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Dhaka stocks witnessed in past week a bullish trend boosted by strong participation of investors before a nine-day closure starting on Friday.
   Market operators said the market saw buying spree from institutional and retail investors as they took position before the closure of the bourse.
   Trading at the Dhaka Stock Exchange will resume on October 5 after the nine-day vacation due to Shab-e-Qadr and Eid-ul-Fitr as well as weekly holidays.
   The DSE general index gained 128.28 points, or 4.52 per cent, to close at 2966.82, while its blue chips index, DSE20, advanced by 82.43 points, or 3.46 per cent, to finish at 2466.11.
   Market capitalisation at the DSE rose to Tk 1,03,955 crore, its highest ever mark, on Thursday surpassing its previous high of Tk 1,02,758 crore on Wednesday. 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 on the back of the First Security Bank Limited debut.
   At the previous week’s closing, market capitalisation was at Tk 99,101 crore.
   Out of 289 issues, 153 advanced, 80 declined and 13 remained unchanged, while 43 were not traded in the week.
   The daily average turnover at the DSE climbed to Tk 420 crore from the previous week’s Tk 322 crore. In last week, total turnover at the bourse increased by 30.30 per cent to Tk 2,098 crore from the previous week’s Tk 1,611 crore.
   The Titas Gas Transmission and Distribution Company topped the turnover leaders for the eighth straight week in a total transaction of Tk 146 crore, which was 6.96 per cent of the week’s total market turnover at the prime bourse.
   Beximco Pharmaceuticals, ACI Ltd, Beximco Limited, Grameen Two Mutual Fund, Aims 2nd Mutual Fund, ICB AMCL Second NRB Mutual Fund, Summit Power, LankaBangla Finance and Square Pharmaceuticals were the rest of the top 10 turnover leaders.
   In the week, Glaxo SmithKline was the top gainer posting a 60.02 per cent rise in its share price, while Agni Systems was the worst loser with a 16.93 per cent fall.
   Of the total turnover, ‘A’ category issues accounted for 81.31 per cent, while ‘B’ category issues shared 0.47 per cent, ‘N’ category 15.27 per cent and ‘Z’ category 2.95 per cent.

Some foreign port operators are in the race to handle the newly built New-Mooring container terminal in the Chittagong port while few local firms, linked with shipping business or otherwise, were also trying to take control of the operation of the lucrative terminal, port officials said.
   Port operators from Malaysia, Singapore, United Arab Emirates, Denmark, Hong Kong and Pakistan have already sent their delegations to visit the container terminal.
   The delegation members also held talks with the officials of the port evincing their interests to operate the container terminal, port officials said.
   Foreign port operators and local firms started their move after the port authority floated international tender recently for pre-qualification of the bidders for the container terminal.
   ‘We are getting more queries  from foreign port operators interested to be involved in operation of  the container terminal,’ said a senior official of  the port.
   ‘Local agents of some overseas firms are also active for pre-qualification,’ he said.
   The pre-qualification bids will end on October 22.
   ‘We want to encourage efficient foreign port operators for handling the terminal to gear up our port activities as well as to ensure technology transfer,’ he added.
   Some local agents were trying to tie up with foreign port operators under a joint venture to take control of the operations of the terminal built at a cost of Tk 500 crore to handle 500,000 containers annually.
   A Chinese construction firm, China Harbour Limited built the 1,000 metre long NCT   having five berths to allow five container vessels to enter at a time, port officials said. The Chinese firm started the construction works in February, 2005 and completed it early last year.
   Continuous growth of container traffic prompted the port authority to take up the project in 1995 for building the terminal at New-Mooring site beside the main port with its own fund, port sources said.
   Chittagong port annually handles over 1,500 vessels that carry both import and export goods, port sources said.

Regulators and politicians were locked in talks over the future of troubled lender Bradford & Bingley on Saturday, raising the prospect that a second British bank could be nationalised.
   B&B shares tumbled to a record low on Friday and the cost of insuring its debt jumped, prompting regulators to step up efforts to find potential white knights for the bank, hit by the credit crunch and Britain’s sliding housing market.
   The Financial Services Authority and Treasury officials were meeting over the weekend to discuss rescue options, two people familiar with the matter said.
   ‘The Treasury, the FSA and the Bank of England are working closely with Bradford & Bingley to consider the implications for their business of the recent financial turmoil,’ a Treasury spokesman said.
   A Treasury source said further details of the discussions were expected to be announced before markets open on Monday.
   There are contingency plans,’ the source said.
   Major banks were last week sounded out about rescuing the lender, but none were keen to take on its lending book at a time of weakening house prices, industry sources have said.
   One option is to arrange a ‘lifeboat rescue,’ where all the major lenders would take a share of B&B’s mortgage book to help shore up confidence in the financial system.
   Britain’s top five banks — HSBC, Royal Bank of Scotland, Barclays, Lloyds TSB and HBOS — and Abbey’s Spanish owner Santander already own about 30 per cent of B&B between them after they stepped in to help save a rights issue that flopped in June.
   But a reluctance among rivals for a rescue deal has increased the prospect the lender could be nationalised and merged with Northern Rock, the bank that was taken over in February after the government failed to find a rescuer.
   Saturday’s Daily Telegraph, quoting unnamed sources, said B&B would have to be nationalized in the coming days.
   The financial crisis and weakening economy have heaped pressure on British Prime Minister Gordon Brown, whose party lags the opposition Conservatives in the opinion polls.
   Conservative leader David Cameron called on Saturday for legislation to give greater protection to savings. ‘We also need to give the Bank of England greater powers to step in and save failing banks,’ he told reporters.
   Finance minister Alistair Darling is expected to be closely involved in the talks. He has a range of powers to use for any bank in trouble, including bringing it into public ownership or transferring it to another commercial bank.
   B&B’s shares fell to an all-time low of 16.5 pence on Friday and ended at 20 pence, valuing it at under 300 million pounds ($551.5m), as fears about its future mounted.
   The concerns have raised the cost for B&B to raise funds in wholesale markets, although B&B said it is fully funded into next year and has one of the strongest core equity Tier 1 ratios of any UK bank.
   ‘We do not comment on speculation in such a febrile environment,’ a spokesman for B&B said on Saturday.
   The FSA declined comment.
   There is concern that borrowers of B&B’s higher risk mortgages, including a buy-to-let and self-certification loans, will default at a faster rate than average mortgages and burn through the equity on its balance sheet.
   The worries about its health will also hamper a strategic plan unveiled by new Chief Executive Richard Pym, which aims to make the bank more reliant on retail deposits.
   Savers are guaranteed that the first 35,000 pounds of any deposits are protected.

