumer populations in China and India. ‘The rising population of upper-middle-income urban elites is likely to boost the online shopping markets in China and India significantly. Domestic consumption spending in the two countries is poised to pick up strongly, underpinned by a rapid pace of urbanization, robust economic expansion and rising spending power of urban elites,’ said MasterCard.
— Xinhua