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The flow of foreign direct investment into the country dropped by 16 per cent to $666 million in 2007 from $793 million in 2006, marking an investment climate which was plagued by energy shortage and political uncertainty under a state of emergency.
   The diminution of the inflow of FDI saw Bangladesh losing its ranking by one position to 121st in inward FDI performance index and slip to 119th from 117th in the inward FDI potential index among 141 economies, according to the World Investment Report 2008 prepared by the United Nations Conference on Trade and Development.
   ‘It [decline in FDI] is the result of the investors’ choice to invest or not to invest. Our business competitiveness was constrained by infrastructure problems including gas and electricity shortage,’ the executive chairman of the Board of Investment, Kamaluddin Ahmed, told the people at the report-launching ceremony in the BoI’s office on Wednesday.
   Professor M Ismail Hossain of the Jahangirnagar University, who presented the report, pointed out that although there was no political instability in 2007, entrepreneurs could not be free from a sense of political uncertainty. ‘Supports like one-stop service for utilities could not be provided as the BoI has some limitations,’ he said, referring to certain investment constraints.
   Foreign investment inflow into Bangladesh decreased in a year when South, East and South-East Asia held the lead with 19 per cent increase in FDI among developing regions that are attracting investments, and the global FDI showed record flows with 30 per cent rise to $1,833 billion. The FDI inflow jumped to $845 million in 2005 from $460 million in 2004.
   The UNCTAD’s report found that the three largest FDI recipients are the United States with $233 billion, the United Kingdom with $224 billion and France with $158 billion.
   In Bangladesh, the volume of FDI in 2007 was only 3.4 per cent of the ‘net new investment by enterprises in the domestic economy’, which is technically called Gross Fixed Capital Formation, according to the WIR which focuses on FDI trends worldwide at the regional and country levels and the emerging measures to improve its contribution to development. The capital formation rate is 22.7 per cent in Europe, 20.6 per cent in Asia and 5.7 per cent in South Asia.
   The BoI’s chief claimed that the registration figures of both local and foreign investment has risen in recent times, bouncing back from the previous years’ decline in investment trends.
   In 2008, local entrepreneurs registered investments worth $1.63 billion with the BoI compared to proposals valued at $441 million in 2007, $1.12 billion in 2006 and $1.6 billion in 2005, according to official figures.
   ‘Positive trends of local investment have been created in the country which is going ahead with sustained economic growth of more than 6 per cent,’ said Ismail, painting a bright picture of investment prospects in Bangladesh.
   When he was asked how the BoI would overcome infrastructure bottlenecks, especially gas and electricity crisis, in attracting investments in industries, Kamaluddin hinted at the policy shift to promote ‘less gas-consuming’ industries, encourage investment in infrastructure, and focus on the service sector, particularly information technology.
   ‘We were not in a position to provide gas as per the demand made by Tata. Now we have to explore coal as an alternative source of energy and the government is preparing the Coal Policy in this regard,’ he said in reply to a query on the fate of big investment proposals.

The delivery of imported reconditioned vehicles from Chittagong Port that remained stalled for about two months following a row between the importers and National Board of Revenue over duty assessment and depreciation issues started on Wednesday, custom officials and traders said.
   The importers have started taking delivery of their vehicles on submission of bank guarantee certificates allowed by the NBR as an interim measure until the end of legal battle that is going on between the Bangladesh Reconditioned Vehicles Importers Association and the NBR.
   The both sides entered into a legal battle as the importers declined to take delivery of the imported reconditioned vehicles under a new duty and depreciation assessment system.
   NBR provided the interim scope to the importers in a bid to overcome the deadlock that contributed to severe space congestion at the port’s car sheds packed up with over 5,000 reconditioned vehicles imported from Japan, Customs and Port officials said.
   Abdul Huq, president of BARVIDA, told New Age that the importers agreed to take delivery of the imported reconditioned vehicles on submission of bank guarantee as allowed by NBR as an interim facility to break the stalemate.
   ‘Our importers started to take delivery of the vehicles from the port though it was very time consuming and a bit cumbersome to get ready with bank guarantee certificates,’ he said. ‘But the row will continue until verdict from the court on the case is received. The hearing of the case will be held on October 14 and we are waiting for the verdict,’ he added.
   Al Amin Pramanik, joint commissioner of Chittagong Customs House, said that the importers had agreed to take delivery of the imported reconditioned vehicles with bank guarantee certificates. But it would take time for taking delivery of all the cars.