The Bangladesh Bank has taken a go-slow strategy to pursue commercial banks in reducing the much-talked-about spread between the banks’ deposit and lending rates considering the present high rate of inflation.
   ‘The interest spread is gradually declining, but very marginally,’ a senior central bank official told the news agency. ‘It came down to around 0.25 per cent this quarter (July-September).’
   At the end of June this year, apparently the second quarter since the central bank was out to reduce the spread, the spread stood at 5.34 per cent from 5.74 per cent in March.
   Replying to a question, the official said the central bank’s ‘moralsuation’ efforts have slowed down by now due to the high inflation rate that made it difficult for the bankers to reduce the rate of interest on loans.
   ‘We’ll take a fresh initiative as soon as the inflation rate reduces a bit,’ he added.
   The inflation rate (point-to-point) was about 11 per cent in July this year while it was 10 per cent on 12-month average basis. In June, the inflation (point-to-point) was just over 10 per cent and on the basis of 12-month average it was just below the 10 per cent level.
   The Bangladesh Bank had taken initiative late last year to reduce the interest rate spread below 5 per cent, following an instruction from chief adviser Fakhruddin Ahmed, to stimulate economic activities and growth through providing low-cost bank financing.
   It held talks with the bankers several times to convince them for reducing the spread through reducing the lending rates.
   The banks, however, reduced the spread slightly reducing the lending rates and raising the deposit rates, according to the Bangladesh Bank latest figures.
   At the end of June this year, the average lending rates dropped by 0.36 percentage points to 12.29 per cent from 12.65 per cent in March while the average deposit rates rose 0.4 percentage points to 6.95 per cent from 6.91 per cent in March.

