FBCCI submits new stimulus
proposals today
Staff Correspondent
When the government is planning a review of stimulus, announced last week, the Federation of Bangladesh Chamber of Commerce and Industry has readied a Comprehensive Economic Stimulus Package.
The CESP, prepared after discussions with different export sub-sectors, has suggested a fund, titled Financial Crisis Mitigation Fund from the government and interim subsidies to pay interest of bank loans of the effected industries.
The apex trade body proposes a sizable Bangladesh Power Fund to inject as capital for much required power generation facilities and infrastructure development fund by utilising the idle deposit in the life insurance sector.
It also proposed at least Tk 500 core Workers Protection Fund to be utilised in further training and supports to retrenched workers locally and backed from overseas.
‘The government needs to be prepared well to help create new jobs in export industries,’ said the FBCCI president Annisul Huq.
After a meeting with different export sector representatives at the FBCCI conference room, Annis was briefing journalists on his comprehensive package. The package will be submitted to the finance ministry on (today) Sunday.
Annis’s fresh package stipules that the government keeps ready a large fund as block allocation and parts of this will be injected into the effected industries, which modules of disbursement will be finalise through negotiation with stakeholders.
He also demanded lowering of the lending rate to 11 per cent and special arrangement of loans at 6 per cent interest for effected industries.
About power fund, the FBCCI president said government should invite deposit from local, NRBs and foreigners asking no disclosures about the source of money.
Annis suggested that government and industries should start seeking supports of the rich countries, multilateral economic forums and lending agencies, which he said, were committed to help industries in LDCs.
‘As an LDC, Bangladesh government and industries should go to G-20, WTO, WB, ADB, and IMF to have a share of global bailout packages,’ Annis suggested. ‘It is also the right time for Bangladesh government and exporters association to realise duty-free access into US market.’
Annis urged the government to expand development projects, and arrange soft loans for building homes in semi-urban and rural areas, which he say, would contribute in employment generation.
Blistering heat pushes up
soft drink sales
Shakhawat Hossain
The sales of soft drink jumped by nearly 50 per cent in the local market due to increase in demand of the item in wake of blistering hot spells sweeping across the country, the operators said.
Local soft drinks bottlers like Pepsi, RC Cola, Mojo and Coke, which supply around 45,00,000 litres on average in a month are now supplying 67,50,000 litres with the beginning of the current summer season, they said.
‘Prevailing hot spell in absence of rain has pushed the demand up of soft drink by 50 per cent,’ said RC Cola marketing manager Akhtaruzzaman.
RC Cola, a subsidiary of the local conglomerate Partex Group is supplying additional 400,000 litre of soft drink for the last two months.
The average monthly sale of the company, second behind market leader Pepsi with an around 20 per cent market share, is around 900,000 litre, said Akhtaruzzaman.
The summer season that begins in March and lasts until June is the most prolific months for the business of the soft drink bottlers who witness at least 20 per cent jump in sales over the years.
‘But the current summer is exceptional one in recent years,’ he added.
Mercury has already gone up to 41 degree Celsius in two regions — Khulna and Rajshahi — while the temperature in the others regions including Dhaka have poised to touch 40 degree.
Prevailing moderate to severe heat wave over Khulna division and the regions of Dhaka, Tangail, Faridpur, Rajshahi and Ishwardi may continue, according to forecast of the local metrological department on April 25.
Capital Dhaka has already recorded the summer’s highest temperature on last Friday with no end in sight of the blistering heat wave that has been baking the country since the beginning of the current summer season.
Transcom Beverage, which markets the Pepsi and the 7-up also witnessed surge in sales due to scorching summer heat, said its market development manager Arif Hossain.
He said the sales of his company products have increased substantially helping the company to consolidate its market position as leader.
Transcom Beverage has already obtained majority of the market share, around 30 per cent since last one year, with the help of successful marketing of giant 7-up pet bottle amounting at 2.25 litres, he added.
The internal problem on marketing the Coke and the Sprite by Abdul Monem Ltd and Tabani Beverage has sent once the market leader to fifth position in the local market, industry sources said.
Akij Food and Beverage, a new player at the market, is in third position with at least 15 per cent of the market share, they said.
Others small players like Euro, Virgin, Pran sharing rest of the shares.
