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Bangladesh Tariff Commission will examine the production cost and selling price of metal frame spectacles in China as local producers alleged that the communist country was dumping the item in market at cheaper price, official sources said.
   ‘The BTC has taken up the matter for scrutiny as local producers of metal frame spectacles complain that Chinese traders are dumping their products in large scale to Bangladesh,’ an officials of the BTC told New Age on Monday.
   They said there would be a public hearing at BTC office on alleged dumping of the Chinese metal frame spectacles on October 14. The importers of Chinese spectacles and raw materials, and local producers would attend the hearing.
   Dumping is defined as the act of a manufacturer in one country exporting a product to another country at a price which is either below the price it charges in its home market or is below its costs of production.
   Importing country can file a dumping allegation against the exporting countries under the Anti-dumping agreement of WTO, said BTC officials.
   They said BTC in last week sent a letter to Bangladesh ambassador in Beijing to know the production price of metal frame spectacles manufactured in China as well as the market price of the product in China. Besides, BTC also wanted to know the number of metal frame spectacles industries in China.
   The officials also said the importer countries can lodge anti-dumping case with WTO under the Anti-dumping agreement, which will be a lengthy process.
   They already received three years production cost and selling data of the local spectacles industries that showed that home producers were hitting hard by large import of Chinese spectacles at cheaper price.
   Traders imports Chinese spectacles on 25 per cent duties. Low quality Chinese metal frame spectacles cost 30 to 50 cent while a high quality spectacles cost around $10. But locally produced spectacles cost double compared to Chinese products.
   Manjurul Hoque Sikder, former president of Bangladesh Chasma Shilpa o Banik Samity, complained, low quality spectacles were being imported from china during last 10 years and local market were flooded with the Chinese products.
   He further complained, the customs officials were not keeping close watch on imported spectacles and their quality.
   Chairman of Bangladesh Tariff Commission Syed Naquib Muslim told New Age the local spectacles producers were producing quality spectacles in the subcontinent. The imported Chinese cheap spectacles were really posing threat to local products, he said.
   He further said the local manufacturers are not interested to file dumping allegation against the exporters as they have to maintain production and imported raw materials cost data.
   At present, 45 factories produce spectacle lens and meet 60 per cent of the domestic demand while three local manufacturers produce spectacle frames to meet 50 per cent of the local requirement.
   In 2005-06 fiscal year, local manufacturers exported frames worth $1 lakh to South Korea and Saudi Arabia.

In a further bid to detect tax evasion, the National Board of Revenue is likely to start a drive against the highly paid officials in different private organisations.
   NBR chairman Muhammad Abdul Mazid on Monday said the NBR is inquiring about different organisations, associations and service holders to expand the tax net.
   ‘Besides, I will request the factory owners to cut the income tax at source. To avoid tax evasion, we will ask them to submit salary sheets of any suspect organisation,’ he said.
   The observation of the NBR chief came during a view exchange meeting with the factory owners of different sectors.
   The NBR chairman also hinted that his organisation would find out how many of the members of an association have Tax Identification Numbers. He said that the Central Intelligence Cell of the NBR is working in its own way to detect tax evasions in addition to the ongoing self-motivated taxpayers’ campaign. ‘We are also trying to detect the foreign employees in different organisations.’
   Bangladesh Textile Mills Association president Abdul Hai Sarkar, Bangladesh Knitwear Manufacturers and Exporters Association president Fazlul Huq and Cable Operators Association of Bangladesh president SM Anwar Parvez, among others, spoke at the meeting.