The country must reconsolidate its traditional labour markets including that of Saudi Arabia and other oil rich Gulf nation as they are still the important destinations for Bangladeshi nationals while new destinations may have risky elements, said BAIRA president Ghulam Mostafa.
   The top official of the Bangladesh Association of International Recruiting Agencies suggested building a knowledge-based skilled manpower, shift in government policy towards economic diplomacy and revamping the recruitment process of the manpower ministry to cope with the global migration regime.
   Mostafa, who is involved in the manpower export process since BAIRA’s advent in the mid-70’s, also felt that if coordinated approach is taken, remittance can help the country become a middle income one within next five to seven years.
   Focusing on the check and balance issue of traditional labour market and new destination, especially in the Eastern European countries, he said traditional labour market, home of most of the Bangladeshi workers, is still important for the country despite recent instability in some gulf nations, including Saudi Arabia and Kuwait.
   He said, ‘So far, we have send some 56 lakh Bangladeshi across the globe and most of them stay in the Gulf nations and some South East Asian countries. On the other hand, new market has some risk factors as they are yet to be consolidated.’
   ‘For this, we have to reconsolidate our earlier destinations and move for newer ones,’ Mostafa argued.
   Touching on the issue of major market for Bangladeshi workers, Mostafa said the country’s manpower export started back in 1976 focusing Middle Eastern and Gulf nations. And until mid-90’s, apart from the oil-rich Gulf nation, Bangladeshi nationals workers worked in Malaysia, Singapore and South Korea Brunei.
   ‘In recent times, BAIRA members have started exploring market in European countries that include Romania, Russia as well as Canada and the United States,’ he added.
   The BAIRA president said to cope with the changing scenario of overseas job market, the recruiting agents in recent years send skilled workers rather than unskilled workforce.
   He said, ‘To deal with the construction boom in the UAE in past two years, recruiting agents sent some four lakh workers there and more than 90 per cent of them are skilled work force.’
   ‘We don’t have four lakh in our construction sector. Then, question may arise how we can manage to send that number of Bangladeshi workers to the UAE. Recruiting agents are investing an amount of their earning for skill development of the workers they send. So far, some 100 technical and vocational training centres have been set up by BAIRA members.’
   ‘These centres provide a huge scope for sending such a number of skilled workers and undoubtedly it is a good sign,’ explained Mostafa.
   In 2007, some 8 lakh 32 thousand Bangladeshi were employed in various destinations across the globe while the government’s sole recruiting agency BOESL send only 500 people for overseas job.
   The BAIRA president, however, said he had a concern whether such rosy picture of our manpower export would keep going in the days ahead.
   Touching on the recent incidents in Kuwait, Malaysia and Bahrain, he said apart from the rise in the quality and quantity of Bangladeshi workers, their complaints, low wage being one of them, are also on the rise and their utter frustration ultimately led to violent protests.
   Mostafa said the restless attitude of Bangladeshi workers is also exposed in the foreign soil. However, the workers earlier had a name for being hard working and loyal.
   Ultimately, the employers, the government of that country and local citizen increasingly become annoyed with them.
   The Bangladeshi government must have short, mid- and long-term strategies for expanding the overseas job market, maintaining strong monitoring on the existing ones.
   Being critical of the expatriates’ welfare and overseas employment ministry, the top representative of recruiting agents said the ministry is very much negative in its mindset and its unfriendly attitude towards the recruiting agents cannot be explained.
   ‘Had we got the least support, the figure of manpower export last year would touch the mark of 10 lakh,’ Mostafa claimed.
   Mostafa said migrant workers contributed some Tk 45,000 crore to the country and the government allocated only Tk 20 crore for the sector in the national budget.
   ‘It [allocation of budget] is undoubtedly government’s negative attitude to the sector,’ he argued.
   But more allocation is needed for the development of the sector, including more training centres at the upazila level with trained instructors, language teachers giving special focus on English, Arabic, French and Spanish language.
   ‘If we can do so, we are sure to create a knowledge-based educated workforce to match with any place in the world,’ he opined.
   Mustafa argued that neither the government nor the recruiting agents have adequate preparation to face the challenge of global migration regime in the days ahead.
   He said, ‘The government must stress economic diplomacy rather than the political diplomacy. They must train diplomats on migration and each mission must be given target of migration on the priority basis. And the mission should be instructed to get information on respective country’s immigration policy, its demographic pattern, manpower export process. After collecting all these data, the missions should send back these to the government and the government should disseminate these data to the recruiting agents through BAIRA.’
   ‘Only then we can work in a coordinated manner for improving our status in the global manpower market’, he concluded.

US lending standards before the global credit crisis were ‘ridiculous’, and the world can learn from China’s more cautious system as it considers financial reforms, the top Chinese bank regulator said Saturday.
   Beijing curbed mortgage lending in 2003 and 2006 to keep debt manageable amid a real estate boom, while American regulators responded to a similar situation by letting credit grow, said Liu Mingkang, chairman of the Chinese Banking Regulatory Commission.
   ‘When US regulators were reducing the down payment to zero, or they created so-called `reverse mortgages,’ we thought that was ridiculous,’ Liu said at the World Economic Forum in this eastern Chinese city. He said debt in the United States and elsewhere rose to ‘dangerous and indefensible’ levels.
   Liu’s comments were unusually pointed criticism of US financial regulation for a Chinese official. They added to suggestions by countries that are under US pressure to liberalise their financial markets that Washington’s model might not be ideal.
   China has based its reforms on the United States but has moved gradually. It has kept its financial markets isolated from global capital flows, prompting complaints by its trading partners.
   As China made changes, Liu said, ‘a lot of the time, we learned that what we had learned from our teacher the day before was wrong.’
   China’s state-owned banks have avoided the turmoil roiling Western markets. Chinese banks hold bonds from failed Wall Street house Lehman Brothers, but they are a tiny fraction of their vast assets.
   Liu compared Washington’s proposed $700b plan to revive credit markets to fast food and said the world needed to look at longer-term solutions.
   ‘Fast food is convenient. This $700b package must ease the concerns and build up confidence. But if you only take this, it doesn’t agree with your stomach. You should think about Chinese slow cooking and slow food,’ he said, prompting laughter from his audience.
   Liu called for governments to create international standards and regulatory systems for globalised financial markets. He said Beijing has signed information-exchange agreements on financial regulation with 32 other countries since the turmoil began.
   Liu pointed to China’s experience with real estate and the collapse of a stock market boom.
   As stock prices soared, banks were ordered to make sure customers were not using loans or credit cards to finance speculation. As a result, Liu said, even though stock prices have plummeted 63 per cent since the October peak, banks have suffered no rise in loan defaults.
   ‘We Chinese can share our own experiences with all the market practitioners,’ Liu said. ‘Maybe our experience cannot be applicable to developed markets fully. But still, I think it might be useful and helpful to those in emerging markets.’
   The crisis is likely to increase the influence of China and other emerging economies in the world financial system, though Wall Street will retain its leading role, said Chinese and foreign businesspeople at the conference, the Chinese leg of the forum based in Davos, Switzerland.
   ‘I believe this kind of regional financial strength will play a bigger and more important role,’ said Jiang Jianqing, chairman of state-owned Industrial & Commercial Bank of China Ltd., the world’s biggest commercial lender by market capitalisation.
   ‘Right now the market is very unitary,’ with U.S. bonds dominating global holdings, Jiang said. ‘This kind of a unitary, over-centralized market is something we need to change.’ Still, he said, Wall Street’s ‘dominance will continue.’
   The European Union trade commissioner, Peter Mandelson, defended the global capital markets structure, warning that drastic change might hurt prosperity.
   ‘The capital market system, fundamentally, is not flawed,’ Mandelson said. ‘We are not looking for some alternative, and I hope that people in the emerging markets, in China for example, are not looking for an alternative to properly functioning capital markets.’
   The crisis is likely to reduce resistance in the West to investments by government funds as companies urgently seek capital, said Thomas Enders, CEO of the European aircraft producer Airbus Industrie.
   Critics have questioned the possible political motives of state-run funds and an EU official warned last year they might face restrictions if they fail to disclose more information about their goals and tactics.
   ‘I would dare to predict that, yes, one of the big changes we will see is greater acceptance of sovereign wealth funds,’ Enders said.