New venture goes wrong
Agence France-Presse . New York
Two Bangladesh-born US residents have found themselves on the wrong side to celebrate Barack Obama’s election victory.
They changed the name of their fast food shop Royal Fried Chicken to ‘Obama Fried Chicken’ in Booklyn, New York, in the hope that it would be a great way to celebrate a black man’s victory.
But they were wrong. Within days they were accused of racism and embroiled in a row that encapsulates, in miniature, the nation’s pride in a black president and the fact, 100 days into Obama’s administration, that racial tensions remain raw. The manager of the shop, Mohammad Jabbar, says the decision to change was simple: ‘We love the president.’ What he didn’t realise, until African American protestors turned up this month, was that fried chicken has long been code for slavery-era stereotypes about black diets.
Hotel Anytime launched
Staff Correspondent
A new international hotel, Anytime, became operational in the country aiming at assisting the travellers in touring any country of the world.
The launching of the hotel was announced at a press conference held at National Press Club on Saturday.
The hotel will offer exclusive facilities to both local and foreign tourists to travel home and abroad including visa processing, hotel booking from one star to five stars, transport, air ticket, travel books and any information related to touring.
Three organizations—Ikra Media Centre of Dhaka, Meenhar of Chittagong and Cosmica Call Centre of Rajshahi—initiated the activities of the hotel with three branches in those districts of the country.
Dhaka to protect labour rights
Bangladesh Sangbad Sangstha . Washington
Bangladesh remains committed to the full protection of labour rights while it has taken a number of steps in this direction and the government will also continue to do everything possible in this regard.
This was stated by commerce secretary Feroz Ahmed during the Hearing on GSP Facilities for Bangladesh at the US Trade Representative Office in Washington DC here on Saturday.
In his presentation, Feroz Ahmed highlighted the progress made by Bangladesh.
He informed the Panel of the steps taken in the EPZs, garment and Shrimp sectors to improve compliance with the labour standards and to ensure the welfare of the workers in those sectors of the economy.
Ahmed said that the newly elected government of prime minister Sheikh Hasina is committed to upholding the rights and privileges of the workers as recognized in labour laws and other relevant laws.
The secretary urged the United States trade representative to terminate the GSP review proceedings and continue to accord GSP facilities to Bangladesh to help in her pursuit of growth and development as well as in her fight against poverty.
The US side duly noted the Bangladesh government’s responsiveness to improve workers rights.
In his remarks Jeffrey Vogt, Global Economic specialist of AFL-CIO recognised the progress made in recent years in EPZ and shrimp sector.
He, however, said that more needed to be done in the garment sector to improve workers rights situation. He also suggested aggressive reforms to protect the overall labour rights in Bangladesh.
Bangladesh ambassador to the United States M Humayun Kabir, executive chairman of BEPZA Brigadier General Jamil Ahmed Khan, chairman of Bangladesh Shrimp and Fish Foundation Syed Mahmudul Huq, president of Bangladesh Jatiyo Sramik League Abdul Matin Master, among others, participated in the Hearing on Bangladesh’s behalf.
The Hearing panel was consisted of Ms Meredith Joy Sandler, Executive Director, GSP programme and chairman, GSP sub-committee, Ms Anne Zollner, Division Chief, US Department of Labour and other US officials. Ms Meredith Joy Sandler chaired the Hearing.
The Hearing at the US Trade Representative office, held in response to a petition by AFL-CIO, is part of the US Government’s review process to determine the eligibility of GSP facilities to a number of countries including Bangladesh.
The Hearing attempted to find the actual progress made on the ground through an interactive session involving high government officials as well as the private sector representatives.
Bangladesh commerce secretary today also held a meeting with Michael J Dalaney, assistant USTR for South and Central Asian Affairs on bilateral issues. The commerce secretary held a separate meeting with Ms Meredith Joy Sandler, executive director, GSP Programme and clarified various points raised at the public hearing.
Bangladesh ambassador to the US M Humayun Kabir was present at these meetings.
Delta Life MD to attend
global conference
Business Desk
The Delta Life Insurance managing director, Das Deba Prashad, has left Dhaka for New York to attend the14th Global Meeting and 7th Capital Market Conference to be held on April 27 to May 1 in New York.
The meeting and the conference will be held on the eve of 30th anniversary of the Women’s World Banking, a news release said.