The High Court has stayed for three months the operation of Bangladesh Bank’s orders that halted the functioning of AB Bank Foundation and ordered forfeiture of the shares of IFIC Bank Ltd in the name of the foundation.
   ‘The AB Bank on Monday informed us that after hearing a writ petition the High Court also issued a rule asking the central bank to explain why the orders would not be declared illegal,’ said Salahuddin Ahmed Khan, chief executive officer of the Dhaka Stock Exchange.
   On July 13 the Bangladesh Bank ordered the forfeiture of the remaining 6.12 per cent shares of IFIC Bank, valued over Tk 100 crore, held by the AB Bank Foundation, a subsidiary company of AB Bank.
   The central bank also instructed the AB Bank Foundation to wind up its activities within three months.
   In 2007, the central bank discovered that AB Bank and AB Bank Foundation held about 18.31 per cent shares of IFIC Bank, though the laws permit any individual or a company to hold no more than 10 per cent of the shares of a bank.
   The AB Bank sold 9.93 per cent of the shares held by it and the AB Bank Foundation sold 2.27 per cent early this year to bring down their stakes in IFIC Bank to a permissible limit. However, the central bank ordered the forfeiture of the remaining shares also.
   The AB Bank Foundation, a member of the Dhaka Stock Exchange, started operating from September 2006 as a brokerage firm.
   The stocks in Dhaka on Monday rallied for the second day of the week, led by insurance and non-bank financial institution stocks, said market operators.
   The DSE general index gained 12.37 points or 0.44 per cent to close at 2836.40, while its blue chips index, DSE20, advanced by 15.54 points or 0.65 per cent to finish at 2422.93.
   Of the total 220 issues traded at the DSE, 119 advanced, 91 declined and 10 remained unchanged.
   Turnover at the DSE also increased to Tk 338.31 crore from Sunday’s Tk 304.63 crore.
   The Titas Gas Transmission and Distribution Company topped the turnover leaders with a total transaction of Tk 28.17 crore.
   The ICB 2nd NRB Mutual Fund, ACI, Grameen Two Mututal Fund, Beximco, LankaBangla Finance, Prime Finance, Union Capital, Beximco Pharmaceuticals and S Alam Cold Rolled Steels were the rest of the top 10 turnover leaders.
   The Chittagong Stock Exchange’s selective categories index gained 24.52 points or 0.43 per cent to close at 5682.14, while its blue chips index, CSE30, advanced by 69.30 points or 0.90 per cent to finish at 7755.56.
   Of the total 142 issues traded at the CSE, 76 posted gains, 57 dropped and nine remained unchanged.
   Turnover at the CSE went up to Tk 48.10 crore from Sunday’s Tk 37.80 crore.

Bangladesh Telecommunication Regulatory Commission Monday announced the guidelines for infrastructure sharing aiming at maximizing the use of network facilities.
   The Infrastructure Sharing means the joint use of telecommunication infrastructures and facilities by two or more operators. It will not be limited to network capacity and capabilities, base station sites, backbone, towers etc to enhance sharing and reduce duplication of investment for network facilities, said BRTC officials.
   They said the guidelines would promote the availability of wide range of high quality, efficient, cost effective and competitive telecommunication services throughout the country by ensuring optimum utilisation of telecommunication resources.
   It would also protect the environment by reducing the land use as well as infrastructure and facilities installations, optimise operator’s capital expenditure on supporting infrastructure and enhance competition among telecommunications operators in more cooperative environments.
   The guideline is formulated to encourage telecommunication service providers to remove uncertainty and create framework for better cooperation in infrastructure sharing.
   Infrastructure sharing includes requirement to lease out or rent out or swapping infrastructure on a nondiscriminatory basis to other service providers.
   The guidelines are however subject to relevant laws, rules and regulations and in conjunction with the respective operator’s license conditions.
   Under the guidelines, the operators shall provide capacity on its infrastructure to other operators on a non-discriminatory ‘first come, first serve’ basis.
   Operators shall enter into agreement for sharing infrastructure. Tariff and charges for Infrastructure Sharing shall be mutually agreed basing on the directives issued or to be issued by the Commission. In case of any dispute regarding the tariff and charges the decision of the Commission shall be final and binding upon the parties.
   Any agreement to be executed shall be submitted to the Commission within 15 days from the date of agreement.
   All operators shall publish in their websites detailed information of infrastructures available for sharing with other operators. The list shall be updated on monthly basis. The operators may issue password to the Commission, licensed operators, and any other entities as permitted/nominated by the Commission to access the information from the website.

Space congestion at the car sheds of Chittagong Port created problem, forcing a foreign ship loaded with imported vehicles to keep floating at the outer anchorage for days together, port officials said.
   The ship ‘Morning Bridge’ with Panama flag loaded with 1400 vehicles was not allowed to take berth at the port jetty for the past three days as the car sheds were packed up vehicles, they added.
   The space crisis was a fallout of complicacy over customs duty assessment for which the importers were not taking delivery of the vehicles for the past one month, said the member (operation) of Chittagong Port Authority Yahiya Sayeed.
   ‘As we don’t have space, we can not allow berthing of the loaded ship for unloading at the port. The car sheds were already packed up with over 4,000 vehicles against the capacity of 2,800 cars,’ he added.
   ‘As soon as the importers start taking delivery of their vehicles from the sheds, we will allow the ship to enter the jetty for unloading the cars. We don’t have other options at this moment,’ he said.
   The port authority announced to impose four times higher duty on those vehicles dumped at the port’s car sheds with effect from September 15  in a bid to force the importers to take delivery of their imported cars, officials informed.

