Citi Bank NA, a multinational bank, has opposed a government decision to offload 40 per cent share of new companies in the capital market saying it may cause imbalance in the market, official source said.
   Managing director of Citigroup Global Markets Bangladesh Private Limited Mamun Rashid has recently sent a letter to the finance secretary, Mohammad Tareque, requesting him to reconsider the decision about offloading private companies’ shares.
   After a meeting with a delegation of Chittagong Stock Exchange at finance ministry office last week, finance minister AMA Muhith told reporters that the finance ministry would consider the proposals of browses in the interest of the markets.
   Earlier, the finance ministry at a meeting on November 5 made a series of decisions tightening capital markets. The decisions included that new companies will have to offer shares equivalent to 40 per cent of their paid up capital.
   ‘We have humbly requested the ministry that it should reconsider its decision to change the minimum free float requirement for an IPO to 40 per cent of paid up capital and keep the existing regulations that are currently in price, including the ‘Book building Guideline’ newly introduced by Security Exchange and Commission ’ Citi Bank NA letter said.
   It also said the issues of ‘loss of control’ and dilution for the original sponsors, market will also face issues of absorption capacity if large companies are required to list 40 per cent of their paid up capital and create a large barrier to entry for the right names.
   ‘This may cause further imbalance in the supply demand situation in Bangladesh markets and may cause the development of a pricing bubble due to excess capital circulating within inadequate supply of available listed securities’ it also said.
   Besides, Citi Bank NA letter also said Bangladeshi retail investors, a key driving force behind capital market growth, would benefit from a broader supply of viable investment options. Direct listing would also facilitate quicker access to capital markets, benefiting both investors and corporate. We also believe that price discovery through an accelerated book building in the direct listing process would ensure fair pricing’ it also said.
   Regarding entry of mutual funds Citi Bank NA also said that the entry of mutual funds would also generate additional liquidity in the market, which finance ministry may be kindly aware is a key factor in the continued success and growth of our capital markets, along with the initiatives spearheaded by the ministry.
   In light of the numerous benefits that mutual funds bring to the market, we would like to highlight that the restricted entry of mutual funds in phases would possibly inhibit growth and cap the full potential of country’s growing capital market, depriving retail investors of investment options that offer loss protection, it said.

The senate voted Thursday to raise the ceiling on the government debt to $12.4 trillion, a massive increase over the current limit and a political problem that president Barack Obama has promised to address next year.
   The senate’s rare Christmas Eve vote, 60-39, follows house passage last week and raises the debt ceiling by $290 billion. The vote split mainly down party lines, with democrats voting to raise the limit and republicans voting against doing so. There was one defection on each side, by senators whose seats will be on the ballot next year: GOP Sen George Voinovich of Ohio and democratic Sen Evan Bayh of Indiana. Sen Jim Bunning, R-Ky, did not vote.
   ‘I would not support raising the debt ceiling because congress has not adopted a credible process to restrain spending and eliminate red ink,’ Bayh said a statement after the vote.
   The bill permits the treasury department to issue enough bonds to fund the government’s operations and programs until mid-February. The senate will vote again on the issue Jan 20.
   Obama must sign the measure into law to prevent a market-rattling, first-ever default on US obligations. The government piled up a record $1.4 trillion deficit in 2009 to counter a meltdown in financial markets and help bring the nation out of its worst recession in seven decades.
   The early-morning vote followed the senate’s passage of a landmark bill to overhaul the nation’s health care system. They were the senate’s last votes of the year.
   With the exception of Voinovich, republicans uniformly derided the bill, though they routinely supplied votes for eight previous increases totaling $5.4 trillion under president George W Bush.
   Voinovich, who is retiring, said he voted ‘yes’ after majority leader Harry Reid agreed to consider amendments when the Senate takes up the matter again next month. Bayh told the senate budget committee in November that he would oppose an increase in the limit unless congress commits to a strict new debt-fighting plan.
   Democrats had originally planned to pass an unprecedented increase of almost $2 trillion to
   avoid another vote before next year’s midterm elections.
   But that plan fell apart amid opposition from about a dozen senate democratic moderates, who refuse to support a debt limit increase unless it is accompanied by legislation to establish a new bipartisan task force to come up with a plan to curb the deficit. That idea is opposed by house speaker Nancy Pelosi, D-Calif, and other democratic leaders.
   Pelosi, meanwhile, is supporting demands of moderate house democrats, who are demanding a ‘pay-as-you-go’ budget law aimed at ensuring that new tax cuts or new spending programmes don’t increase deficits in exchange for their votes for the next debt increase.
   The senate is generally opposed to the idea, even though it was the law of the land for more than a decade.
   Battles over those issues and others, such as a vote on a GOP proposal to end the Wall Street bailout programme, are expected to resume during January’s debate.
   Except for Voinovich, republicans — who helped supply votes to increase the debt ceiling twice last year and provided 27 votes for an $850 billion increase two years ago — opposed the legislation. It is required to issue new debt to pay for federal operations and deposit up to $50 billion into the social security trust funds to pay pensions.
   Thursday’s debt limit measure and the larger version looming in January require a supermajority of 60 votes to pass. Democrats control the chamber with 60 votes, which could require all 60 members of the democratic caucus to vote for it, including several members who are politically endangered.
   The current measure is needed as a result of the out-of-control budget deficit, which registered $1.4 trillion for the budget year that ended in September. The current debt ceiling is $12.1 trillion and is set to be reached by Dec 31.

India’s finance minister said tightening credit would not help ease the country’s soaring food price inflation.
   ‘If it is substantially from the supply side and if it is not from the demand side, then simply by tightening credit you are not going to get the desired result,’ Pranab Mukherjee said in an interview with the Economic Times newspaper.
   ‘Therefore a balanced approach needs to be taken,’ he said in the report published on Friday.
   India’s food prices rose nearly 19 per cent annually in mid-December and a central bank deputy said food inflation could drive headline inflation as growth picks up and capacity constraints emerge.
   Mukherjee said he was not certain about the extent to which the monetary policy was influencing food prices.