Dhaka stocks climbed up on Wednesday, two days before the nine-day closure of the bourse, as investors bought shares on an expectation of good return after the vacation, said market operators.
   The general index of the Dhaka Stock Exchange gained 24.89 points, or 0.86 per cent, to close at 2925.45, while its blue chips index, DSE20, advanced by 38.07 points, or 1.59 per cent, to finish at 2432.63.
   A DSE stock broker said the investors during the last couple of days ahead of beginning of the closure were expecting that the market would rise further after the vacation.
   The DSE and the Chittagong Stock Exchange go to a closure from September 26 to October 4 on the occasion of Shab-e-Qadr, Eid-ul-Fitr and weekly holidays.
   ‘The market witnessed strong presence of both the institutional and retail investors,’ said DSE chief executive officer Salahuddin Ahmed Khan, adding it appeared that the institutional investors, prime movers of the market, were also active before the vacation.
   Turnover at the DSE increased to Tk 430.44 crore from the Tuesday’s Tk 353.93 crore.
   Of the total 224 issues traded at the DSE, 143 advanced, 72 declined and nine remained unchanged.
   Market capitalisation at the bourse rose to Tk 1,02,758 crore, its highest ever mark, from its previous high of Tk 1,02,123 crore on Tuesday. The market indicator crossed Tk 1,00,000 crore mark on Monday for the first time in the history of the country’s capital market.
   Beximco Pharmaceuticals topped the turnover leaders with a total transaction of Tk 42.97 crore.
   Beximco, ACI, Titas Gas Transmission and Distribution, Grameen Two Mutual Fund, Aims 1st Mutual Fund, ICB 2nd NRB Mutual Fund, Summit Power, Prime Finance and Investment, and LankaBangla Finance were the other turnover leaders.
   The CSE selective categories index gained 53.40 points or 0.93 per cent to close at 5796.74, while its blue chips index, CSE30, advanced by 75 points or 0.98 per cent to finish at 7744.89.
   Of the total 137 issues traded at CSE, 86 posted gains, 45 dropped and six remained unchanged.
   Turnover at the CSE increased to Tk 58.20 crore from the Tuesday’s Tk 57.32 crore.

The country’s export earnings in the first month of the current fiscal stood at $1.54 billion with 77 per cent proceeds or $1.19 billion from the garment, said sources at the Export Promotion Bureau.
   Officials at the bureau, which will take some more days to release the official monthly report, said export earnings in July was much higher than their expectation.
   The Bangladesh Garment Manufacturers and Exporters Association president, Anwar-Ul-Alam Chowdhury Parvez, claimed that the tremendous increase in exports of sweater raised the overall garment export proceeds to a new high.
   According to the data available to New Age, Bangladesh’s exports earning stood at $1,543 million in July of the current fiscal 2008-2009 and garment exports earnings accounted for $1,188 million.
   The export earning from woven garments, mainly shirts and trousers, in the month stood at $547 million which is 58 per cent higher than the earning recorded in first month of the previous fiscal.
   Export earning by knitwear, mainly T-shirts and sweaters, stood at $640 million 74 per cent up of what knitted wear exporters had earned in the first month of the previous fiscal.
   Encouraging growth of export earning at the starting of the current fiscal has made the garment exporters delighted more than usual as they had a bitter experience in the first month of the past fiscal.
   In July of the 2007-2008 fiscal year, Bangladesh’s garment export earning had faced a 23 per cent negative growth over that of a year ago earning, and the exporters explained it a delayed impact of severe unrest the industry had experienced at the end of 2006.
   ‘I see garment exporters have a good starting in the current fiscal and growth in both knit and woven category are encouraging,’ said the BGMEA president.
   Industry people say sweater exporters, who faced sluggish business in the previous year due to fewer orders from EU buyers, had a very good booking season this year.
   Increasing volumes of sweater orders from EU buyers came this year as many importers diverted from China. Sharp increase on labour costs there put Chinese manufacturers of basic sweaters into difficulty.