Bangladesh Livestock Research Institute undertook a five-year project titled Poultry Technology Development and Dissemination with special emphasis on bio-security to protect the poultry sector from the deadly attack of bird flu virus.
   The cost of the project was estimated at Tk 33 crore, of which Tk 8.5 crore would be provided by Bangladesh government and the rest amount would come from Japan government.
   The project started in July and So far, 1170 small farmers in 12 districts provided training on the poultry production technology that prevent high pathogenic avian influenza through strict implementation of bio-security measures, said principal scientific officer of Poultry Production and Research Division of BLRI Md Nazrul Islam.
   The main objective of the project is to train poultry farmers on effective and hygienic poultry rearing technology as well as boosting the capacity of BLRI officials to handle the virus attacking situation, he said.
   Apart from the technology dissemination, the project will strengthen investigation countrywide to control the spread of avian influenza, he noted.
   With the training on poultry rearing technology, the farmers will be able to improve their product quality, he hoped.
   The main activities of the project will be reviewing the present poultry rearing package and find out problems, improve feed and hygienic rearing management technology, evaluate feed materials and develop low-cost feed, propose ways to reduce management risk like cost of inputs, disease management, improve diagnosis capacity of BLRI laboratory and support regional laboratories to improve farmers’ capacity on disease management.
   The project covers 12 agro-ecological sites in Dhaka, Chittagong, Noakhali, Sylhet, Tangail, Barisal, Khulna, Tangail, Chapainawabganj, Bogra, Jaipurhat and Dinajpur.

A views exchange meeting on problems at Sonamasjid Land Port was held at the office of Panama-Sonamasjid Port Link Limited at the land port in Chapainawabganj district on Monday.
   A committee comprising personnel of joint forces, police, RAB, BDR and civil administration exchanged views with the customs officials, clearing and forwarding agents, and leaders of labour union, on identifying problems in gearing up the port operation activities.
   The meeting was held with commanding officer of the 6th Cavalry at Bagra area of Bangladesh army Lt Col Sharif Ahsan in the chair. The meeting discussed various problems including, insufficient infrastructure, inadequate Customs manpower, and lacks in residential and banking facilities at the port.

The Best Air, a private aviation company, on Monday launched its flight to Dubai of the United Arab Emirates.
   Syed Fahim Munaim, press secretary to chief adviser, inaugurated the flight at a ceremony held at the Zia International Airport in Dhaka, said a press release.
   Civil aviation and tourism secretary Syed Mohammad Zubair also present on the occasion. M Haider Uzzaman, chairman of Best Air, also attended.
   Diplomats and government officials were also present in the launching ceremony.

Foreign ownership in South Korea’s top 10 conglomerates dropped 27 per cent by the end of last month compared to last December, posting 103.4 trillion won ($102.1b), Korea Times reported Monday.
   GS, an energy and retail giant, saw its foreign shareholdings drop the greatest among the top 10 businesses invested by the foreign investors. As of the end of August foreign ownership in GS declined by 6.25 per centage points to 28.24 per cent, according to the Korea Times.
   Foreign shareholdings of Samsung, the No. 1 conglomerate, accounted for 38.64 per cent, falling 2.16 percentage points, the newspaper said.
   However, Samsung still remains as the biggest foreign ownership.
   Of the top 10 businesses, only foreign ownership in Hanjin, a logistics giant, increased from the end of last year.
   Foreign shareholdings of Hanjin gained 0.06 per centage points to 19.34 per cent, Korea Times said.
   Overall, foreign ownership in top 10 businesses accounted for 31 per cent of the market capitalization, compared with 33 per cent in last year, according to Korea Times.