The government will distribute agriculture input assistance cards among 22 lakh farmers of 10 districts of Khulna region.
   The farmers would be able to collect their subsidy money from banks by using the cards, Jessore regional office of Department of Agricultural Extension sources said.
   They said the government had decided to distribute Tk 1,300 crore as subsidy for diesel and fertiliser across the country to help farmers in the their cultivation.
   Of the amount, Tk 800 crore has been allocated for diesel and Tk 500 crore for fertiliser.
   Under the programme, 22,13,827 farmers have been enlisted in the Khulna region.

Japan’s Toyota Motor Corp is recalling about 43,000 cars in China due to a defect that may cause engine oil to leak, a company spokesman said Friday.
   The recall affects four models, the Lexus ES 350, the Lexus RX 350, the Highlander sports utility vehicle and the Previa minivan, said the spokesman, Yuta Kaga.
   It comes just months after Toyota announced its biggest ever recall in China, affecting about 6,88,000 vehicles, due to a defect in the electric window system.
   Toyota’s reputation for quality has been dented recently by a series of recalls or safety issues, including a fatal accident in California involving an accelerator pedal that jammed under the floor mat.

Energy prices are ending the year on an upswing with large storms, falling supplies, a weak dollar and a slightly better employment picture sending futures higher.
   Crude futures closed above $78 per barrel for the first time in more than a month Thursday in shortened holiday trading as the government reported that unemployment benefit claims from newly laid-off workers fell for the 16th straight week.

The US government has pledged virtually unlimited aid to mortgage finance giants Fannie Mae and Freddie Mac through 2012 to allow the government-sponsored firms to weather any new crisis.
   The announcement Thursday by the US treasury allows the government to postpone an exit strategy for aid to the two firms that underpin trillions of dollars in mortgages and play a key role in the global financial system.
   Officials said they amended the congressionally mandated deadline of December 31 from the firm’s September 2008 rescue.
   The new agreement lifts a collective cap of $400 billion in aid that can be pumped into the firms— $200 billion each—and gives the government unlimited authority to inject funds into Fannie and Freddie if the housing crisis intensifies.
   Although officials said they were not near the limit for aid, the new agreement ‘should leave no uncertainty about the treasury’s commitment to support these firms as they continue to play a vital role in the housing market during the current crisis.’
   A treasury statement said the cap on aid would be raised ‘as necessary to accommodate any cumulative reduction in net worth over the next three years.’
   Earlier Thursday, US officials unveiled multi-million-dollar pay packages for executives at Fannie Mae and Freddie Mac in a new step back from a clampdown on executive compensation.
   Documents filed by the regulator for the two firms showed Fannie Mae chief executive Michael Williams and Freddie Mac chief executive officer Charles Haldeman could each earn up to six million dollars per year, although some of that is deferred or conditioned on the performance of the companies.
   Six other high-level executives at Fannie Mae and four others at Freddie Mac could earn over one million dollars, depending on performance.
   The regulator for the firms, which were seized by the government amid a meltdown in the housing market, said that even with the new pay levels, compensation for the top executives is down 40 per cent from before the firms were placed in government ‘conservatorship.’
   Edward DeMarco, acting director of the Federal Housing Finance Authority, said these firms need competent executives since they play a role in funding three-fourths of all new residential mortgages.
   ‘The enterprises must attract and retain the talent needed to accomplish these objectives,’ he said.
   Fannie and Freddie, which are shareholder-owned, government-chartered firms providing financing for housing, were placed in government conservatorship last year when they appeared near collapse amid a housing market meltdown.
   Together, they underpin some five trillion dollars in mortgages, and their failure could deal another shock to a weakened global financial system.
   Since the takeover, the government has provided $60 billion to Fannie Mae and $51 billion to Freddie Mac to keep them from being insolvent.
   The FHFA said there remain ‘uncertain conditions’ in the housing market that could lead to further losses for Fannie and Freddie.
   Thursday’s announcement by the treasury also said the government would stop purchasing mortgage-backed securities from the two firms as of December 31, saying this effort was ‘no longer critical to financial stability.’
   The treasury said it will have purchased some $220 billion worth of bonds from government-sponsored enterprises.
   The announcement postpones a decision on a longer-term solution for Fannie and Freddie, which play a key role in the global financial system but are operating under government support.
   The treasury statement said the administration of president Barack Obama ‘is in the process of reviewing issues around longer term reform of the federal government’s role in the housing market’ and would offer a preliminary report around in February 2010.
   The statement noted that officials envision ‘a transition to an environment where the private market is able to provide a larger source of mortgage finance.’