India’s Tata group was moving out of an unfinished factory built to make the world’s cheapest car due to protests over a land dispute, reports said Wednesday.
   Tata was moving equipment from the plant in Singur in West Bengal to an unspecified facility following a deadlock in talks between state authorities and the protesters, the Press Trust of India reported.
   A Tata Motors spokesman declined to comment, but the state police confirmed that laden trucks were seen leaving the plant near Kolkata, capital of the Marxist-ruled state.
   Tata has ploughed 350 million dollars into the factory, but it cannot complete the project and begin production due to violent protests by the state opposition party and farmers who say their land was stolen.
   Efforts to resolve the stand-off failed again Wednesday as protest leaders left a compromise meeting with the state’s governor Gopal Krishna Gandhi, officials said.
   Tata Motors had said it hoped to launch the four-door Nano in October in time for the big-spending Hindu festival season. The company wants to sell the car for 100,000 rupees (2,150 dollars).
   Shifting the Singur plant would delay any mass roll-out for months.
   Prakash Karat, chief of the Communist Party of India-Marxist, which governs West Bengal, was concerned about the ongoing stand-off.
   ‘We are worried over the persisting protests against the Nano plant and we fear Tata Motors will leave Singur if a conducive atmosphere is not immediately restored,’ Karat told reporters in Kolkata on Wednesday.
   Trade lobbies say the departure of Tata from Singur could damage the economic revival
   of West Bengal, which in the past has seen a flight of capital in the face of nagging industrial unrest.

Bangladesh Parjatan Corporation will be bifurcated to flourish tourism industry and attract more local and foreign investors, BPC sources said.
   They said the Council of Advisers is likely to approve next month a tourism-friendly policy that will open up a new horizon for the industry.
   The BPC will be split into Bangladesh Tourism Board and Bangladesh Tourism Department. For this, a draft of Bangladesh Parjatan Ordinance-2008 has been sent to the Civil Aviation and Tourism Ministry for vetting.
   Special assistant to the chief adviser for Civil Aviation and Tourism Mahbub Jamil has said the policy is likely to be approved by the Council of Advisers next month for flourishing the tourism industry.
   He said the government has been working to move the industry ahead on the basis of public-private partnership.
   According to the proposed ordinance, BPC chairman Shafique Alam Mehdi said, the National Tourism Board will be an autonomous body. It will have the power to take any decision and implement it, he added.
   To ensure private partnership, Mehdi said five directors, out of 10, would come from the private sector. He said an exclusive tourist zone would be set up like the export processing zone under the new policy.
   The BPC chairman said proper arrangements for entertaining the tourists would be ensured consistent with local traditional and cultural values. Besides, he said, the authorities are considering introduction of tourist police to ensure security of the tourists.
   Under the new policy the tourism board could make any agreement on earning, selling and leasing movable and immovable property.
   The sources said Bangladesh Parjatan Department would work as a regulatory body. It will coordinate the work between among hotel, motel, travel agency and tour operators, and also look into their standard and make registration.
   Besides Civil Aviation and Tourism Ministry, other concerned ministries like Communications and Cultural Affairs will be involved in expansion of tourism, and international criteria will be maintained in all affairs, the sources said.
   They said a beach committee will be formed for more modernisation and safety of Cox’s Bazar Sea Beach.
   The BPC has also sent a proposal to the Civil Aviation and Tourism Ministry for introducing on-arrival visa to reduce hassles of foreign tourists.

Operations of state-owned banks across the country were affected after employees went on a two-day strike from Wednesday protesting the merger among public sector banks and demanding another chance to opt for pension.
   Clearing activities and cash transactions of many banks were affected, bank officials said.
   ‘The strike has affected our operations today. Majority of the employees have not turned up for work. There would be a significant business loss because of this,’ UCO Bank’s chairman and managing director SK Goel told PTI in Mumbai.
   Unions decided to go on strike after talks between United Forum of Bank Unions and Indian Banks Association in the presence of Chief Labour Commissioner, SK Mukhopadhyaya, failed in Delhi on Tuesday.
   ‘The strike is complete across the country. UFBU will meet shortly to chalk out further course of action,’ its Convenor CH Venkatachalam said.
   Apart from the merger, other demands of the unions include settlement of issues like wage revision, another option for pension scheme, termination of job outsourcing in the banking industry and immediate appointments in the class IV cadre. IBA chief executive K Ramakrishnan said the unions went on strike breaching the mutual understanding reached between IBA and UFBU in January this year.