China said it will submit Coca-Cola’s proposed takeover of juice producer Huiyuan to an anti-monopoly review, amid reports that rival Chinese companies would seek to block the deal.
   The US soft drink giant’s application for the bid will be reviewed under the anti-monopoly law once the commerce ministry receives it, spokesman Yao Shenhong was quoted as saying by state-run China Central Television at the weekend.
   Yao said a review was necessary because of the large sum of money involved, according to the television station. Coca-Cola announced last week plans to buy Hong Kong-listed Huiyuan Juice Group for 2.4 billion dollars, the US soft drink maker’s largest acquisition in China.
   Analysts have said the takeover, if approved, would be the largest by a foreign firm of a Chinese company, but added the deal had to be reviewed under an anti-monopoly law that took effect last month.
   The review is required as the combined global turnover of the two firms was more than 10 billion yuan ($1.5b) in 2007, and as they each made more than 400 million yuan in China. The two companies would control 37 per cent of China’s juice drink market, according to a Merrill Lynch report.
   It is unclear how long it will take for the government to approve the purchase, as few details about how the anti-monopoly law should be applied in practice have been clarified.
   The process could become even more complicated amid rising nationalist opposition to the deal, with some Chinese juice companies reportedly planning to send a letter to the commerce ministry to block the bid.
   They argued the acquisition threatened to force them out of business because Coca-Cola would control a large share of the product distribution network after the takeover, Monday’s Beijing Morning Post said.
   When contacted by AFP, soft drink maker Wahaha Group Co Ltd. and mineral water manufacturer Nongfu Spring Co Ltd. both declined comment on whether they would put their names on the letter. Lolo Group Co Ltd., a well-known producer of almond juice, said it had not signed on to a letter addressed to the commerce ministry.
   Coca-Cola was not immediately available to comment when contacted by AFP on Monday.
   Nationalist sentiment against foreign companies acquiring Chinese firms has grown here in recent years, according to Arthur Kroeber, managing director of the Beijing-based economics research firm Dragonomics.
   ‘What we know is that there are a significant number of people in Chinese government and industry and in the public who would like to see less of presence of foreign companies in China,’ he told AFP.
   ‘And we have no idea what the weight of that concern will be in government decision making.’
   Chinese regulators have been reluctant to approve some recent foreign acquisitions. Officials in the past have used delaying tactics to stop deals without formally rejecting them.
   In July, US private equity firm Carlyle Group abandoned an attempt to buy a stake in Chinese construction machinery maker Xugong Group after waiting three years for regulatory approval.
   The jury is still out about the impact on foreign businesses of nationalist sentiment, Kroeber argued, pointing out that some Chinese actually want more foreign involvement.

Abu Sadek Md Sohel has recently been made additional managing director of the Social Investment Bank Ltd.
   Prior to the new assignment, he was the deputy managing director of the bank.
   He began his banking career in 1977 as senior officer in Sonali Bank. Abu Sadek Md Sohel also served Agrani Bank and Bangladesh Krishi Bank.
   He attended overseas seminars in Hongkong, Bangkok, Frankfurt, Sanghai, Paris and Kathmundu. He also attended training course on credit analysis at New York in USA.

David McCaughan, executive vice-president and regional strategic planning director of Asia Pacific McCann-Worldgroup, on Monday arrived in Dhaka on a two-day visit.
   He will present a paper at a seminar ‘Don’t Call Them Consumers, Call Them People’ today, said a press release.
   The Unitrend Ltd organises the seminar at the Hotel Sarina in Dhaka city.

Taiwan said Monday it posted a trade deficit in August on high crude oil prices and increased steel product imports.
   The August trade deficit was 29.9 million US dollars, compared with a deficit of 412.0 million dollars the previous month, the finance ministry said.
   Last month, the island’s exports rose 18.4 per cent from a year earlier to 25.25 billion dollars on strong demand from China, the US and Europe, the ministry said.
   Exports to China and Hong Kong totaled 10.04 billion dollars, up 13.9 per cent from a year earlier, while exports to the US rose 11.7 per cent to 2.96 billion dollars.
   The ministry said exports of electronics products grew 9.3 per cent from a year earlier to 6.37 billion dollars, while base metal product exports rose 21.3 per cent to 2.72 billion dollars.

Central banks must be alert for risks from the global credit crisis and the US government rescue plan for ailing US mortgage giants Fannie Mae and Freddie Mac is welcome in this regard, the Group of 10 said on Monday.
   At the same time, they also need to be on watch against the threat of rising inflation, European Central Bank head Jean-Claude Trichet said as the spokesman for the G10 nations meeting at the Bank for International Settlements.
   ‘We still see the financial crisis continuing and still consider that we all have to be alert. The risks are still there and alertness is essential,’ Trichet said.
   World financial markets have been in turmoil since the collapse of the US subprime or higher-risk mortgage sector last year.
   In the fallout, the credit essential for business has virtually dried up as the banks have been hit by billions of dollars in losses on their subprime exposure.
   Over the weekend, the US government took control of Fannie Mae and Freddie Mac, who together back nearly half of all US mortgage finance, saying the risk of their failure for the economy was too great to be safely ignored. Trichet said the move was welcome.
   ‘We took note of the decision to rescue Fannie Mae and Freddie Mac; it was a very important decision and ... a welcome decision taken on account of the circumstances,’ he said.
   Trichet also warned that inflation was at a ‘very high’ level and called for unions to be restrained in wage demands so as to limit any follow-through, secondary price pressures from stoking higher costs.
   ‘We all agree that a solid anchoring of inflation expectation is of the essence in the present, we have to avoid that social partners engage in any kind of spiralling of salary and price demands,’ he said.
   Overall, Trichet said world economic growth remained ‘positive and significant’ although some slowing down has been observed.
   The Group of 10 comprises Belgium, Canada, France, Germany, Italy, Japan, the Netherlands, Sweden, the United Kingdom and the United States.