Japan approved on Friday a record budget for next year that will inflate the country’s already huge debt by $484 billion, as the prime minister vowed to battle on in the face of a growing scandal and sliding poll ratings.
   With tax revenues sliding since the financial crisis erupted, the government has ditched a key campaign pledge to voters and tapped cash reserves to limit new borrowing at 44.3 trillion yen, a level already worrying bond markets as public debt nears 200 per cent of GDP.
   Prime minister Yukio Hatoyama faces an upper house election next year so some analysts say his coalition may yet be tempted to spend more to prop up the economy, which has only recently emerged from Japan’s worst recession since Second World War.
   Hatoyama, whose Democratic Party ousted its long-dominant conservative rival in August, repeated his determination to stay on the job despite Thursday’s indictment of two former close aides over false political funding records.
   ‘I would like to brace myself, correct what needs to be corrected, and do my best,’ Hatoyama told reporters on Friday, the 101st day of his administration.
   ‘The Japanese people may still think it is hardly possible for me to have not known (about the incident) but I told everything honestly, and I hope they will understand as much as possible.’
   Japanese media, however, said Hatoyama—Japan’s fourth prime minister in three years—might have to quit if voters find his explanations and his leadership weak.
   The democrats took power pledging to put policy-making in the hands of politicians rather than bureaucrats, eradicate wasteful spending, and focus spending on consumers instead of the more business-focused policies of the ousted Liberal Democratic Party.
   But polls show voter support for the government sliding below 50 per cent from initial highs over 70 per cent, as doubts have grown about Hatoyama’s ability to make tough decisions on the economy and diplomacy.
   As well, concern simmers that political mastermind Ichiro Ozawa, a former leader and now the democrats’ No 2 executive, is running the show.
   Caught between campaign pledges to give more cash to consumers to boost growth and the reality of plunging tax revenues, Hatoyama has jettisoned a key pledge to cut petrol taxes.
   Hatoyama has said he would keep another promise to pay child allowances to households regardless of income levels.
   ‘Although cuts in public works spending are planned, they are likely to be more than offset by child allowances. Overall, the budget will likely give a slight positive effect on the economy,’ said Yuichi Kodama, an economist at Meiji Yasuda Life Insurance.
   ‘Rather than keeping campaign pledges, it was more important for the government to reduce its spending as Japan’s fiscal conditions are reaching limits.’
   Finding funds to pay for costly spending programs is expected to become more difficult, since tapping cash from special reserves is only a short-term solution.
   Finance officials said about 10.6 trillion yen in such reserves would be used to balance next year’s 92.3 trillion yen budget.
   The government forecasts economic growth of 1.4 per cent in 2010/11, which would be the first increase in three years, but analysts say policymakers need a plan to achieve sustainable growth.
   Media polls before the indictment of Hatoyama’s aides showed most voters felt that Hatoyama need not resign over the affair, which included the receipt of large amounts of money from his mother, daughter of the founder of tire maker Bridgestone Corp.
   But sagging ratings would undermine the democrats’ chances of winning an upper house election in mid-2010, leaving them dependent on two tiny coalition partners whose conflicting views make policy-making messy. A loss could create a policy deadlock, since the upper chamber can delay bills.
   Hatoyama has long been a critic of political corruption and has said in the past that lawmakers should quit if aides were guilty of misdeeds.
   On Thursday, he left the door open to changing his mind and resigning but said that, for now, he believed quitting would betray voters’ hopes.
   ‘Precisely so,’ said the Nikkei daily in a commentary.
   ‘The question is whether he can demonstrate leadership to carry out policies. What voters have given the prime minister is a moratorium.’

Japan’s Mitsui and Tokyo Gas is buying five power stations in Mexico for more than $1.2 billion from Spain’s Gas Natural, the two companies said Thursday.
   ‘Gas Natural today (Thursday) signed an agreement with the companies Mitsui & Co and Tokyo Gas to sell some of its assets for electricity generation in Mexico,’ Barcelona-based Gas Natural said in a statement.
   The transaction is expected to be completed next year, it said.
   The total value of the assets ‘is around $1.225 billion,’ Gas Natural said, adding that it would receive an additional $240 million from the two companies in the form of debt repayments.
   The assets include five gas-fired power stations and a pipeline company.
   The power plants included in the deal have a total generation capacity of 2,233 megawatts and were bought by Gas Natural in 2007 from France’s EDF. They were then valued at $1.448 billion.
   Mitsui and Tokyo Gas said in a joint statement that the deal would boost Mitsui’s worldwide generating capacity to 5,558 megawatts and make it ‘one of the largest independent power producers in the Mexican power market.’
   As part of the transaction Mitsui will establish an asset management company in Mexico ‘to expand its power business throughout the Americas’ and manage the new electricity generations assets, the statement added.

China announced on Friday that the country’s economy grew by 9.6 per cent in 2008, up from a previously announced figure of nine per cent.
   The latest national economic census found the economy was worth 31.4 trillion yuan in 2008, head of the National Bureau of Statistics Ma Jiantang said at a briefing, or around $4.6 billion based on the current exchange rate. That meant growth was 0.6 per cent points higher than the nine per cent announced in January, Peng Zhilong, director-general of the NBS’ department of national accounts, said at the same news conference.
   The Chinese economy, now the world’s third largest, enjoyed a double-digit increase for five years from 2003 before slowing down last year due to the impact of the global financial crisis.
   Government officials have said the nation aims to achieve eight-per cent growth in 2010, a target set each year since 2005 and always exceeded, as Beijing maintains pro-growth policies to fight the global downturn.

New legislation may have a much more dire effect on credit card lenders’ earnings than analysts had expected, and 2010 could be a brutal year for the companies.
   In perhaps the most serious sign of what is ahead for credit card lenders, Discover Financial Services reported that the yield on its loans for the three months ended Nov 30, a measure of the profitability of its assets, fell by more than half a per centage point from the prior quarter.
   The credit card company cited new legislation as a major reason for the decline. Discover’s shares fell 7 per cent on the news, their biggest one-day decline since July.
   Discover is the fourth-largest credit card network in the United States and the sixth-largest credit card issuer, meaning it is relatively small, but like the canary in a coal mine, it could be an indicator of things to come.
   The legislation in question, known as the CARD act, was signed into law in May. Some of its provisions—for example, requiring credit card issuers to give customers at least three weeks, instead of 15 days, to pay their bills—went into effect in August.
   Another round of changes in February will likely be much harsher for credit card companies. Lenders will not be able to raise interest rates on existing credit card balances unless the account is at least 60 days past due, and they will not be able to charge fees for customers spending more than their limit, unless cardholders agree to the fees.
   The precise impact of these moves on credit card lenders is hard to estimate, but Discover’s most recent results imply that investors may be underestimating the revenue impact, analysts said.
   ‘The card act is really a game changer for the industry,’ Jason Arnold, an analyst at RBC Capital Markets.
   Most credit card lenders’ shares have risen more than the Standard & Poor’s 500 index since the beginning of 2009.
   Shares of the companies are expensive relative to the Standard & Poor’s 500 index. Capital One Financial Corp’s shares trade at 20 times expected 2010 earnings, while Discover’s trade at 21.2 times. The S&P 500 average is 15 times.
   ‘These companies are not what I call high growers,’ said Keith Wirtz, president and chief investment officer of Fifth Third Asset Management.
   ‘I think the market investors are going to rotate in new directions and probably away from these stocks,’ Wirtz added.
   Some companies have been explicit about the expected impact of the new rules.
   JPMorgan Chase & Co estimated its annual card services business’ net income would be reduced between $500 million and $750 million.
   KBW analysts mentioned Capital One among the most adversely impacted credit card lenders, and American Express among the least impacted companies, given its reliance on affluent and corporate customers.
   Capital One said the revenue margin of its credit card business will decline modestly in the fourth quarter.
   Credit card lenders enjoyed hefty profits earlier in the decade, as cheap money ignited a lending boom.
   But the party ended abruptly as the housing slump and the financial crisis sent default rates to record highs.
   ‘The credit card act makes it a little more cloudy in terms of how quickly the rebound is going to be in the profits,’ said Scott Valentin, an analyst at FBR Capital Markets.
   ‘The expectation of a slow decline in unemployment does not help,’ Valentin added. Higher unemployment typically corresponds with higher credit card defaults.
   Keefe, Bruyette & Woods (KBW) analysts said if bankruptcy filings increase another 35 per cent in 2010 after rising a similar amount in 2009, credit card lenders could face more pressure.
   ‘We do not assume significant improvements in credit quality in 2010 and even in 2011,’ KBW analysts wrote in a note to clients.