The Grameenphone Ltd has extended time for local institutional investors to participate in its private placement offering, which takes place before the telecom operator’s planned initial public offering.
   ‘Local institutional investors need to be given adequate time to do due diligence and allocate funds for the bidding,’ GP chief executive officer Anders Jensen said, adding ‘We are working with the Securities and Exchange Commission to expedite the matter.’
   Under the current challenging global stock market situation in which international investors are hesitant to commit for new investment, it is important to ensure that potential investors are given adequate time to make their investment decision, he said.
   ‘The owners of GP remain committed to the IPO to develop the capital market of Bangladesh and to share the company’s success with the future shareholders,’ said the GP CEO.
   On July 21 last, the GP board of directors approved a proposal of listing of the company’s shares through an IPO. On July 29, GP filed an IPO application with the Securities Exchange Commission, said an official release on Wednesday.

Malaysia’s inflation rate jumped to a 26-year high of 8.5 per cent in August, driven by the escalating cost of food and fuel, according to official data released Wednesday.
   ‘The result was slightly higher than expected but the central Bank Negara would not raise interest rates to ensure growth,’ said Wan Suhaimi Saidi, an economist with Kenanga Investment Bank.
   ‘It is slightly above my expectation. I was looking at 8.4 per cent. I don’t think the government will increase the key interest rates. It will be maintained at 3.50 per cent till the year-end to support growth,’ he told AFP.
   The Department of Statistics revised downwards the inflation figure for July to 8.3 per cent.
   It said the cost of food and non-alcoholic drinks rose 11.7 per cent in August compared to a year ago. The high inflation is already hurting consumers with many Malaysians cutting down on their food bill.
   ‘The increase in inflation for August was shown in the selected main groups, namely food and non-alcoholic,’ it said in a statement.
   The August data showed escalating prices in most categories, including transport which jumped 21.8 per cent, and restaurants and hotels which rose 6.5 per cent.
   Malaysia’s government hiked the fuel price by 41 per cent in June, in a move to rein in the ballooning cost of subsidies but it has indicated prices could be lowered soon.
   High inflation was one of the factors that led to an unprecedented humiliation at March general elections for the ruling coalition, which lost five states and a third of parliamentary seats.
   Bank Negara has said it expects inflation to moderate in the second half of 2008 as economic growth is likely to slow down.

Kuwait plans to spend its bumper petrodollar earnings on an array of mega projects over the next five years including a new business hub dubbed Silk City, according to a plan published Wednesday.
   The OPEC member has earmarked 35 billion dinars ($131.5b) for Silk City, as well as a harbour, railway and metro system, in a bid to diversify its oil-dependent economy and become a regional trade and financial centre.
   The ambitious project, Kuwait’s first five-year development plan in more than two decades, aims to ‘boost gross domestic product, diversify sources of income and help the private sector take the lead in the domestic economy,’ said Al-Rai newspaper which published the draft plan.
   The plan, which includes a total of 1,100 projects, must be approved by the parliament before it can be implemented. The government is expected to send the plan to parliament for debate next month.
   It is not immediately clear if all the projects will be funded by the state’s petrodollars.
   The plan will finance part of the 77 billion dollars Silk City, which aims to revive the ancient Silk Road trade route by becoming a major free trade zone linking central Asia with Europe.
   The city will be located in the northern tip of Kuwait in the strategic area of Subbiya near the Iraqi border, and is set to include what could be the tallest tower in the world.
   When complete in 2030, it will be home to around 700,000 people and is projected to create 450,000 jobs.
   The Gulf state has been vying to diversify its economy, which is dominated by both the public sector and oil revenues. But wrangling between parliament and the government has delayed key projects.
   The oil sector contributed around 59 per cent of Kuwait’s GDP of more than 110 billion dollars in 2007. The private sector’s share still remains at just over 30 per cent despite the privatisation of a number of state projects.
   The plan, scheduled to run between 2009 and 2014, also calls for the construction of a long-delayed 25-kilometre causeway to link Subbiya with the capital and a mega container harbour in nearby Bubiyan island to serve Iraq and other Gulf states.
   It also envisages construction of a railway and metro at a projected cost of more than 11 billion dollars, in addition to around 50,000 housing units for citizens.