The National Bank Ltd recently signed a deal on up-gradation of card software with Sungard System Access Malaysia SDN BHD.
   Md Abdur Rahman Sarker, managing director of National Bank, and Wan Mai Gan, vice-president of Sungard System Access Malaysia, signed the agreement at a ceremony held at the bank’s head office in Dhaka city, said a press release.
   With the up-gradation the bank will be able to provide latest technological services to its card holders.
   Officials of both the organisations were also present on the occasion.

Aerospace groups dusted off contingency plans on Monday for a potentially lengthy strike at Boeing, whose workers halted production for a third day, while shares in the parent of European rival Airbus got a sharp boost.
   Boeing Co’s assembly lines in the Seattle area fell silent on Saturday after emergency talks between the world’s biggest-selling plane maker and its 27,000-strong machinists’ union failed to agree a new contract.
   Each day of the strike will cost Boeing $100 million in sales and 1 cent per share in profit, according to analysts, who say the company will try to dampen the ripple effect on global suppliers by slowing rather than halting a vast industrial supply chain.
   Boeing is cushioned for the time being by a $4.1 billion profit last year and a record $275 billion worth of commercial plane orders in its books. But the strike could create problems much sooner for an increasingly global list of suppliers.
   ‘My big worry is that historically Boeing strikes tend to be protracted,’ said Howard Wheeldon, senior strategist at BGC Brokers LP in London.
   ‘It is serious. This isn’t just a dispute between the workforce and Boeing, but between the workforce and its own union. I am concerned it will get worse before it gets better.’
   Any prolonged strike will have an impact first on companies which produce parts and engines for existing models such as the popular single-aisle 737 or the wide-body 777 mini-jumbo, but it could eventually push back the already delayed 787 Dreamliner.
   A spokesman at Japanese supplier Fuji Heavy Industries Ltd, whose main business is making cars under the Subaru brand, said a lengthy strike could have an impact on its aircraft division.
   he result of outsourcing, especially on the 787, means the effect of the stoppage will be felt around the world, piling up inventories and putting pressure on Asian and European suppliers responsible for much of the main body of Boeing’s newest aircraft.
   Japan’s heavy engineering firms Mitsubishi Heavy Industries, Kawasaki Heavy Industries and Fuji Heavy Industries are taking part of the project risk in developing new carbon-fiber fuselage and wing structures for the 787, and stand to lose if the project is further derailed.
   A spokesman at Fuji Heavy, whose main business is making cars under the Subaru brand, said on Monday a prolonged strike could have an impact on its aircraft division.
   ‘We do good business, especially for the 777. Right now we’re waiting for information from Boeing, but if this lasts one, two weeks, it would have some impact,’ he said.
   Mitsubishi Heavy declined to comment. Kawasaki Heavy said it was checking on the potential impact.
   Italy’s Alenia, a unit of aerospace and defense giant Finmeccanica, is Europe’s biggest player on the 787, building parts of the fuselage and tail.
   In the United States, Spirit Aerosystems Holdings Inc, a former Boeing unit making the front fuselage, looks to be the most vulnerable. Aerospace component firms Rockwell Collins Inc and Goodrich Corp may also face inventory problems if Boeing stops taking delivery of parts.
   Singapore Airlines, which has 20 of the 787s on order for delivery starting in 2011, said it was in talks with Boeing over how the walkout might affect deliveries.
   Production at the world’s biggest-selling jet maker halted early on Saturday after Boeing failed to improve its contract during two days of emergency talks with the IAM, which rejected the company’s ‘best and final’ offer on Wednesday.
   That means there will be no further production of Boeing’s 737, 747, 767 and 777 planes — one of the main US export currency earners — and its already delayed 787 Dreamliner could fall even further behind schedule.
   The new freighter version of its popular long-range 777, which has 75 orders and is set for first delivery in the fourth quarter, also faces delays, along with early production work on Boeing’s new jumbo, the 747-8.
   Boeing, which made a $4.1 billion profit last year and has a record $275 billion worth of commercial plane orders in its books, could financially survive a short work stoppage.
   The strike will knock about 1 cent per day off earnings per share, according to Wall Street analysts.