As depositors lost confidence in Washington Mutual Inc, and began emptying their accounts, regulators abandoned hopes of saving the largest US savings bank and conducted a secret auction.
   ‘It was a full-time effort the last several weeks to do everything possible to keep the institution alive,’ said Washington Mutual’s regulator on Friday, a day after it was seized then sold in the biggest US bank failure ever.
   Office of Thrift Supervision director John Reich told reporters that the bank’s liquidity was being monitored daily.
   But in a span of nine days leading up to its failure, customers withdrew about $16.7b in deposits forcing US officials to sell Washington Mutual out of receivership for just $1.9b to JPMorgan Chase & Co.
   It was a sad end for the 119-year-old institution headquartered in Seattle but ended well for regulators and the public, costing nothing to the US fund that insures most bank accounts up to $100,000.
   Washington Mutual had been one of the lenders hardest hit by the US housing bust and credit crisis, and had suffered from soaring mortgage losses.
   In February its regulatory rating slipped to a 3 from a 2 on a scale that goes down to 5. That was not enough to place it on the Federal Deposit Insurance Corp’s troubled bank list, but it was a portent of things to come.
   As home prices continued to slide, WaMu’s mortgage losses mounted.
   It announced September 8 it was ousting Kerry Killinger as chief executive and disclosed it had been placed under special regulatory supervision requiring improved risk management.
   Investors speculated that WaMu was looking to sell itself with reports that JPMorgan, Citigroup Inc, Wells Fargo & Co and some European banks were interested.
   On September 18, WaMu’s rating slipped to a 4 and it was placed on the FDIC’s watch list, a fact kept secret at the time to prevent a self-fulfilling run on the bank. A 4 rating reflects financial, operational or managerial weaknesses that threaten a bank’s financial viability.
   A day earlier, Texas-based private equity firm TPG said it was waiving rights under its $1.35b investment in WaMu that could have blocked the bank’s acquisition.
   But in hindsight, the time for a private sale had come and gone. By September 24, WaMu’s deposits had plunged 33 per cent to $129b from $188b at the end of June.
   FDIC chairman Sheila Bair told reporters on Thursday that after an open process to find a buyer failed, the agency turned to its secretive auction process in which bidders place their offers on a secured web site.

In France, president Nicolas Sarkozy says the death knell has rung for freewheeling, US-style capitalism. German’s finance minister calls it downright ‘dangerous.’ Even the leader of more Wall Street-friendly Britain says financiers need closer watching, maybe on a global scale.
   What Europeans call, often with a hint of derision, the ‘Anglo-Saxon’ model of capitalism — with less rules, less government and, for years, more growth — is now being called fatally flawed as the financial crisis strengthens advocates of tighter regulation of banks and financial markets in Europe.
   It’s a political shift that could recalibrate the economic direction of Europe as it braces and tries to survive the financial aftershocks from the earthquake that has rocked and destroyed financial institutions across the Atlantic.
   The crisis has put new momentum behind measures to be unveiled by the European Commission on Oct. 1 that include plans to strengthen rules on the capital that banks must hold back and the way credit rating agencies are overseen. Other measures being pushed by some European leaders in response to the crisis include bans on short selling of securities and tighter controls on executive compensation. The European Parliament called this week for tighter controls on hedge funds and private equity investors, an idea so far rejected by top EU officials.
   Sarkozy, initially quiet on the crisis, in now proving among the most outspoken critics of the bankers and lenders who led Wall Street to disaster. He says they must punished, at least financially.
   On the issue of executive pay, made even more of a hot-button topic by Wall Street’s turmoil, he’s given business leaders in France until the end of the year to agree to more ‘acceptable practices’ or said he’ll do so through parliament — which his party controls.
   ‘The idea of the all-powerful market, unconstrained by any rule or political intervention, is mad. The idea that markets are always right is mad,’ Sarkozy said in a stinging speech Thursday, sounding more like a leftist on a soap box than the conservative he professes to be.
   The financial industry, he thundered, has ‘perverted the fundamentals of capitalism.’
   After years of enduring calls from economists and corporate executives to free up their economies with a more hands-off, Anglo-Saxon style of governance, Europe’s leaders have leapt at the opportunity provided by the U.S. financial meltdown to vaunt the merits of continental Europe’s more interventionist traditions. There’s been some quiet gloating in Europe, combined with real fear that the U.S. turmoil will freeze growth, push unemployment back up and make it tougher for nations and households alike to make ends meet.
   German Chancellor Angela Merkel said last week that the United States had been irresponsible to let major banking and credit institutions operate with too little government oversight.
   Merkel pointedly recalled that she tried to win support for greater transparency and regulation on international markets at the G-8 summit of world leaders in Heiligendamm, Germany, last year but that governments including that of President Bush did not heed her warnings.
   ‘In the beginning, there was no chance without people saying: “Let the markets get on with it, we don’t need more transparency, and everything is working with rating agencies,”’ Merkel said.
   ‘Now we have moved on — because America, and Britain too, are saying: “Yes, we need more transparency. Yes, we need better standards for rating agencies.”’
   Merkel’s finance minister, Peer Steinbrueck, went even further on Thursday, when he criticized what he called an ‘Anglo-Saxon’ attitude in the U.S. and Britain that encouraged risky lending and investment practices because of ‘an exaggerated fixation on returns.’
   ‘The argument used by these “laissez-faire” purveyors was as simple as it was dangerous,’ he told German lawmakers.
   German government spokesman Ulrich Wilhelm said Germany considered itself ‘vindicated,’ and said that in addition to ongoing efforts to ensure better liquidity and risk management, leading industrial nations should consider whether more action is needed.
   Even British Prime Minister Gordon Brown, long considered a safe pair of hands when he ran the British treasury but now overseeing an economy tumbling toward recession, is playing the ‘told-you-so’ card.
   Speaking on the BBC, Brown called for more international cooperation in supervising the financial industry and reform of international institutions such as the International Monetary Fund and the World Bank.
   ‘This set of events is making people realize that some of the things that we proposed years ago, but we couldn’t get consensus on, need to be done,’ he said.