Leading eurozone economies are on the brink of recession as business confidence surveys released Wednesday hit three to five years lows amid a global financial crisis, analysts said.
   The prevailing gloom in Germany, France and Italy included signs that worse might still lie ahead, raising pressure on the European Central Bank to lower its key lending rate, they added.
   German business confidence dropped for the fourth straight month in September to its lowest level since May 2005, Munich-based economic research institute Ifo said.
   Its climate index for the biggest European economy fell to 92.9 points from 94.8 points in August, with the core manufacturing sector reporting a six-month expectations level last seen during a recession in 1992-93.
   In France, business sentiment was at its lowest point since August 2003, the Insee economic institute said, while in Italy it plumbed depths last seen in October 2001, according to the Isae institute.
   Insee said industrial production ‘will continue to slow in the coming months,’ and added: ‘General perspectives which represent industrialists’ outlook for activity overall are deteriorating quickly.’
   In Belgium, seen by many economists as a bellwether of the eurozone trend, the climate also hit a five-year low this month, a central bank survey found.
   An Ifo statement quoted president Hans-Werner Sinn as saying: ‘The downward trend in the Ifo business climate index is proceeding in large steps.’
   Commerzbank chief economist Joerg Kraemer commented that ‘all the signs are pointing increasingly to a recession.’
   Ifo’s data was released a day after a survey of business activity for the 15-nation eurozone found it had slumped to its lowest level since just after the attacks on the United States in 2001.
   A sub-index of the Ifo survey that measures expectations for the coming six months dropped to 86.5 points from 87.0 points, a level last seen in February 1993.
   German manufacturers, the backbone of the country’s export-led economy, ‘reported a considerably less favourable business situation, and more now anticipate a poorer business development over the coming six months,’ Ifo said.
   Earlier this month, German press reports said the government would slash its 2009 growth forecast to 0.5 per cent from a previous estimate of 1.2 per cent when it publishes an update on October 16.
   After contracting by 0.5 per cent in the second quarter of this year, the economy was expected to shrink further in the third, in which case it would meet the technical definition of a recession.
   On Tuesday meanwhile, a purchasing managers’ index compiled by data and research group Markit for the 15-nation eurozone slid to 47.0 points in September, its lowest level since November 2001.
   ‘House prices in the US and a number of European countries are falling, dragging down the economy with them,’ Kraemer noted.
   At Global Insight, senior economist Timo Klein added: ‘There is an ongoing negative influence from global financial market turbulence that is fanning recession fears.’
   UniCredit Markets economist Alexander Koch said: ‘We don’t see good chances for a quick trend reversal until the end of the year.’
   Klein forecast the ECB would therefore cut its benchmark lending rates in 2009 once inflation that is currently at 3.8 per cent had eased, while Kraemer expected the first cuts ‘in the first half of next year.’

Vietnam’s trade deficit reached an estimated 15.8 billion dollars for the first nine months of the year, according to official figures released Wednesday.
   Imports between January and September reached 64.4 billion dollars, up 48.3 per cent year-on-year, while exports grew 39 per cent to 48.6 billion dollars, the General Statistics Office said.
   The revised trade deficit for January-August stood at 15.3 billion dollars, against 16 billion dollars in a previous estimation.
   The communist-ruled country reported a rise in imports of machinery and equipment for production of 35.4 per cent, totalling 10.5 billion dollars.
   Vietnam spent 9.7 billion dollars on refined oil and petroleum products, up by 82.9 per cent amid sharply higher world oil prices.
   Automobile imports were worth 1.97 billion dollars, a rise of 120.4 per cent.
   Fertiliser and steel imports also increased sharply, by 100.9 per cent and 68.1 per cent respectively.
   Vietnam earned revenues mostly from the sales of crude oil, which brought back 8.8 billion dollars, an increase of 52 per cent, and textiles exports worth 6.8 billion dollars, up by 20.2 per cent.
   Returns from rice sales were reported at 2.4 billion dollars, up by 89.7 per cent, as international rice prices have risen sharply, the GSO said.
   The trade deficit for September alone reached 500 million dollars.
   The government hopes to contain the trade deficit to below 20 billion dollars for 2008. And with high inflation — 27.9 per cent in September year-on-year — it targets economic growth of between 6.5 and 7.0 per cent.