China announced it would provide more opportunity for foreign investment, vice-premier Wang Qishan said on Monday at the opening of the 12th Xiamen International Trade and Investment Fair in the southeast Fujian Province.
   China will insist on its opening-up policy continuing to perfect the policies for the utilisation of foreign capital to provide more spaces for overseas enterprises in the country.
   As one of the main forces for the country’s development, foreign investment had brought capital, technology and management experience, among others. As China was the developing country that had attracted the largest amount of foreign investment over the past 16 years, more fields covering agriculture, manufacturing and services, were being explored, Wang said. Many international companies viewed China as their first choice.
   Wang announced five policies for future investment services, covering promotion of the investment environment, better utilization of foreign capital and encouraging Chinese enterprises to invest in foreign countries, among others.
   China will raise the service qualities of governments and guarantee a fair investment environment with a transparent legal system.
   The government is encouraging foreign capital to flow into high-tech, modern agriculture, energy conservation industries and modern services to enhance the independent innovation and harmonious development. It will also encourage foreign companies to invest domestically through founding local offices or participating in the reforms of domestic enterprises.
   In the post-Olympic Games period China would insist on the opening-up policy and peaceful development, commerce minister Chen Deming said.
   ‘I believe every friend here at the fair will receive the opportunity and benefit from the peaceful rise of China.’
   The Xiamen fair has
   become an influencial platform for mutual investment that is welcomed by governments, intermediate agencies and enterprises.
   ‘The country China is committed to meeting its World Trade Organisation obligations, which should boost foreign direct investment even more,’ said Alessandro Teixeira, World Association of Investment Promotion Agencies president.
   ‘Sectors such as domestic commerce, financial services, insurance and tourism are being gradually opened up. Geographic restrictions on where foreign companies are allowed to set up operations are expected to be relaxed in the coming years,’ he said.

Emerging economies are bearing the brunt of global meltdown, giving double-digit negative returns in the past three months, even as Indian stocks have managed to perform the best among BRICs in August.
   According to Standard & Poor’s monthly stock market review ‘The World by Numbers’, ‘world’s emerging markets have fared even worse than its global peers falling 7.09 per cent in August and 19.40 per cent over the past three months.’ With the credit crisis casting its shadow on the international market, developed and emerging equity markets lost ground in August, and have now produced double-digit negative returns over the past three months, it said.
   Despite equity returns from the emerging economies declining for a fourth straight month in August, Indian market managed to give the least negative return of 1.35 per cent. While the emerging markets gave returns to the tune of negative 7.09 per cent in the month.
   Among the BRIC economies as well, equity markets in India performed better than its peers, whereas Russia declined 15.23 per cent, followed by Brazil (10.04pc) and China (7.82pc).
   For the three-month period ended August, Indian equity market returns dropped 15.19 per cent, while they had given negative returns of 10.83 per cent during the past year.
   Further, amid political instability, returns from the equity markets in Pakistan declined 20.57 per cent.
   Among the emerging market pack, only Philippines (1.68pc) and Thailand (0.90pc) gave positive returns during the month.