US congressional leaders are back in talks Saturday to cobble a massive financial sector rescue deal as the White House called for urgent action and a new bank failure added to the gloom.
   Senate Democratic majority leader Harry Reid vowed Congress would stay in session, and not adjourn ahead of the November 4 elections, until the deal was done.
   Democrats were upbeat after their eighth straight day of negotiations, with Speaker Nancy Pelosi saying they would get a draft deal ‘that will be signed by the president and we will be working through the weekend to achieve that end.’
   And the chair of the Senate banking committee, Barney Frank, also said he was ‘hopeful,’ adding: ‘It’s a very important bill. It’s got to be crafted very carefully.’
   The news helped to rally Wall Street shares at the end of a bruising week, although most other markets saw steep losses as the talks had earlier appeared to be at an impasse.
   Despite repeated pledges from lawmakers and president George W Bush that a deal was in the offing, there were still signs of discord among rebel Republicans, backing an alternative package to the plan proposed by treasury secretary Henry Paulson.
   Frank confirmed: ‘We had two negotiating sessions involving the Senate Democrats, the House Democrats and the Senate Republicans at which the House Republicans declined to participate.’
   But conservative House Republicans were opposed to the plan on ideological grounds, calling for what they referred to as a ‘free-market alternative.’
   ‘You were being asked to choose between financial meltdown on the one hand and taxpayer bankruptcy and the road to socialism on the other and you were told do it in 24 hours,’ Republican Representative Jeb Hensarling of Texas was quoted by The New York Times as complaining.
   With lawmakers rolling up their sleeves to get back to work after days of drama and confusion, hopes were high that an accord could be forged by the time markets open on Monday.
   Bush voiced confidence to visiting British prime minister Gordon Brown.
   ‘I told him the plan is big enough to make a difference and I believe it is going to be passed,’ Bush said as they met in the Oval Office.
   With the world’s largest economy in a tailspin, other governments are nervously watching the protracted talks, concerned their economies could fall victim to any contagion.
   Brown assured Bush of wide global support for the rescue plan, stressing: ‘Britain supports the financial plan — and whatever the details of it, it’s the right thing to do to take us through these difficult circumstances.’
   The prime minister noted that G7 finance ministers would discuss the crisis when they meet October 9, and the International Monetary Fund would take up the situation when it meets the following day.
   Reid vowed lawmakers would work through the weekend to try to put something in place before markets open again on Monday.
   ‘We’re going to get this done and stay in session as long as it takes to get it done. We’ll work with the president, modify his plan to make it better for taxpayers and homeowners,’ he said.
   He blamed the Republicans for delaying tactics.
   A deal was almost there Thursday ‘and then guess who came to town,’ Reid told reporters after Republican White House hopeful John McCain had dashed back to Washington, putting his campaign on hold to take part in crisis talks.
   ‘The insertion of presidential politics has not been helpful. It’s been harmful,’ the Democrat said.
   Senior Republicans, however, defended McCain’s role as they presented a rival package designed to take the burden off taxpayers and put it back on private investors.
   ‘I think McCain’s role has been entirely constructive. He’s had suggestions. We’re taking these into account and we are going forward,’ said Senate minority leader Mitch McConnell.
   McCain and Democrat Barack Obama clashed in a debate late Friday over how to repair the country’s ailing economy, but both dodged questions over whether they will back the Wall Street bailout plan.
   The new Republican plan proposes that the government set up an expanded insurance system financed by banks to rescue individual home mortgages, so that taxpayers do not have to fund the bailout.