Thousands of Hong Kong savers mobbed branches of Bank of East Asia Wednesday to withdraw deposits, as the bank scrambled to reassure them it was not overexposed to Lehman Brothers and AIG.
   Police were called in to control the crowds after text messages flashed across the city warning the bank was unstable as it held a large number of assets linked to the failed Wall Street bank and the troubled insurance giant.
   But BEA and the city’s financial authorities moved quickly to rebuff the accusations, insisting the bank was in a solid financial position.
   ‘It has come to the notice of The Bank of East Asia... that malicious rumours have been circulated questioning the stability of the bank,’ the bank said in a statement.
   ‘The management of BEA hereby states in the strongest possible terms that such rumours have no basis in fact. The management further confirms that the bank’s financial position is sound and stable.’
   Hundreds gathered outside branches across the city.
   Up to 400 disgruntled savers, many of them elderly, had to be held back by police as they battled to get inside one branch of BEA in the south of Hong Kong island before it closed, according to an AFP photographer at the scene.
   ‘I hope it is just panic, but you never know. I am going to take my money out and put it in another bank,’ said public relations worker Ada Ho, outside a city centre branch. Ho said she read the rumours on the Internet.
   The bank’s deputy chief executive, Joseph Pang, told Dow Jones Newswires that while there have been slightly more bank withdrawals than usual, the situation was ‘manageable.’
   Pang said the bank first learned of the rumour on Monday, but didn’t disclose it immediately because it wanted to avoid spreading panic.
   The statement said BEA’s outstanding exposure was 422.8 million Hong Kong dollars (US$54.2m) to Lehman’s and 49.9 million dollars to AIG.
   The statement also said its total consolidated assets stood at 396.6 billion Hong Kong dollars on June 30, with a capital adequacy ratio of 14.6 per cent, well above the international required level.
   The Hong Kong Monetary Authority, the city’s de facto central bank, insisted the banking system was ‘safe and sound’.

The BRAC Bank Limited has opened ATM booths at Banani, Gulshan and Mohakhali in Dhaka city recently.
   Firoz Ahmed Khan, head of retail banking of BRAC Bank, inaugurated the new ATM booths through ceremonies at the booths’ premises, said a press release.
   Bank marketing and corporate affairs head Abedur Rahman Sikder and assets and retail banking head Abdur Rahman, among others, were present on the occasions.
   The ATM booths are opened to provide the bank’s ATM card holders with 24-hour cash withdrawal facility.

Citycell, telecom operator, recently signed an agreement with the Eastern Management Services Ltd (representative of MoneyGram International in Bangladesh).
   Under the agreement, Eastern Management Services will use Citycell’s wireless internet service Zoom.
   Shafiul Azam, chairman and chief executive officer of Eastern Management Services, and Michael Seymour, CEO of Citycell, signed the agreement at a ceremony held in Dhaka city, said a press release. Senior officials of Citycell were also present on the occasion.

French president Nicolas Sarkozy called Tuesday on key world leaders to hold a summit in November to learn lessons from the global financial crisis and rebuild a ‘regulated capitalism.’
   In a hard hitting speech about capitalist excesses before the UN General Assembly on behalf of the 27-member European Union, Sarkozy also appealed for a ‘continent-wide economic space’ between Europe and Russia.
   His remarks followed those of US president George W Bush who promised leaders fearful of a global economic meltdown that Washington would implement a financial bailout package ‘in the urgent timeframe required.’
   Sarkozy told world leaders gathered here it is time for them to learn lessons from the global financial crisis, rebuild a system that regulates the markets, curb speculation, increases transparency and punishes the reckless.
   ‘It’s the duty of heads of state and government of the countries most directly concerned to meet before the end of the year to examine together the lessons of the most serious financial crisis the world has experienced since that of the 1930s,’ Sarkozy told fellow world leaders.
   ‘Let us rebuild together a regulated capitalism in which whole swathes of financial activity are not left to the sole judgment of market operators, in which banks do their job, which is to finance economic development rather than engage in speculation,’ Sarkozy said.
   Speaking in French through an interpreter, Sarkozy called for ‘rules that apply to all and serve to avert and soften shocks instead of exacerbating them.’
   He appealed for curbs on credit agencies where there is greater transparency in transactions, a reward system that does ‘not drive people to take unreasonable risks, and where ‘those who jeapardise people’s savings are punished.’
   In a press conference afterward, Sarkozy said the summit should be in November based ‘on the format of the G8,’ the Group of Eight leading industrial countries, ‘but with the possibly of opening this to emerging countries.’