General Motors Co is pressing ahead with plans to shut down Saab as chances of a deal to sell the Swedish brand to Dutch sports car builder Spyker Cars remain remote, a person familiar with the planning said on Thursday.
   GM has not changed the plans it announced Friday to begin winding down Saab’s operations in January and it has started discussions with other interested parties as part of that process, the person said.
   Spyker Chief Executive Victor Muller told Reuters on Thursday that his company was still in talks with the US automaker about an acquisition of Saab. He said earlier this week that a final outcome would not happen until next week.
   ‘We are still in discussions,’ Muller told Reuters in a text message.
   Separately, Dutch billionaire John de Mol said through his investment company Talpa that he was not involved in backing a possible purchase of Saab.
   ‘Apparently there are parties that like to name someone such as De Mol to—unjustly—strengthen their position in the takeover battle,’ Talpa said in a statement.
   The question of how Spyker would fund an acquisition of Saab is seen as the major hurdle to a deal before the month-end deadline set by GM Chairman and CEO Ed Whitacre for a decision on the fate of the 60-year-old car brand.
   A tentative deal to sell Saab to Swedish supercar maker Koenigsegg collapsed in late November in part because of problems with financing.
   De Mol is the second Dutch billionaire this week who denied an involvement in financing a Saab deal.
   Dutch newspaper De Telegraaf cited Dutch billionaire Marcel Boekhoorn as a backer earlier this week, but he denied his involvement.
   Swedish news website E24 said that board members at Saab had a short conference via telephone with GM representatives in the United States to discuss plans for the closure of Saab.

China’s Geely would barely lay a finger on Ford Motor Co’s Volvo if it succeeds in acquiring the Swedish luxury car brand, the firm’s top executive was quoted by state media as saying on Friday.
   Volvo’s current production, research and development facilities, union agreements and dealer networks will all be left intact, said Li Shufu, the founder and chairman of Zhejiang Geely Holding Group, the parent of Geely Auto.
   ‘If the deal succeeds, nothing will change for Volvo, except the boss turns to Li Shufu,’ Li told the official Xinhua news agency. ‘Volvo and Geely will be two independently-managed brands.’
   Ford Motor Co said on Wednesday it was nearing an agreement to sell its Volvo unit to Geely, China’s largest private automaker, in a deal that underscores China’s arrival as a major force in the global auto industry.
   The value of the deal, which Ford said it expects to sign in the first quarter and close in the second quarter of 2010, has been estimated at $1.8 billion — far short of the $6.45 billion Ford paid for Volvo in 1999.
   Li, 46, said that it had been ‘more complicated’ to negotiate how to handle intellectual property rights than the deal’s price.
   He said the Volvo purchase would help Geely develop new energy vehicles, and that Geely would help Volvo reduce production costs and expand in the Chinese market.
   ‘The new energy-powered vehicle will be the future of the world’s auto industry,’ Li said.
   ‘But based on current investment in research and development, China will be left far behind the pace of developed countries,’ he said in the English-language article.
   China overtook the United States this year as the world’s largest auto market, as sales soared after Beijing rolled out a series of incentives designed to stimulate consumer spending at the height of the global downturn.
   However, there is still a significant technology gap between domestic Chinese automakers and their global rivals, which has led Chinese firms to look overseas for acquisitions of technology and designs as the global auto industry restructures.
   Beijing Automotive Industry Holding, a domestic rival to Geely, said on Wednesday it will launch an aggressive campaign to develop its brand and move up the ladder after buying car designs from General Motors’ (GM.UL) Saab unit.

Japanese and Chinese stocks fell back Friday in subdued trade as investors took profits, with many players in the region away for the Christmas holidays.
   Investors were in a cautious mood despite fresh gains on Wall Street that lifted US stocks to fresh 2009 highs Thursday.
   Tokyo shares declined for the first day in four as investors locked in gains a day after the market hit a three-month high.
   Chinese shares were pressured by concerns of possible policy tightening measures, dealers said.
   Markets in Australia, Hong Kong, India, Indonesia, Malaysia, New Zealand, Singapore and South Korea were closed for a public holiday.
   TOKYO: Down 0.40 per cent. The Tokyo Stock Exchange’s benchmark Nikkei-225 index fell 42.21 points to 10,494.71.
   The latest reports on Asia’s largest economy, showing a rise in the jobless rate and stubborn deflation, injected a note of caution into the market as the year-end approaches.
   Turnover was thin at only about 1.2 billion shares, the lowest level for a full trading day in 2009, with many investors away for year-end holidays.
   ‘The market gained quite sharply recently, so it was time for a break,’ Daiwa Securities SMBC market analyst Yumi Nishimura told Dow Jones Newswires.
   The dollar’s firmness against the yen limited the market’s downside, however, dealers said. A weaker yen raises competitiveness of Japanese products overseas and boosts repatriated earnings.
   ‘Whether the Nikkei can test further upside beyond 10,500 in coming sessions is mostly up to dollar-yen movements,’ said Meiwa Securities senior market analyst Masayoshi Yano.
   SHANGHAI. Down 0.38 per cent. The Shanghai Composite Index, which covers both A and B shares, dropped 12.06 points to 3,141.35 on thin trading volume.
   ‘The shrinking turnover shows investors are cautious and have little interest in trading before market liquidity returns to abundant levels,’ said Li Xianming, an analyst at Ping An Securities.
   Worries are growing that Beijing will take steps next year to cool the Chinese economy, dealers said.
   ‘There are concerns Beijing may take measures early next year, such as raising the reserve requirement ratio to counter inflationary pressure,’ said Capital Securities analyst Jacky Zhang.
   Banks and property developers led the losses. China Merchants Bank fell 1.7 per cent to 16.40 yuan, Industrial and Commercial Bank of China shed 0.39 per cent to 5.14 yuan while China Vanke lost 0.6 per cent to 13.22 yuan.
   However, steel makers rose on hopes for further mergers in the sector after China announced plans to consolidate several iron and steel smelters to create one globally competitive company and two or three domestic leaders.
   Angang Steel rose 1 per cent to 15.10 yuan while Shanxi Taigang Stainless Steel ended up 0.2 per cent at 8.99 yuan.
   TAIPEI: Up 0.11 per cent. The weighted index rose 9.05 points to 7,972.59.
   Profit-taking reduced early gains sparked by Wall Street reaching a 2009 high overnight, dealers said.
   ‘It was no surprise that the pressure pulled the index back to some extent,’ Taiwan International Securities analyst Michael Chiang said, attributing the decline to technical factors.
   In fact, market sentiment has improved after US jobless benefit claims fell to a 15-month low, Chiang said.
   ‘Optimism towards global economic fundamentals is gathering steam. I think the market will continue to go higher after digesting the pressure around 8,000 points,’ he said.
   BANGKOK: Up 0.44 per cent. The Stock Exchange of Thailand composite index rose 3.20 points to close at 730.41
   Trading was sluggish with most market participants absent, said Sukit Udomsirikul, an analyst at Siam City Securities.
   Among market blue chips coal producer Banpu rose 4 baht to close at 576 baht, Bangkok Bank was up 0.50 baht to 116.50 baht and Kasikornbank edged up 0.25 baht to 85 baht.