Wachovia Corp has begun early merger talks with several suitors, according to published reports, all of which spurned Washington Mutual Inc prior to that lender’s seizure by the US government.
   Wachovia, the sixth-largest US bank by assets, began preliminary talks with Citigroup Inc, the New York Times said on Friday, citing people briefed on the matter.
   Meanwhile, the Wall Street Journal said Wachovia has entered preliminary merger talks with Citigroup, Banco Santander SA and Wells Fargo & Co, citing a person familiar with the situation. Bank executives are expected to be in New York this weekend for talks, it said.
   Wachovia spokeswoman Christy Phillips-Brown declined to comment on merger discussions. The other banks either declined to comment or were not immediately available.
   The market value of Wachovia was about $21.6b as of Friday’s market close, Reuters data show. Citigroup’s was $109.7b, Santander’s was $99.8b and Wells Fargo’s was $123.4b, the data show.
   Talks would underscore the pressure that Charlotte, North Carolina-based Wachovia, the sixth-largest US bank by assets, has faced from investors, largely because of a $122b portfolio of option adjustable-rate mortgages that chief executive Robert Steel classifies as ‘distressed.’
   The bank suffered a record $9.11b loss in the second quarter and some analysts have said it may need more capital after raising $8.05b in April.
   Wachovia came under further pressure on Friday as investors worried about the fate of a $700b government bailout of the financial sector.
   JPMorgan Chase & Co’s decision to write down $31b of loans it took over when it bought much of Washington Mutual Inc banking operations on Thursday for $1.9b may foreshadow greater losses at Wachovia, analysts said.
   Earlier this month, Wachovia began merger talks with Morgan Stanley following the bankruptcy of Lehman Brothers Holdings Inc, but people familiar with the matter said earlier this week that those talks had ended.
   For Citigroup, combining the two companies would create by far the largest US retail brokerage, with close to 30,000 brokers before attrition. Citigroup would also get the major US retail banking presence it has long lacked, and make it a strong rival to Bank of America, JPMorgan and Wells Fargo.
   The bank also raised well over $40b of capital in late 2007 and early 2008, leaving chief executive Vikram Pandit perhaps better positioned for acquisitions than rivals that failed to raise enough and could not do so now.
   Any Wachovia merger talks would come amid uncertainty of the fate of the industry bailout proposed by treasury secretary Henry Paulson. The bank would be a prime candidate for help, depending on the types and amounts of securities the government would accept.
   Wachovia shares closed down 27 per cent at $10 on the New York Stock Exchange. They were trading around $8.50 when the Times report appeared just before the market closed. The shares fell to $8.95 in after-hours trading.

Churning out the world’s cheapest car was meant to transform this dusty rural township in eastern India, but these days all the movement around the factory site is in the wrong direction.
   Trucks are transporting machinery and equipment away from the plant owned by India’s Tata Motors from which the keenly awaited ‘Nano’ was supposed to roll out as early as next month.
   ‘The Tatas trained several hundred youths to work in the plant. We hoped there’d be new jobs once the Nano started production,’ said economics graduate Subrata Das, 28.
   If Tata Motors officially decides to pull out of Singur, as it has threatened, the township will become ‘a place of lost hopes,’ Das said as trucks carrying equipment thundered past.
   Construction work on the 90-per cent-complete plant in Marxist-ruled West Bengal was halted after weeks of angry demonstrations, seen as a symbol of the clashing interests of India’s farmers and industry.
   Farmers and their supporters say they were forced by the government to give up their land for a pittance so the plant could be built, leading to the violent protests.
   Tata Motors has yet to say when it might decide the final fate of the nearly complete factory, into which it has already poured 350 million dollars. But a company source said: ‘It is a decision we will make very soon.’
   A meeting was slated to be held on Sunday in state capital Kolkata between Tata Group chairman Ratan Tata and West Bengal chief minister Buddhadeb Bhattacharjee to discuss the plant’s future.
   However, state industry minister Nirupama Sen held out little hope for the plant.
   ‘The possibility of the Nano rolling out from the Singur plant is remote,’ he said.
   ‘We’ve been stunned by the news the Nano may never roll out from here,’ said secondary school teacher Prabir Roy as some of his students held up a torn exercise book page showing a picture of a small car stuck in mud.
   Tata has said Singur, on the outskirts of Kolkata, cannot serve as a production site for the Nano, slated to sell for 100,000 rupees (2,150 dollars), ‘unless there is a congenial atmosphere.’
   That possibility appeared even more remote after attackers last Monday beat up two security guards at the plant, the latest in a string of violent incidents at the site by protesters.
   The demonstrations have been spearheaded by Mamata Banerjee, the fiery leader of West Bengal’s opposition party, the Trinamool Congress.
   The government has called the objections to the plant a ‘rejection of progress.’
   Tata says it will launch the four-door vehicle, dubbed ‘the People’s Car’, as scheduled in the final quarter of the calendar year and hopes to roll it out as close as possible to the big-spending festival season in October.