Germany’s top trade union said Tuesday it wants an eight per cent pay hike for 3.6 million workers in the key metal and electronics industries, the biggest increase it has sought in 16 years.
   Coming as the country slows, IG Metall’s wage demand points to bruising talks with employers that are likely to set the tone for other pay settlements across Europe’s largest, export driven economy.
   Current pay accords in the auto, IT and household goods industries expire on October 31 so the outcome will be closely watched by all sides, including car makers such as BMW and Volkswagen, and industrial giants like Siemens.
   The European Central Bank too will be concerned, anxious that salaries should not rise too fast and stoke inflation which has just begun to come off record highs, slipping to 3.8 per cent in August from 4.0 per cent in July.
   ‘High wage demands in Germany will not make monetary policy easier for the ECB’ since they lessen the chances of reducing interest rates to support ailing economies, said Commerzbank analyst Eckart Tuchtfeld.
   The 15-nation eurozone economy contracted 0.2 per cent in the second quarter of 2008 and is forecast to stagnate in the third, in which case it would just barely avoid a recession — defined as two quarters of negative growth.
   IG Metall for its part bases its eight per cent demand on the rising cost of living and the solid profits posted by many German companies last year.
   ‘Profits have soared ... but companies have never spent less in wages,’ union president Berthold Huber was quoted as saying in a statement.
   Martin Kannegiesser, head of the Gesamtmetall federation of metallurgy employers, promptly replied by saying: ‘IG Metall has lost its marbles.’
   Kannegiesser charged that the union ‘acts as though we were in a phase of full growth whereas ... the global economy is in an ever more precarious position.’
   Dieter Hundt, head of the German employers federation, said that setting the pay raise bar at eight per cent was ‘irresponsible’ and ‘unrealistic.’
   German wages are negotiated sector by sector and unions have become much more militant following several years of pay moderation that allowed the economy to grow more than in neighbouring countries.
   There have been several strikes this year that disrupted activity in the transport, postal and dairy sectors before higher pay was agreed to. According to the Hans Boeckler foundation, an economic research group close to the unions, Germany is the only European Union member where inflation-adjusted salaries fell between 2000 and 2008, by 0.8 per cent.
   That has raised eyebrows in neighbouring countries because it made the German economy more competitive, producing more goods at lower wage cost.

Brazilian president Luiz Inacio Lula da Silva Tuesday called for a reform of multilateral institutions to enable them to prevent future financial crises.
   ‘The global nature of this crisis implies that the solutions that we adopt must also be global,’ he said in his address to the annual UN General Assembly.
   ‘The economic international institutions today have neither the authority nor the instruments they need to stop the anarchy of speculation.
   ‘We must rebuild them on an entirely new basis.’
   In the past Lula has called for institutions such as the International Monetary Fund and the World Bank to be more responsive to the needs of developing economies.
   But this is the first time that he has made such a plea on the international stage.
   The Brazilian leader also urged the United Nations to ‘call for a vigorous response’ to the current threats facing the world economy, and took aim in particular at speculators.
   ‘The economy is too serious to be left in the hands of speculators. Ethics must also apply to the economy,’ he said.
   ‘Unbridled speculation has caused anguish to entire peoples due to the successive financial disasters that are threatening the global economy,’ he said.
   Brazil, an emerging market, has seen its stock markets and currency suffer as global markets have tumbled, dragged down by the subprime mortgage crisis in the United States.
   Lula also argued that ‘it is time for political decisions’ in a clear allusion to the huge financial bailout of Wall Street institutions being readied by Washington.
   ‘Only decisive action from governments, especially in countries that are at the heart of the crisis, can control the disarray sweeping the global financial sector, with its negative effects on the daily lives of millions people,’ he said.