Das will discuss micro life insurance and micro finance programme carried on by his company Delta Life, also a network member of the WWB.
Leaders of 47 top-performing microfinance institutions from 30 countries will attend the conference, the release added.
ICICI net profit drops 35pc
Reuters/Bdnews24.com . Mumbai
India’s ICICI Bank missed forecasts with a 35.3 per cent fall in quarterly profit on Saturday, hurt by bad debts and slowing loan growth .
New York-listed ICICI said net profit fell to 7.44 billion rupees ($149.4 million) in its fiscal fourth quarter ending in March, from 11.5 billion rupees reported a year ago.
A Reuters poll of analysts had forecast net profit to fall to 7.7 billion rupees.
The bank said its total income in the March quarter fell to 92.03 billion rupees from 103.91 billion rupees a year ago.
ICICI has slowed lending as it tackles a jump in bad loans in its mainstay retail market.
Shares in ICICI, which has a market value of about $9.4 billion, are down 3.5 per cent so far this year, compared with a 17.4 per cent rise for India’s benchmark and a 2.5 per cent rise in the sector index.
The stock closed 2.1 per cent higher at 432.50 rupees on Friday in a Mumbai market that firmed 1.7 per cent.
More ‘green shoots’ keep
Wall Street upbeat
Agence France-Presse . New York
Amid growing signs of an easing of the economic crisis, Wall Street has managed to keep a mostly sunny outlook even though a six-week rally came to a halt.
After a heavy week of earnings reports prompted some turbulence, the market will focus on economic news and the outlook for the auto sector with two of the Big Three manufacturers on the ropes.
In the week to Friday, the Dow Jones Industrial Average of blue chips fell 0.68 per cent and the Standard & Poor’s 500 broad-market index dipped 0.39 per cent.
This ended a six-week rally that analysts said had been the best since 1938.
The tech-heavy Nasdaq however extended its gains to a seventh week, rising 1.27 per cent to 1,694.29, its best level since last November.
‘Increasingly we are seeing greater numbers of economists saying that improvement in the economy will be clearly evident late this year,’ said Gregory Drahuschak at Janney Montgomery Scott.
‘The market will not wait for the data.’
Investors have latched on to both corporate and economic news that, while far from upbeat, suggests a bottom may be near if not already here.
Benjamin Reitzes at BMO Capital Markets said after data showed a 0.6 per cent drop in new home sales that ‘this is the latest housing market indicator to show signs of a potential bottom.’
‘Financial markets, to varying degrees, have begun to price in economic recovery,’ said Julian Callow at Barclays Capital.
‘A key issue for the weeks and months ahead will be whether economic indicators improve in a way that validates this.’
‘The rally has been driven by bullish sentiments rather than by bullish fundamentals,’ said Ed Yardeni at Yardeni Research
‘That’s fine as long as the fundamentals that drive earnings start to actually improve, and not just worsen at a slower pace.’
Nouriel Roubini, a New York University economist, calls the rally a ‘dead-cat bounce.’
‘In the last two years, the stock market has predicted six out of the last zero economic recoveries — that is, six bear market rallies that eventually fizzled and led to new lows,’ he said.
Roubini said growth will falter ‘and earnings of corporations and financial institutions will not rebound as fast as the consensus predicts,’ dampening any recovery. The expectation is that the economy contracted at a 4.9 per cent pace, which is dismal but not as bad as the 6.3 per cent drop in the fourth quarter of 2008.
Also on tap will be earnings from General Motors, which like rival Chrysler is struggling to get enough federal government help to avert bankruptcy.
One key Friday will be the monthly sales for the US auto market, which could signal whether consumers are buying and credit is flowing.
Kent Engelke, strategist at Capitol Securities, said the market is especially fearful of a ripple effect of a potential bankruptcy at General Motors.
He added that officials considering new aid to the auto sector may fail to understand the impact of a GM failure that could be as big as that of Lehman Brothers, which he said ‘was the catalyst for the worst financial crisis since the Depression that has cost trillions (of dollars) and millions of jobs.’
The yield on the 10-year US Treasury bond increased to 2.99 per cent against 2.93 per cent a week earlier and that on the 30-year bond rose to 3.87 per cent from 3.78 percent. Bond yields and prices move in opposite directions.