The Japanese government late Friday ordered firms that import dairy products from China to test them for melamine, a toxic chemical at the centre of a growing milk scandal.
   Jiji Press said the order, which includes firms which use the products in processed food, came after melamine was found in four items made by one of Japan’s leading food makers, which had earlier issued a recall as a precaution.
   The Ministry of Health, Labor and Welfare order requires importers to test their goods at registered inspection institutions. Violators could face up to one year in prison or fines of up to one million yen (9,400 dollars), Jiji reported.
   Japan’s Marudai Food Co recalled more than 300,000 buns and other products last week fearing contamination by tainted Chinese milk.
   A public health centre in Osaka Prefecture said four of Marudai’s products were tainted by the chemical: Gratin Crepe Corn ready meals, Cream Panda and Matcha Azuki Milk Man sweet buns for consumers and Cream Panda buns for commercial use, Kyodo News reported.

Indian outsourcing provider HCL Technologies Ltd has offered more than 800 million dollars for Britain’s Axon Group, opening a bidding war for the information technology company.
   New Delhi-based HCL, controlled by tycoon Shiv Nadar, offered late Friday to purchase Axon for 441.1 million pounds (815 million dollars).
   The offer trumped a bid by Indian rival Infosys Technologies, ranked the country’s second-largest software services provider by sales.
   The all-cash offer at 650 pence a share was 8.3 per cent more than the 600-pence offer by Infosys, based in India’s high-tech city of Bangalore.
   HCL chief executive Vineet Nayar called the takeover bid a ‘transformational opportunity’ to become a ‘significant player’ in the business services arena.
   The company is India’s fifth-largest outsourcing provider.
   If either Indian company wins Axon, it would mark the biggest ever foreign takeover by an Indian software firm.
   Infosys announced in late August it had clinched a deal to purchase Axon for 407 million pounds.
   But Axon welcomed the rival bid, saying in a statement it showed ‘HCL has recognised the quality of the Axon business.’
   Infosys, meanwhile, said in a statement it was ‘considering its position’ and urged Axon shareholders ‘to take no action at this time.’
   It promised a further announcement ‘in due course.’
   Axon employs 2,000 employees and gets 55 per cent of its sales from Europe and 40 per cent from the US.
   Indian outsourcing firms have been seeking to reduce their reliance on the US market, which represents 60 per cent of the sector’s revenues, in the wake of the US-led credit crunch.
   HCL said the bid offered a 43 per cent premium to the average closing price of 455.7 pence for Axon shares for the three months ended on August 22, the day before Infosys made its Axon bid.
   Axon’s shares had been climbing steadily since the Infosys bid in expectation of a bigger offer.
   Axon shares closed up 7.6 per cent or 48 pence at 682 pence in London trading, suggesting investors expected a higher counter-offer. There has also been market speculation about interest in Axon from Japanese companies.