Wall Street prepares to close out 2009 on an upbeat note with the market holding hefty gains from a stunning comeback following a disastrous start to the year.
   The stock market enters the final week of trading at its highs for the year on the heels of a stunning nine-month rally that lifted the main indexes from their lowest levels in over a decade.
   The final four trading days of the year in the upcoming holiday-shortened week are expected to see light activity and a favourable mood, with the market enjoying a so-called Santa Claus rally.
   In the holiday week ending Thursday, the Dow Jones Industrial Average climbed 1.85 per cent to 10,520.10, its best level in nearly 15 months.
   The tech-rich Nasdaq composite meanwhile rallied 3.35 per cent to 2285.69 and the broad Standard and Poor’s 500 index advanced 2.18 per cent to 1,126.48.
   Fred Dickson, market strategist at DA Davidson & Co, said the mood on Wall Street should remain positive through the coming week.
   ‘Trading activity should pick up next week as investors make last minute portfolio changes like tax-loss sales and portfolio rebalancing,’ he said.
   ‘We still expect to see the minor Santa Claus rally continue through New Year’s Eve.’
   Some said the upbeat mood was helped by a steepening of the yield curve—or a rise in the difference between short-term and long-term bond rates. Analysts say this is a positive sign because it encourages lending and risk taking.
   The opposite phenomenon, an inverted yield curve, suggested recession was coming in 2007.
   The yield curve is ‘a good barometer of the health of the US economy,’ said Chris Gaffney at EverBank World Markets, who noted that the difference between the short and long bonds rose to a record high in the past week.
   With the year almost over, the Dow blue-chip index is sitting on 2009 gains of 19.87 per cent, with the Nasdaq up 44.94 per cent and S&P index ahead by 24.71 per cent.
   Although the market remains well below highs hit in 2007 and is stuck near levels from a decade ago, many traders are satisfied with a positive year.
   ‘The year now ending will be remembered more for what didn’t happen, than what did,’ said Peter Buchanan, economist at CIBC World Markets.
   Buchanan said the year opened ‘with talk of financial and economic Armageddon,’ but that a recovery came with surprising speed.
   ‘Few developments have been more striking than the turnaround in equity markets,’ he said.
   Many analysts say that following the stomach-turning ups and downs over the past months, the stock market may be fairly valued, leaving the possibility of an extension of gains into 2010.
   ‘We have made a lot of progress during 2009 and we have a lot more to make,’ said John Wilson, equity strategist at Morgan Keegan.
   ‘This has been a difficult decade for investors. If history is any example, the next decade should provide a more favourable environment.’
   Bonds fell amid a shift to equities in the past week. The yield on the 10-year treasury bond increased to 3.807 per cent from 3.546 per cent a week earlier while that on the 30-year bond rose to 4.687 per cent from 4.458 per cent. Bond yields and prices move in opposite directions.

The dollar traded mostly lower Thursday in thin pre-holiday trade after lacklustre US economic data prompted the market to rethink expectations for a rapid federal reserve interest rate increase.
   The euro edged up to $1.4356 at 1915 GMT from $1.4335 in New York late on Wednesday, as markets wound down activities ahead of the Christmas holiday break.
   Against the Japanese currency, the dollar drifted down to 91.46 yen from 91.60 yen on Wednesday.
   The market reacted to news that orders for US manufactured durable goods edged up 0.2 per cent in November, led by a strong rise in demand for computers and electronics products.
   Although positive, the report was weaker than market expectations, and came on the heels of disappointing data Wednesday on new US home sales and softer-than-than-expected growth in consumer spending.
   The sluggish report was partly offset by data showing new US claims for jobless benefits dropped to the lowest level since September 2008, although analysts cautioned the data may be subject to holiday volatility.
   Brian Zarembski at PNC Bank said the recent lacklustre economic data ‘underscored the fragility of the US recovery.’
   Zarembski said the dollar has gained some four per cent on the euro this month on expectations that the economic recovery is gaining steam, which would lead the Fed to boost interest rates sooner than expected. But he said some now doubt this scenario.
   ‘Markets are beginning to question if the Fed will be able raise interest rates anytime soon,’ he said. ‘The Fed has been pretty clear about its intentions to keep rates low, so the dollar could come under pressure again heading into next year.’
   Michael Malpede at Easy Forex said that some traders were still stung by Wednesday’s deeply disappointing report showing an 11.3 per cent drop in new US home sales, highlighting volatility in the fragile housing market.
   ‘The dollar is trading lower with most of Europe closed and trading conditions extremely thin,’ he said.
   ‘The weak housing data will encourage the Fed to maintain low interest rates.’
   He said the euro, which has been battered by worries about Greece’s fiscal and debt woes, got some support on news of Greek budget cuts.
   The budget, passed by a healthy majority in the single-chamber parliament, is marked by a reduction in the public deficit from 12.7 per cent of output in 2009 to 9.1 per cent.
   Malpede noted that a survey of Japan’s business sentiment showed an increase but that was offset by Bank of Japan minutes for the November policy meeting which state ‘that deflation is a major economic risk and monetary policy will remain extremely accommodative.’
   In late New York trade, the dollar stood at 1.0385 Swiss francs from 1.0386 Wednesday.
   The pound fetched $1.5945 after $1.5956.