In rescuing Fannie Mae and Freddie Mac, the US government is taking an unprecedented step into the financial sector in a bid to steady an ailing housing market and ease a global credit crunch, analysts said.
   A series of steps announced Sunday places the struggling mortgage finance giants in a ‘conservatorship,’ which is the equivalent of a bankruptcy reorganization under the aegis of the government.
   In what is likely the largest US government intervention in the private sector, the plan effectively adds some 5.4 trillion dollars in potential liabilities from the two firms to the Treasury — equivalent to the entire federal debt.
   The hope is that by opening up the vast coffers of the US government to the government-sponsored enterprises, confidence will return to the housing and financial system, minimizing any losses.
   ‘There is no quick fix. This is not one,’ said Robert Brusca at FAO Economics.
   ‘But it should help to stabilize markets and give the government the opportunity to use the GSEs to help extract us from this mess.’
   Fannie Mae was originally a government agency created during Great Depression to help provide liquidity for housing. It was privatized in 1968 and Freddie Mac was chartered by Congress in 1970 to provide competition.
   But many officials and analysts argue there was a contradiction in the mission of the two, which tried to maximize results for shareholders at the same time seeking to lower the cost of mortgage credit.
   ‘I attribute the need for today’s action primarily to the inherent conflict and flawed business model embedded in the GSE structure,’ Treasury secretary Henry Paulson said in announcing the unprecedented takeover.
   ‘Because the GSEs are in conservatorship, they will no longer be managed with a strategy to maximize common shareholder returns, a strategy which historically encouraged risk-taking.’
   Brusca said that ‘the real problem was their mission, their organizational form as GSEs and their size. The mortgage mess was just an inconvenient truth that made it all less viable and exposed the warts that had been there all along.’
   The takeover provides the US government with one billion dollars in a new class of preferred shares at no cost to taxpayers. The new plan does not eliminate the existing common and preferred shares, but means they would absorb any losses ahead of the government, Paulson said.
   Another step — authorized by emergency legislation passed by Congress in July — opens up a new, unspecified, Treasury line of credit to the two firms through the Federal Reserve.
   Paulson also said Treasury ‘is initiating a temporary program’ to purchase mortgage-backed securities of Fannie and Freddie, to help provide liquidity in a financial market strained by a credit crunch.
   David Kotok, chief investment officer at Cumberland Advisors, said the new initiative ‘draws the line on moral hazard so the existing preferred and common shares do not get bailed out by the government.’
   The existing shares ‘most likely are worth a few pennies’ but the fate will not be known for some years until the crisis is over, Kotok said.
   Kotok said the plan will likely ‘jump start’ the ability of Fannie and Freddie to pump money into the housing market and that ‘this will bring down mortgage rates.’
   Not all analysts welcomed the plan. Nouriel Roubini, a New York University economist who has been sounding the alarm for over a year on the financial crisis, said the plan is flawed.
   ‘This bailout plan has mostly lousy features that exacerbate the moral hazard of this government intervention and the overall fiscal costs of such intervention,’ he said.
   Peter Cohan, a management consultant at Peter Cohan & Associates, said the news may unsettle markets further.
   ‘It will probably wipe out common equity holders and damage the worth of preferred shareholders,’ he said. ‘Despite the weeks of buildup to this plan, the bad news is now much clearer to investors than the good news.’
   Regardless, some said there was no choice but to save the companies that underpin trillions of dollars in mortgages to avert a wave of failures that would lead to a financial system meltdown.
   ‘Our economy and our markets will not recover until the bulk of this housing correction is behind us,’ said Paulson.

Chinese shares extended their losses on Monday as the benchmark index slumped to a 21-month low, dragged down by the country’s oil giants and concerns of slower economic growth.
   The two bourses started the day with active trading on Monday morning, buoyed by gains in regional markets and boosted by Sunday’s news that the US government would take over troubled mortgage giants Fannie Mae and Freddie Mac to stabilize the financial market.
   Shares were also boosted by the China’s securities regulator’s decision to allow shareholders of listed companies to issue exchangeable bonds to ease share oversupply after the lock-up periods.
   But heavy selling of shares of the country’s two oil giants soon ignored the impact of the government measures and caused the benchmark index to plummet.
   PetroChina shed 4.86 per cent to 11.36 yuan ($1.62), the lowest on record. Sinopec, the country’s biggest crude refiner,tumbled 7.59 per cent to 9.13 yuan.
   Financial shares settled with a tempered pace of increase as China Construction Bank edged up 1.42 per cent to 5 yuan, and Bank of China jumped 1.15 per cent to 3.52 yuan.
   Investors shrugged off the government’s plans to boost the market soon, indicating how weak the market was, said an analyst with the Shanghai-based Xinlande Securities.
   Market declines would continue in the short time against the backdrop of slower economic growth in China, according to Shenyin Wanguo Securities.

The dollar rose against the euro and yen on Monday after US authorities bailed out two mortgage finance giants, easing investor worries over the future of global markets, dealers said.
   The euro fell to 1.4165 dollars in London trading to mark a fresh 11-month low, from 1.4260 dollars in New York late on Friday.
   Against the Japanese currency, the dollar rose to 108.63 yen from 107.67 yen.
   ‘The US government’s plan to takeover Freddie Mac and Fannie Mae aims to provide stability to financial markets and support the availability of mortgage finance,’ said Bank of Tokyo-Mitsubishi economist Lee Hardman in London.
   The US treasury department announced on Sunday, when markets were closed, that it would put Freddie Mac and Fannie Mae under strict federal control and may invest up to 200 billion dollars in them.
   Fannie Mae and Freddie Mac, government-chartered, shareholder-owned firms which provide liquidity to the US housing market, have been whipsawed by the financial meltdown in the past year.
   The companies have lost some 90 per cent of their value on fears of further losses from mortgage defaults by ‘subprime’ customers, who were given loans despite patchy credit histories.
   The US government plan could potentially cost taxpayers billions of dollars and Washington’s decision to buy back preferred stock would mean common shareholders still risk losing millions of dollars, dealers said.
   ‘Some players see expansion of debt on the US Treasury’s balance sheet,’ which would ultimately hurt the dollar and US bonds, Jonathan Barrett, managing director of Commodity Broking Services in Sydney, told Dow Jones Newswires.
   The market was further relieved by reports that South Korean and Japanese banking companies were considering investing in Lehman Brothers, one of the Wall Street banks worst-hit by the subprime debacle.
   The euro’s slide meanwhile continued on negative market sentiment over the outlook in the eurozone, whose 15-nation economy contracted in the second quarter for the first time Hsince the bloc’s creation in 1999.
   In London trading on Monday, the euro changed hands at 1.4165 dollars against 1.4260 late on Friday, at 154.71 yen (153.57), 0.8050 pounds (0.8075) and 1.6039 Swiss francs (1.5955).
   The dollar stood at 108.63 yen (107.67) and 1.1263 Swiss francs (1.1186).
   The pound was at 1.7693 dollars (1.7653). On the London Bullion Market, the price of gold fell to 807.54 dollars per ounce from 808.50 dollars late on Friday.