Dollar hit as improved sentiment
curbs safety trade
Agence France-Presse . New York
The dollar traded mainly lower Friday as a brighter mood on global financial markets sharpened risk appetite and limited moves into safe haven currencies.
Sterling sank however on news that the British economy plunged deeper into recession in the first quarter of 2009.
At 2100 GMT, the euro traded up at 1.3242 dollars from 1.3144 dollars late in New York on Thursday. Against the Japanese currency, the dollar eased to 97.13 yen from 97.95 yen on Thursday.
With the currencies sensitive to signs of economic turmoil, Boris Schlossberg at Global Forex Trading said the dollar fell on better-than-anticipated reports on new US home sales and durable manufactured goods orders.
The dollar has been seen as a safe haven from market turbulence, so the improved data hurt the greenback.
Durable order fell 0.8 per cent amid expectations for a 1.5 per cent drop but Schlossberg said a key measurement of future activity, capital spending rose for the second consecutive month, ‘suggesting of a possible turnaround in the not too distant future.’
New US home sales fell 0.6 per cent in March from an upwardly revised level in February, another sign of a potential improvement.
‘Although the figures remain in the contracting territory, signs of a bottoming in the economy started to emerge,’ said Schlossberg.
‘Markets took the news as a positive indication of a future turnaround in the US economy as risk appetite returned, advancing equities and putting pressure on the dollar.’
Germany’s key Ifo business confidence index on Friday offered a small ray of hope for the recession-struck eurozone powerhouse.
After quizzing 7,000 German companies in manufacturing, construction, wholesaling and retail, the Ifo institute said its closely-watched indicator rose to 83.7 points in April, from an all-time low of 82.2 points in March.
Economists see the Ifo index as a key leading indicator to gauge the future health of the economy. It has been falling steadily — with occasional blips — since June 2008 as sentiment among corporations plummets.
ASK Trade inks deal to
arrange tradeshow
Business Desk
ASK Trade and Exhibitions, an India based company, recently signed a memorandum of understanding with Bangladesh Engineering Industry Owners’ Association to organise the first ever Bangladesh Engineering and Industrial Tradeshow 2010.
The tradeshow will be held on January 7 -10, next year at the Bangladesh-China Friendship Conference Centre, Dhaka, a news release said.
‘We are in the process of finalising two more international events to be held in next January 2010, which will be announced soon,’ said K Nanda Gopal, CEO of ASK, on the eve of signing the memo.
Doha round re-launch awaits US
Reuters . Washington
A renewed push to finish long-running world trade talks cannot begin until the United States is ready to engage, the head of the World Trade Organisation said on Friday.
Completing the Doha round of talks would help pull the global economy out of recession by unleashing new trade flows and ‘help restore confidence at this moment of crisis,’ Pascal Lamy, director general of the WTO, said at the Peterson Institute for International Economics in Washington.
‘I cannot restart a political process without the US being ready,’ Lamy said.
The Obama administration’s position on the Doha round of trade talks ‘is emerging little by little’ and is positive but the process has been slow, Lamy said.
There is much goodwill among negotiators in Geneva for the new US administration but patience is not infinite, he said.
US farm, manufacturing and services groups strongly object to a set of proposed texts for concluding the round put forward in December. They have urged the Obama administration to refuse to restart talks on the basis of those texts.
The talks, officially known as the Doha Development Agenda, were launched more than seven years ago in the capital of Qatar with the goal of helping poor countries prosper through trade.
Many developing countries, who make up of the majority of the WTO’s 153 members, are anxious for the talks to conclude.
They stand to benefit if rich countries make long-awaited farm subsidy cuts and open their manufacturing and agricultural markets to more imports from developing nations, Lamy said.
US Trade representative Ron Kirk said on Thursday said the US remains committed to a successful end of the round but needs a better idea of what it will ‘get’ in exchange for what it gives up.
Lamy, in Washington for the spring meetings of the International Monetary Fund and the World Bank, is expected to meet Kirk.
Lamy argued that US business already would benefit more from the round than it publicly admits.
If the US wants developing countries to clarify what new market openings they will make, it would help for Washington to identify which goods it will exclude from a pledge rich countries made in 2005 not to impose duties or quota on imports from the poorest countries, Lamy said.