Oil prices extended gains Thursday from a larger-than-expected drop in US energy stockpiles and an intense cold snap in the United States, the world’s biggest energy consumer.
   New York’s main futures contract, light sweet crude for delivery in February, rose $1.38 to $78.05.
   London’s Brent North Sea crude for February delivery gained 86 cents to $76.31.
   The Christmas Eve market surge was largely driven by a fall in energy inventories in the United States that had been far larger than expected, analysts said.
   Data released by the US department of energy on Wednesday showed stockpiles of crude dropping by 4.9 million barrels to 327.5 million in the week ending December 18, far above analyst expectations of a 1.1 million-barrel drawback.
   Distillate inventories also slid 3.1 million barrels last week, against analyst forecasts of a 1.6 million barrel fall.
   Data for distillates, which include heating oil, is in focus as winter starts to bite in the United States and Europe.
   ‘The weather has gotten colder, there could be another large draw next week, so you’re starting to get a situation where the market could be tightening quickly,’ said independent analyst Ellis Eckland.
   Some analysts cautioned however that despite the fall in stockpiles, inventory levels were still high.
   ‘Crude oil stocks are still lingering near the upper end of the five-year range, thus creating doubt in our mind as to the underlying strength of the recent price rally,’ MF Global analyst Tom Pawlicki said.
   Oil prices have meanwhile risen for much of the week as traders bet on improving demand after OPEC decided against changing the cartel’s official crude output levels. The Organization of Petroleum Exporting Countries, as expected, held its crude output quotas unchanged at its meeting in Angola Tuesday, warning of lingering weakness in the world economy.
   Tuesday’s meeting capped a year of recovery for oil prices, which have more than doubled since the cartel set strict quota cuts in the depths of the economic crisis a year ago.
   In January the cartel enforced total OPEC cuts of 4.2 million barrels a day, which helped prices recover from around $32 one year ago.

Apple Inc shares hit an all-time high Thursday after a published report suggested the intensely scrutinised yet secretive company may be getting ready for a major product announcement.
   Citing unnamed people familiar with the preparations, the Financial Times reported on its web site Wednesday that Apple has rented space for several days in late January at an arts centre in San Francisco.
   The company is famed for its highly staged launches. Chief executive officer Steve Jobs has used past events to introduce groundbreaking — and lucrative — gadgets such as the iPod and the iPhone.
   Although Apple has not acknowledged working on a tablet computer — the company is notorious for keeping upcoming product plans closely guarded — analysts expect the company’s next blockbuster to be something of a cross between a laptop and an iPod Touch, which is essentially an iPhone without the calling features.
   Apple did not immediately respond to a request Thursday for comment on the FT report.
   In a note to investors this month, Oppenheimer’s Yair Reiner said Apple could have a tablet out by late March or April based on checks with contacts in the US.
   Brian Marshall, an analyst with Broadpoint AmTech, expects the device to launch late in the first quarter, but he said the rise in Apple shares Thursday had more to do with investor behaviour at the end of the year.
   He said that after cashing in from the rise in Apple shares over the past few months, ‘people are coming back to the well,’ betting the stock will head even higher in 2010.
   Apple shares hit an all-time high of $209.35 at one point on Thursday, topping the previous record of $208.71, set Oct 21. The stock was up $6.94, or 3.4 per cent, to $209.04 in afternoon trading.
   Apple shares have recovered from a 52-week low of $78.20 in January, helped by consistently growing profits.
   Even during the worst of the recession, people continued to buy iPods, iPhones and Mac computers. In its most recent quarter, the Cupertino, Calif, company reported a 47 per cent jump in net income to $1.7 billion, on revenue of $36.5 billion.
   With a market capitalisation of more than $182 billion, Apple is now bigger than rival computer makers Dell Inc and Hewlett-Packard Co combined. Dell has a market cap of about $28 billion, while HP is at $124 billion.

The Greek parliament has adopted a crisis budget for 2010 in a bid to bring order to its chaotic public finances and restore its badly dented credibility with foreign investors and the European Union.
   The budget, passed by a healthy majority in the single-chamber parliament late Wednesday, is marked by a reduction in the public deficit from 12.7 per cent of output in 2009 to 9.1 per cent.
   The 160 Socialist Pasok deputies in power since October voted for the budget, and 139 opposition members including conservatives, communists, the radical left and extreme right voted against. One conservative member was absent.
   Wrapping up five days of debates, which came as Greece’s debt has soared bringing a drop in its credit ratings, prime minister George Papandreou said the budget was ‘a contract to reconquer our credibility.’
   Papandreou went on: ‘We shall prove our capacity and determination to change this country, to ourselves and to any foreigner who puts in doubt our will.’
   The Socialists, elected in October on an economy rescue ticket, had already warned that the 2010 budget was the nation’s ‘toughest’ since the restoration of democracy in 1974 after seven years of military rule.
   The government is struggling to restore investor confidence and muster funds to service an estimated 300-billion-euro debt following three successive downgrades from international credit rating agencies this month.
   The budget aims to reduce the deficit from 12.7 per cent of output to 9.1 per cent in 2010, which would still exceed the limit of 3.0 per cent for countries that use the single European currency.
   But the government has already promised to aim for a bolder deficit cut to 8.7 per cent of output next year.
   Under the budget the debt will in fact rise to 120.8 per cent of GDP compared to 113.4 per cent for 2009.
   Expenditure will fall back by 2.3 per cent while income is slated to rise by nine per cent over 2009.
   Tax revenue is expected to be up due to a tougher fight against fraud while public spending will be cut essentially through cutting back on waste. The defence ministry’s budget is down 6.6 per cent over 2009.
   GDP is expected to stagnate in 2010 with a drop of 0.3 per cent, showing a slight improvement over 2009 when a drop of 1.2 per cent is expected. Inflation is forecast at 1.4 per cent against 1.2 while unemployment would continue to rise, to 9.7 per cent against nine per cent in 2009.