World oil prices rebounded sharply from five-month lows in Asian trade Monday on worries that Hurricane Ike will threaten production facilities in the US Gulf Coast, analysts said.
   New York’s main contract, light sweet crude for delivery in October, was up 1.89 dollars to 108.12 dollars a barrel from its close in New York floor trading on Friday.
   Brent North Sea crude for October surged 1.71 dollars to 105.80 dollars a barrel.
   ‘Oil prices are reacting to the threat of Hurricane Ike, which is heading toward the Gulf of Mexico,’ said Victor Shum, an analyst with energy consultancy Purvin and Gertz in Singapore.
   ‘In the short term, hurricanes will determine the price direction of crude oil. It’s likely that the market will test new lows this month if the hurricane season does not do any damage to oil production in the Gulf of Mexico.’
   The hurricane slammed into Cuba on Sunday, officials said. Ike, packing 195-kilometre per hour winds, earlier left dozens of people dead in a rampage across Haiti.
   The hurricane is expected to eventually churn past Florida into the Gulf of Mexico and sweep toward Louisiana and the storm-battered city of New Orleans as early as Tuesday.
   Last week, Hurricane Gustav forced the closure of US oil production in the Gulf, but analysts said the storm did little long-term damage to oil rigs and production platforms there.
   Oil prices, which rose to record highs above 147 dollars in July, had tumbled to five-month lows close to 104 dollars last week as the cooling global economy stoked fears of waning energy demand.
   After hosting the 2008 Olympic Games last month, China had cut its imports of gasoline and diesel, Shum said, adding that slowing demand in the eurozone and the rest of Asia was likely to weigh on oil prices.
   Shum said the market was also closely watching the results of a policy meeting on Tuesday by oil ministers of the Organisation of the Petroleum Exporting Countries in Vienna.
   Some analysts are expecting the ministers to agree to trim output to help keep crude above 100 dollars a barrel.
   ‘I think in the end, OPEC’s actions — whether it will be at tomorrow’s meeting or in the next month or two — will be the key to determine prices for the rest of the year,’ Shum said.

OMS demand falls on low rice price
Demand for subsidised rice on open-market sale fell as rice prices dropped sharply in the market with new Aus rice entering the market, a senior government official said on Monday. ‘Up to 73 per cent of the allotted OMS rice is being sold a day,” food secretary Molla Waheeduzzaman told reporters at his office. The food secretary said the inflow of Aus rice in the market and releases of the hoarded rice were the main reason behind the fall in the prices. Asked if the OMS of rice would be closed, Waheeduzzaman said, ‘The ministry has nothing to do in this regard.’ ‘A committee of food planning will make decision. The OMS does not need to be continued the way it is going on,’ Waheeduzzaman said. He said there was not much demand for OMS of rice in the market. Besides, the demand kept falling in the northern region, in particular. Rice prices in market is less than the government-fixed ones. Waheeduzzaman said the government did not have any plan to further lower rice price. It may rather stop OMS. According to the secretary, the government has now about 12 lakh tonnes of food in stock. The government procured 7.84 lakh tonnes of rice and about 45000 tonnes of paddy during the Boro season, he added. The food secretary said about 1.53 lakh people in 23 districts were affected by the floods. The government has allocated Tk 1 crore in cash and 10,000 tonnes of food for them, Waheeduzzaman added. ‘There is no danger of big flood in the country if India does not experience fresh heavy rainfall and water does not roll down into Bangladesh. The government is keeping an eye,’ the official added.
— Bnews24.com