Developing countries fear the US will use its insistence on excluding 3 per cent of products from the duty-free, quota-free pledge to maintain barriers in areas of greatest interest to them, such as textiles and sugar.
New version of Windows
comes Thursday
Reuters/Bdnews24.com . New York
Microsoft Corp said on Friday a version of its long awaited Windows 7 operating system will be made available from next week.
The version, known as a ‘release candidate’, or RC, essentially means the world’s largest software company is in the final stages of completing the operating system, the successor to the unpopular Windows Vista.
Microsoft said the RC will be available for download by program developers and IT professionals subscribing to the MSDN and TechNet networks on April 30 and available more broadly on May 5.
The company has still not said when the finished version would begin to be installed on PCs or available to buy in shops, but the company’s chief financial officer said on Thursday it could be as early as July.
That would allow Microsoft to capitalize on back-to-school sales and set it up for a strong holiday shopping season.
Microsoft’s operating systems, installed on the vast majority of the world’s PCs, are still the backbone of the company, providing more than half of its $4.4 billion profit last quarter.
Vista, launched to the public in 2007, was incompatible with some low-power machines and perceived by many to be too complicated. Rival Apple Inc ridiculed Microsoft’s problems with the system in a series of popular TV ads.
IMF, WB meet as signs
of recovery seen
Agence France-Presse . Washington
Top IMF and World Bank officials hold annual meetings on Saturday and Sunday in the shadow of the worst global slump since the 1930s but with perhaps the first signs of recovery peeping through.
A banking crisis that started in the United States in mid 2007 has spread like wildfire to push the world deep into a recession which the IMF said earlier this week would see the global economy contract 1.3 per cent this year.
The IMF forecast marked a dramatic downgrade of previous estimates and set the tone for the meetings of the top steering committees of the 185-member International Monetary Fund and its sister institution the World Bank.
But on Friday, the Group of Seven major economies said the worst might finally be over — although the outlook remained clouded and difficult.
‘Recent data suggest that the pace of decline in our economies has slowed and some signs of stabilisation are emerging,’ a G7 statement said.
‘Economic activity should begin to recover later this year amid a continued weak outlook and downside risks persist.’
The G7 — Britain, Canada, France, Germany, Italy, Japan and the US said they were ‘committed to act together to restore jobs and growth and to prevent a crisis of this magnitude from occurring again.’
US treasury secretary Timothy Geithner, the G7 host, said ‘without underestimating the challenges we still face, there are signs that the pace of deterioration in economic activity and trade flows has eased.’
He too cautioned against any simple optimism that the worst global slump since the 1930s would be over quickly.
‘We are right to be somewhat encouraged but we would be wrong to conclude that we are close to emerging from the darkness that descended on the global economy (in September),’ he said in a statement.
A subsequent meeting of the Group of 20, which includes the G7 and developing countries such as Brazil, China, India and Russia, ended without a statement.
The financial crisis was sparked by a credit boom based on the US sub-prime or higher risk home loan market which collapsed in mid 2007 as weaker borrowers could not keep up payments when the economy began to slow.
Many banks were heavily exposed and in order to limit their losses, cut lending, causing the economy to slow.
An already bad situation turned much worse with the collapse of giant US investment bank Lehman Brothers in September, tightening the screw in a global credit crunch which has plunged the world economy into recession.
The more positive G7 tone follows data showing that the downturn is easing but many officials remain reluctant to give the all-clear, warning that more bad news is to come which could blight any ‘green shoots’ of recovery.
Others also warn that recovery or not, the human cost of the crisis is very high, still rising and should not be forgotten.
On Friday, a World Bank/IMF report said the crisis means up to 90 million more people will remain trapped in extreme poverty this year while the chronically hungry could top one billion.
‘Our belief is that the crisis is far from over,’ IMF chief Dominique Strauss-Kahn warned Thursday.
‘The beginning of the recovery has to come from the US and will come from the United States,’ Strauss-Kahn said, calling for greater efforts to restore the banking system to health.
‘You never recover before you complete the cleaning up of the balance sheet of the financial sector ... The recovery in 2010 relies a lot upon the effort that still has to be made in this domain so, I’m again asking on the eve of these meetings for more effort to be made in this direction.’
The IMF estimates that the US, European and Japanese banks will have acknowledged only a third of their losses on soured assets between mid 2007 and 2010, with the total losses put at some four trillion dollars.