The dollar was mixed in quiet holiday trade in Asia Friday as investors reacted calmly to the latest economic data from the United States and Japan, dealers said.
   The dollar was at 91.47 yen in Tokyo afternoon trade, compared with 91.46 in New York late Thursday. The euro firmed to $1.4385 from 1.4356 and to 131.60 yen from 131.32.
   ‘There is very little movement due to the Christmas holiday. Economic indicators in the US and Japan have had little impact on market sentiment,’ said Societe Generale forex strategist Kenichi Yumoto.
   Markets gave a tepid response to news that orders for US manufactured durable goods edged up 0.2 per cent in November, led by a strong rise in demand for computers and electronics products.
   Although positive, the report was weaker than market expectations and followed disappointing data earlier this week on new US home sales and consumer spending.
   New US claims for jobless benefits dropped to the lowest level since September 2008 but analysts said the data might have been affected by the seasonal holidays.
   In Japan, the unemployment rate rose to 5.2 per cent in November from 5.1 per cent in October, worsening for the first time in four months, the government said. But the report was in line with market expectations.
   Japan’s core consumer prices fell 1.7 per cent in November from a year earlier, the ninth straight month of drops, fanning worries that deflation could hinder a fragile recovery in Asia’s biggest economy.
   Against Asian currencies, the dollar fell to 1.4064 Singapore dollars from 1.4074 a day earlier, to 1,174.60 South Korean won from 1,177.50, to 9,480 Indonesian rupiah from 9,485 and to 32.25 Taiwan dollars from 32.26.
   The greenback rose to 33.38 Thai baht from 33.36 while holding steady at 46.51 Philippine pesos.

Worries mounted Friday that Japan’s economic recovery is running out of steam as data showed the jobless rate rising and deflation continuing to hobble the world’s number two economy.
   The unemployment rate climbed to 5.2 per cent in November from 5.1 per cent in October, worsening for the first time in four months, the government said.
   Core consumer prices fell 1.7 per cent in November from a year earlier, the ninth straight month of drops, fanning worries that deflation could jeopardise a fragile recovery from the worst recession in decades.
   Last week Japan’s central bank said it was a ‘critical challenge’ for Asia’s biggest economy to overcome deflation, which hurts companies and encourages consumers to put off purchases.
   The economy is still gradually recovering but increasingly appears to be heading for a lull, said Hiroshi Watanabe, an economist at the Daiwa Institute of Research.
   ‘Unemployment has improved rapidly for the past three months (to October) as it emerges from the worst period, but it is likely to stay slightly above five per cent in the coming months,’ he said.
   The jobless rate was a record 5.7 per cent in July.
   Kyohei Morita, chief Japan economist at Barclays Capital, said the jobless rate could rise into the upper five per cent range in the April-June quarter next year with retail and other sectors reducing job offers.
   Deflation may ease due to an economic expansion and a planned tobacco tax hike, but inflation will not return any time soon, he added.
   ‘It will be at least three years until we see price rises. Japan’s economic recovery is not strong enough to break out of deflation,’ he said.
   Japan’s economy grew in April-June for the first time in five quarters on rebounding exports and government stimulus measures, but stubborn deflation is seen as a threat to the recovery.
   Japan was stuck in a deflationary spiral for years after its economic bubble burst in the early 1990s, hitting corporate earnings and prompting consumers to put off purchases in the hope of getting a lower price.
   The current global economic downturn and a slump in commodity costs have pushed Asia’s biggest economy back into deflation.
   Watanabe said consumers were tightening their purse strings as they expect prices to fall further.
   Government subsidies to spur purchases of environment-friendly cars and household appliances have supported buying of such items in recent months.
   ‘But consumers were trying to curb spending on clothing and other items with no prospects that their income will rise,’ Watanabe said.
   Japan’s automobile production last month grew for the first time since the financial crisis, according to an industry report released Friday.
   Domestic production of cars, buses and trucks in November edged up by 0.5 per cent from a year earlier to 859,677 vehicles, posting the first rise in 14 months, the Japan Automobile Manufacturers Association said.
   Household spending rose 2.2 per cent in November from a year earlier, beating market expectations for a rise of 0.3 per cent, the government reported.
   The rise largely stemmed from purchases of consumer electronics, while spending on dining out and clothing fell.
   Another government report showed Japan’s housing starts in November fell by 19.1 per cent from a year earlier.