Commodity traders from across the globe largely took their cues this week from movement over an emergency US bailout plan.
   Oil: Oil prices rose as dealers tracked the progress in US Congress of a bailout package that would see the US government buy toxic mortgage-related assets from the battered financial sector.
   Oil traders are on tenterhooks over the progress in Congress of the rescue package because the United States is the world’s biggest consumer of energy.
   ‘Over the past week, oil prices have been extremely volatile,’ said Dresdner Kleinwort analyst Gareth Lewis-Davies.
   The price of New York crude oil saw the biggest one-day gain in history on Monday, before paring gains late in the week as US rescue deal talks stalled and stoked fears of weak global energy demand.
   New York’s October contract surged by an astonishing 16.37 dollars to close at 120.92 dollars a barrel on Monday after striking 130 dollars during intra-day trade.
   The historic price gain was partly driven by hopes that a 700-billion-dollar rescue package from the US government would save the world’s largest economy from collapse, thus bolstering demand for energy.
   At the same time, the October contract was boosted by hectic technical trades as it expired as players covered positions to avoid losing money on bets the price would fall.
   Crude futures then slid Tuesday on profit-taking, and fell further on Wednesday after the US government reported a sharp drop in consumption, raising fresh demand worries.
   On Thursday, prices jumped by more than two dollars on signs the massive US government bailout was nearing approval.
   The market trimmed gains at the end of the week as US talks reached a stalemate.
   ‘Crude oil futures were down heavily (on Friday) as markets remained on edge as the US government’s 700-billion-dollar bailout plan remained uncertain,’ said Sucden analyst Michael Davies.
   Other pundits were upbeat that a deal would soon be announced.
   ‘Talks are set to resume today (Friday) and a deal remains likely to be reached,’ said Barclays Capital analyst David Woo.
   By Friday, New York’s main oil futures contract, light sweet crude for delivery in November, was at 105.61 dollars per barrel, up from 101.33 dollars a week earlier.
   Brent North Sea crude for November jumped to 102.60 dollars per barrel from 97.91 dollars.
   Precious Metals: The price of gold continued to benefit from its status as a haven in times of economic turmoil.
   The previous week, the precious metal had enjoyed its biggest one-day gain in almost three decades as equity markets plunged in response to the global financial crisis.
   The yellow metal, which is used in jewellery, dentistry and electronics, remains below its record high of 1,032.70 dollars an ounce, reached on March 17 — four days after it had breached 1,000 dollars for the first time.
   ‘The destiny of the plan in the US Congress remains the decisive factor for the price movements of gold,’ said Dresdner Kleinwort analyst Peter Fertig.
   On the London Bullion Market, gold advanced to 902 dollars an ounce at Friday’s late fixing from 869 dollars a week earlier.
   Silver gained to 13.18 dollars an ounce from 12.93 dollars.
   On the London Platinum and Palladium Market, platinum fell to 1,140 dollars an ounce at the late fixing on Friday from 1,155 dollars a week earlier.
   Palladium rose to 235 dollars an ounce from 233 dollars.
   Base Metals: Base metals prices experienced mixed fortunes.
   ‘Choppy moves continue to characterise the base metals markets with sentiment remaining linked to movements in the wider financial markets,’ said analysts at Barclays Capital in a research note to clients.
   By Friday, copper for delivery in three months fell to 6,825 dollars per tonne on the London Metal Exchange from 7,080 dollars a week earlier.
   Three-month aluminium dropped to 2,514 dollars per tonne from 2,592 dollars.
   Three-month lead increased to 1,985 dollars per tonne from 1,840 dollars.
   Three-month zinc rallied to 1,810 dollars per tonne from 1,735 dollars.
   Three-month tin jumped to 17,951 dollars per tonne from 17,199 dollars.
   Three-month nickel advanced to 17,198 dollars per tonne from 16,598 dollars.
   Coffee: Coffee prices jumped amid a lack of deals.
   ‘London volume was painfully thin,’ said Sucden analyst Ralph Hawes.
   By Friday on LIFFE, London’s futures exchange, Robusta for November delivery rose to 2,128 dollars per tonne from 2,092 dollars a week earlier.
   On the New York Board of Trade (NYBOT), Arabica for December delivery climbed to 135.80 US cents per pound from 133.05 cents.
   Cocoa: Cocoa prices climbed, boosted by supply disruption in major exporter Ivory Coast.
   ‘Cocoa exports from the main ports in Ivory Coast remain blocked as a strike by workers from the Cocoa and Coffee Bourse rumbles into a third week,’ commented the Public Ledger.
   By Friday on LIFFE, the price of cocoa for December gained to 1,536 pounds per tonne from 1,522 pounds a week earlier.
   On the NYBOT, the December cocoa contract rallied to 2,756 dollars per tonne from 2,690 dollars.
   Sugar: Sugar prices rose strongly on both sides of the Atlantic.
   ‘A strong outlook for sugar market (supply and demand) fundamentals continues to provide support to prices,’ said analysts at Barclays Capital.
   By Friday on LIFFE, the price per tonne of white sugar for December delivery rallied to 404 pounds from 377.70 pounds the previous week.
   On NYBOT, the price of unrefined sugar for March delivery increased to 14.59 US cents per pound from 13.60 cents.
   Grains and Soya: Grains and soya prices rebounded.
   By Friday on the Chicago Board of Trade, maize for December delivery was up to 5.48 dollars per bushel
   from 5.42 dollars the previous week.
   November-dated soyabean meal — used in animal feed — increased to 11.67 dollars from 11.43 dollars.
   Wheat for December delivery climbed to 7.22 dollars per bushel from 7.18 dollars.
   Rubber: Rubber prices slid further amid political uncertainty in Malaysia, while dealers forecast more losses next week.
   On Friday, the Malaysian Rubber Board’s benchmark SMR20 fell to 280.30 US cents per kilo from 282.40 US cents per kilo a week ago.

British mortgage lender Bradford & Bingley, which has been hit by a housing downturn and weakness in the wider economy, may be nationalised, newspapers reported Saturday.
   The Daily Telegraph and Daily Mail newspapers both reported, citing unnamed sources, that government ministers were considering a nationalisation of the troubled bank, little more than a year after the collapse of Northern Rock, which was eventually nationalised earlier this year.
   A spokesman for the bank told the Telegraph, however, that it was ‘fully funded and we are one of the strongest capitalised banks in the UK.’
   ‘As far as the febrile speculation goes, we do not comment on market rumours.’ Bradford & Bingley announced on Thursday that it was cutting 370 jobs, mainly at its mortgage processing centre near London, in a bid to save 15 million pounds (18.9 million euros, $27.8m).
   A newspaper report last weekend said that Britain’s Financial Services Authority was in secret negotiations to facilitate the bank’s acquisition.
   Bradford & Bingley last month revealed net losses of 17.2 million pounds (21.8 million euros, $31.5m) for the first half of 2008, attributing them to ‘turbulence in the banking and housing sectors.’

Alitalia eyes
relaunch in weeks after union deal
Alitalia aims to be reborn as a slimmed down airline in just weeks, a government official said Saturday, after once-reluctant pilots’ unions agreed to a rescue plan by a group of Italian investors. The breakthrough deal with pilots followed overnight, government-brokered talks and was a major victory for Prime Minister Silvio Berlusconi, who was elected in April promising to save Alitalia from buckling under massive debt and losses. Remaining hold-out unions at the state-controlled carrier, representing flight attendants, were due to reconvene for talks Monday and Italian consortium CAI called for the support of all the unions. But government and union officials suggested the rescue plan already had labor backing support to go ahead. ‘With the agreement by the pilots, I’m confident (the new Alitalia) will be able to lift-off,’ Infrastructure Minister Altero Matteoli told Italian television. Raffaele Bonanni from Italy’s second biggest union, the CISL, was more explicit, saying: ‘If they all sign, fine. But enough’s enough. With what happened last night, it’s over.’ Under the rescue plan, CAI would snap up the most profitable pieces of Alitalia and relaunch with a fresh cash injection.
— Reuters