China bans foreign couriers
in local market
Agence France-Presse . Beijing
China’s parliament has revised the nation’s postal law in a move that will ban foreign delivery companies from handling domestic express mail, state press reported Saturday.
The revised law was passed by the National’s People’s Congress on Friday despite opposition from express delivery giants including DHL, FedEx, TNT and UPS, the China Daily reported.
The newly amended law that goes into effect on October 1 bans foreign companies from delivering express letters within China, the newspaper said.
But foreign delivery companies with operations in China will be permitted to deliver express packages domestically, as well as express letters internationally, it said. Legislators insisted the new law complied with China’s World Trade Organisation commitments, it said.
The Conference of Asia Pacific Express Carriers, which represents the four global giants and lobbied against the amendment, called for an ‘open and level playing field’ in the sector.
Ford sees light at
end of tunnel
Agence France-Presse . New York
Ford Motor Co said Friday it remains on a slow road to recovery by 2011 without help from the government as it posted a quarterly loss of 1.4 billion dollars that was not as bad as feared.
The automaker, the only member of the Detroit Big Three that has not received emergency government aid, said it has enough cash to keep its plans on track.
‘Our results in the first quarter reflected the extremely difficult business environment and weak demand for autos around the world,’ said Ford president and chief executive Alan Mulally.
‘Despite the challenges, Ford made strong progress on our transformation plan by gaining share with strong new products, slowing operating-related cash outflows, reducing outstanding debt, lowering our structural costs and reaching new agreements with the UAW (United Auto Workers).’
Ford said it ‘remains on track to meet or beat its financial targets based on current planning assumptions, including the target for its overall and North American automotive pre-tax results to be breakeven or better in 2011, excluding special items.’
Ford said it ended the first quarter with 21.3 billion dollars in cash and reiterated that ‘based on current planning assumptions it does not expect to seek a bridge loan from the US government.’
Shares in Ford leapt 11.4 per cent to close at 5.00 dollars.
‘Although Ford isn’t earning any money, it is earning the market’s faith in its turnaround effort, as the company maintains it is on track to meet or beat its financial targets and that it does not expect to seek a bridge loan from the US government,’ said Patrick O’Hare, analyst at Briefing.com.
‘For now, Ford seems to be benefiting from the view that it is the best of a bad lot.’
For all of 2008, Ford posted a whopping loss of 14.57 billion dollars, as the auto market collapsed in the latter part of the year.
Ford’s loss for the past quarter translated to 75 cents per share, not as bad as feared on Wall Street, where analysts were expecting a deficit of 1.23 dollars per share.
First quarter revenue, excluding special items, was 24.8 billion, down sharply from 39.2 billion a year due to lower sales volume and unfavorable exchange rates.
Analysts praised Ford for cutting its costs and reducing so-called cash burn.
Himanshu Patel at JPMorgan Securities said Ford delivered a ‘solid set of results given the current climate.’
‘We expect a positive reaction, and continue to believe Ford’s recent rally is not unjustified,’ he added.
Ford, which took out a credit line of 23 billion dollars before the credit crunch worsened, has managed to avoid the fate of rivals General Motors and Chrysler, which are near bankruptcy even with US government aid.
‘The financial picture at Ford shows how brilliant the move of new CEO Alan Mulally was when he essentially mortgaged the company,’ said Douglas McIntyre at 24/7 Wall Street. ‘He probably saved the company.’
Ford, which shed its Jaguar and other international nameplates as part of its restructuring, said it has begun ‘discussions with interested parties regarding the sale of Volvo,’ the Swedish-based brand.
Ford said Volvo had an operating loss of 255 million dollars for the first quarter, and that the company would take an ‘impairment charge’ of about 700 million dollars, reflecting the difference between the book value and estimated fair market value of Volvo.
Ford North America reported a pre-tax loss of 637 million dollars, wider than the loss of 45 million a year earlier as revenues fell sharply along with US sales.
Its European operations meanwhile swung to a loss of 550 million dollars, compared with a profit of 739 million a year ago as the economies in Europe worsened.
The Asia Pacific and Africa unit lost 96 million dollars after a profit of one million a year earlier.
Only the South American operations were profitable, earning 63 million dollars, down from 257 million last year.
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