Shoppers appear to have given the nation’s stores a needed last-minute sales surge.
   Early readings from Toys R Us, Sears Holdings Corp and several mall operators show packed stores on Christmas Eve following a busy week fueled by shoppers who delayed buying, waiting for bigger discounts that never came or slowed by last weekend’s big East Coast snowstorm.
   Stores are counting on these stragglers in a season that so far appears slightly better than last year’s disaster. The jury is still out, because the week after Christmas accounts for about 15 per cent of sales as gift card-toting shoppers return to malls.
   ‘The procrastinators were really out in force,’ says David Bassuk, managing director in the retail practice of AlixPartners, a global business advisory firm. ‘But I think retailers needed to be more aggressive to fight for those sales. A lot of people are still willing to hold out until after Christmas because the deals weren’t as good.’
   A Christmas Eve snowstorm in the nation’s heartland were slowing some shoppers after snarling roads in the mountain states a day earlier.
   At the Mall of America in Bloomington, Minnesota, shoppers were scarce and those who showed up had entire stores to themselves.
   Steve Burns, 42, and his 15-year-old daughter, Amber, of Hastings, Minnesota, took advantage of the empty stores to browse for shirts and other last-minute gifts. Burns said the snow wasn’t a problem and traffic was light because others stayed home.
   ‘It doesn’t bother me any,’ he said.
   Some shoppers had challenges finding what they wanted as stores had slashed their inventories heading into the season. An Ann Taylor store at Westside Pavilion in west Los Angeles pulled in 33 cartons of January merchandise earlier than planned, according to Rebecca Stenholm, a company spokesman at the mall’s operator, Macerich Co.
   Joe Roberts, 59, left a RadioShack at a mall in Madison, Wis, with a huge smile and the PlayStation3 his teenage son insisted on for Christmas.
   He said he delayed making the $300 purchase because of economic concerns. A self-employed designer of manufacturing equipment, Roberts is getting less business every year and his wife might soon lose her job as an office manager.
   ‘I don’t feel good about our outlook,’ he said.
   Roberts said they nonetheless decided Wednesday to grant their son’s wish, but then learned the video-game system was sold out at Best Buy, Walmart and other stores. Roberts finally connected with RadioShack early Thursday and braved icy roads to buy the store’s last one.
   Snowy weather can take a toll on sales. Research firm ShopperTrak reported Saturday’s snow helped fuel a 12.6 per cent drop in sales Saturday compared with a year earlier.
   Wally Brewster, spokesman at General Growth Properties said merchants in his centers said they had made up for lost sales. Still, he expects overall holiday sales will be only about even with a year ago.
   Caution remained. Karen MacDonald, spokesman for mall operator Taubman Centers Inc, noted that stores said many shoppers, remembering the 80 to 90 per cent clearance sales they found last year, were asking whether the discounts were going to get any deeper.
   And Macerich’s Stenholm reported that more people were using cash to pay for gift cards than a year ago, reflecting tight credit and a desire to pay down debt.
   The full picture won’t be known until merchants report December sales Jan 7. But most expect merchants’ fourth-quarter profits should be intact because they didn’t have to cut prices more than they’d planned as they were cushioned by lean inventories.
   ShopperTrak is sticking to its prediction for a 1.6 per cent gain, compared with a 5.9 per cent drop a year ago.
   The National Retail Federation expects that total retail sales will slip 1 per cent, though some experts say that might be a bit too cautious. A year ago, they fell 3.4 per cent by the trade group’s calculations.
   Those concerns were far from most shoppers’ minds, though.
   Otis Tyler got up early Thursday to take a 12-mile boat ride from his home on Smith Island in Maryland’s Chesapeake Bay to buy his Christmas gifts. From there, he drove 40 minutes to The Centre at Salisbury, Md, hoping to pick up gift cards for his wife and daughter-in-law.
   ‘I always like to do it on Christmas Eve,’ said Tyler, 60. ‘It’s something I’ve been doing a long time. It’s the hustle and bustle that I like.’

A US financial crime agency’s plan to let foreign police seek information from American banks is drawing opposition from groups representing US financial institutions.
   The proposed rule by the Financial Crimes Enforcement Network, a division of the Treasury Department, would also permit US state and local law enforcement authorities to make similar information-sharing requests of banks.
   Regulations adopted after the 9/11 attacks in 2001 allow only federal law enforcement agencies, through FinCEN, to request such information.
   FinCEN can require US financial institutions to search their records to determine whether they have done business with individuals suspected, based on credible evidence, of terrorism or money laundering.
   Written comments on the proposed expansion of the rule were due December 16, and more than half a dozen organisations, including the American Bankers Association and the Credit Union National Association, said the plan is intrusive.
   In a 13-page letter, ABA vice-president Robert Rowe called the proposal ‘premature and unfounded’ and said it represented a ‘dangerous broadening’ of the information-sharing process.
   ‘There is absolutely no indication that the extraordinary power available under the 314(a) data-match program was ever intended by congress to be put at the service of foreign countries,’ he wrote, referring to FinCEN regulations that are part of the US Patriot Act of 2001.
   The Credit Union National Association, a trade organisation that represents thousands of state and federal credit unions, said it was worried about the burden the rule would impose on its members.
   FinCEN has estimated that information requests under the rule would require no more than 72 additional hours per year per institution to process. The association said many of its small members cannot afford to automate their processes.

Navana Limited, the distributor of Toyota in Bangladesh, opened a new showroom at 37, agrabad C/A in Chittagong recently.
   Navana Group vice-chairman Saiful Islam inaugurated the showroom, said a news release.
   Toyota Tsusho Corporation Dhaka Office general manager Y Miura and officials from different levels of Navana Limited were present on this occasion.
   Navana vice-chairman Saiful Islam said, ‘We have a huge customer base in Chittagong most of whom are unaware of the brand new Toyota vehicles since we did not have a proper showcase for them. To provide the premium quality vehicles to those customers, we have brought the brand new Toyota showroom to Agrabad.’
   Navana has extended their customer access points to serve the Chittagong customers with brand new Toyota models.
   In this showroom, Navana Limited will display their vehicles at the doorsteps of buyers from Chittagong city who do not need to rely only on the catalogue or video presentations of the car anymore.

Southeast Bank Limited opened its 7th SME service centre at Sonagazi in Feni on Monday.
   Bank’s senior executive vice-president and information technology division head SM Mainuddin Chowdhury inaugurated the SME service centre, said a news release.
   Bank’s senior executive vice-president and human resources division head Shahid Hossain delivered the address of welcome in the inaugural function.
   Senior executives of Feni region, industrialists, businessmen, customers, educationists and local elites were present in the inaugural function among others.
   In his inaugural speech, SM Mainuddin Chowdhury informed the audience that the bank’s Sonagazi SME service centre would conduct its operational activities by applying modern technology. He assured that the dwellers and the businessmen of the area will be given modern banking services from this centre.
   Local businessmen and elites also spoke on the occasion wishing the operational success of the SME centre. Service centre in-charge offered vote of thanks in this function.

Berger Paints Bangladesh Ltd has opened its 8th sales depot in Mymensingh on Sunday.
   Berger Paints Bangladesh Ltd managing director Ruplai Chowdhury inaugurated the activities of the depot, said a news release.
   Berger Paints sales and market general manager Mohsin Habib Chowdhury, other officials and renowned dealers were also present in the ceremony.
   Rupali Chowdhury expressed the hope that the new sales depot in Mymensingh would further excel the customer service of Berger Paints in the region.