The dollar dipped against the euro on Wednesday amid concerns that a US financial sector rescue plan is becoming bogged down in political bickering, dealers said.
   The European single currency rose to 1.4663 dollars from 1.4657 in New York late on Tuesday.
   Against the Japanese currency, the dollar advanced to 106.11 yen from 105.49 yen.
   US lawmakers were digging their heels in against the government’s 700 billion dollars financial rescue package, setting the scene for a fierce showdown on Capitol Hill watched anxiously by markets around the globe.
   Federal Reserve chairman Ben Bernanke and Treasury secretary Henry Paulson were facing another day of testimony, after Tuesday’s cold-shoulder reception by senators balking at a swift passage of the bailout.
   ‘Despite the political wrangling, it is possible that the plan will pass by the end of this week or early next week,’ said Calyon analyst Stuart Bennett.
   ‘A few more days of uncertainty is likely to weigh both on equity markets and the dollar,’ he added.
   World financial markets were calmed somewhat after US tycoon Warren Buffett helped partly offset uncertainty surrounding the government rescue package.
   Buffett’s Berkshire Hathaway said it was investing five billion dollars in beleaguered US bank Goldman Sachs.
   Meanwhile, the European Central Bank and Bank of England on Wednesday made an additional 80 billion dollars available to financial institutions on a short-term loan basis amid a global squeeze on credit.
   Japan’s central bank also injected an additional 1.5 trillion yen ($14.2b) into the Tokyo money market.
   Euro gains against the dollar were capped Wednesday after downbeat news from Germany, which is the biggest economy in the eurozone.
   German business confidence dropped for the fourth straight month in September, a key index showed, as the country’s economy braced for fallout from the international financial crisis.
   The monthly business climate index calculated by Munich-based economic research institute Ifo fell to 92.9 points in September from 94.8 points in the previous month.
   ‘September’s fall in the German Ifo index brings further evidence that economic activity is slowing sharply,’ said Jennifer McKeown, European economist at the Capital Economics consultancy in London.
   In London morning trade Wednesday, the euro changed hands at 1.4663 dollars against 1.4657 late Tuesday, at 155.87 yen (154.64), 0.7902 pounds (0.7910) and 1.5966 Swiss francs (1.5907).
   The dollar stood at 106.11 yen (105.49) and 1.0872 Swiss francs (1.0851).
   The pound was at 1.8585 dollars (1.8527).
   On the London Bullion Market, the price of gold fell to 889.63 dollars an ounce from 899 dollars late Tuesday.

Oil prices climbed almost two dollars on Wednesday, continuing a roller-coaster ride, as the market awaited data on the health of US energy inventories.
   New York’s main contract, light sweet crude for November delivery, jumped 1.84 dollars to 108.45 dollars a barrel.
   Brent North Sea crude for November gained 1.52 dollars to 104.62 dollars.
   Prices ‘were trading higher on expectations the weekly fuel inventories report ... will show sharp falls in fuel stocks, which overshadowed concerns over weaker demand amid slowing economies,’ said Sucden analyst Nimit Khamar.
   The US government will publish its stockpiles data at 1430 GMT. Oil prices tumbled almost three dollars Tuesday on profit-taking, a day after New York crude had registered its biggest ever one-day price jump.
   New York’s October contract soared a record 16.37 dollars on Monday to close at 120.92 dollars after climbing as high as 130 dollars.

Transaction
   Popular Life Insurance
   AN Md Nasimuddin Mollah, one of the directors of the company, has reported his intention to sell 3,000 shares out of his total holdings of 13,000 shares of the company at prevailing market price through the stock exchange within next 30 working days.
   
   AGM
   Apex Spinning
   The company has further informed that its 17th annual general meeting will be held on October 16 at 9:00am at the National Shooting Federation at Gulshan in Dhaka.
   
   Apex Foods
   The company has further informed that its 29th AGM will be held on October 16 at 11:30 am at the National Shooting Federation at Gulshan in Dhaka.
   
   Response to DSE query
   Meghna Petroleum
   In response to a DSE query, the Company has informed that there is no undisclosed price sensitive information of the company for recent unusual price hike.
   
   Jamuna Oil
   In response to a DSE query, the company has informed that there is no undisclosed price sensitive information of the company for recent unusual price hike.
   Source: DSE

United Airways flies to Kolkata
The United Airways has launched its international passenger flight on the Dhaka- Kolkata route on Wednesday. A 37-seat Dash 8-100 Canadian aircraft, equipped with the latest aviation technologies and navigation equipment, took off from Zia International Airport in the afternoon, said a statement of the airline. Chairman and managing director of the United Airways Capt Tasbirul Ahmed Chowdhury formally inaugurated the international flight operation. Directors of the airline and its senior officials attended the flight inauguration. Initially, the United Airways would operate one passenger flight everyday on the Dhaka-Kolkata route and the flight will begin at 3:20pm from Dhaka, the statement added. The one way fare, including taxes, has been fixed at Tk 7009 and return fare at Tk 13314. The airline is offering a free ticket for a passenger who will buy two tickets to travel to and from Kolkata The United Airways recently was designated by the Civil Aviation Authority of Bangladesh to operate a passenger and cargo services on international routes. The airline has plan to start flights on the Chittagong-Kolkata, Dhaka-Kathmandu routes. The airline is currently operating domestic flights from Dhaka to Chittagong, Jessore, Sylhet arid Cox’s Bazar and it will start Dhaka-Barisal flights on September 28.
— New Age