Apparently confused about probable outcomes of budgetary measures aimed at increasing investment, business leaders feel that budget implementation and improving business climate are the two most important challenges in the new fiscal year.
   The public-private partnership is though included as new component into the budgetary framework for attracting higher private investments to commission joint-venture projects, they believe, its success hinges entirely upon its legal framework and how the government handles the situation to raise the level of efficiency and instil dynamism in administrative affairs.
   However, the business leaders have dissenting views on immediate positive response to the budgetary measures from the investors despite their broader agreement on the ‘business-friendly’ approach of the budget for the 2009-2010 fiscal beginning today. The government’s move to provide incentives to different sectors under the stimulus package has also been appreciated.
   The finance minister’s assumption to increase private investment by giving incentives to the private sector and impetus to the bureaucracy may even end up in a fiasco unless the government can employ all-out efforts from day one to materialise the budgetary goals, said an economist, who expressed apprehensions about crowding out of the private sector in getting aces to banking sector lending in view of higher revenue requirements of the government.
   ‘If the infrastructure problem is not solved and electricity supply is not available, investors will not shrug off their hesitations. I don’t think there will be much investment under the PPP in an atmosphere dominated by too much bureaucracy and politicisation,’ said Anwar-Ul-Alam Chowdhury Parvez, a former president of Bangladesh Garment Manufacturers and Exporters Association.
   The only ‘viable way’ to boost investment in the infrastructure sector in Bangladesh is to initiate ‘build, operate and transfer’ contracts with both local and foreign entrepreneurs, he expressed his conviction, adding that the government is yet to give right signal to genuine entrepreneurs.
   Asked about the prospect of vibrant business and investment in the new fiscal — the first full year of the Awami League-led government —, the president of Federation of Bangladesh Chambers of Commerce and Industry, Annisul Huq, said nobody would be able to predict the success of the budget and whether entrepreneurs would come forward in huge numbers to invest money. ‘Addressing infrastructures including electricity and implementation are the biggest challenge in this regard,’ he said.
   ‘Businesspeople have no reasons to be unhappy with the budget,’ said the FBCCI president who spearheaded the business community’s demand for allowing investment of undisclosed money in productive sectors.
   The president of Dhaka Chamber of Commerce and Industry, Zafar Osman, expressed his satisfaction at the latest budgetary provision to ask the sources of money while allowing its investment by paying 10 per cent tax and said the provision would help identify how the money was earned and encourage the genuine investors to come up with investment proposals for the specified sectors.
   ‘The budget looks to be pragmatic and fiscal measures will be friendly to industries. But unless the law and order and infrastructure situation improves, nobody will come to invest here,’ he said.
   Both Annis and Osman lauded the government for taking the budgetary measures to slash down corporate tax by 2.5 per cent and said the tax reduction as demanded by the corporate sector, would encourage healthy growth.
   ‘Policy framework for the private sector will be very important and the PPP is the first step towards promotion of investment,’ said Hossain Khaled, a former president of Dhaka Chamber of Commerce and Industry. He criticised the move to send Rapid Action Battalion to collect value added tax and said such attitude towards business community would not help build their confidence.
   ‘Unless the government can ensure partnership properly, the concept of PPP will not be successful although the budget is generally business-friendly,’ said Ananya Raihan, executive director of research organisation D-Net, adding that the finance minister had gambled by assuming that the private sector would fill in the gap in public investment.
   The economist expressed his views that the government should not privatise some essential services such as electricity, railway and water supply apart from education and health in order to ensure public welfare.

Turnover at the Dhaka Stock Exchange Tuesday crossed Tk 900 crore-mark for the first time ever, as investors shrugged off a telephoned bomb threat that forced the bourse’s authorities to stop trading 45 minutes earlier than the scheduled closing time a day before.
   DSE turnover touched a new high at Tk 942.20 crore on the day the parliament passed the budget for 2009-10 fiscal, which offered a number of incentives for the capital market. The previous highest turnover at the DSE was Tk 834.70 crore on June 21.
   ‘It is a good sign that investors shrugged off the bomb threat that was made over phone yesterday (Monday),’ said Yawer Sayeed, chief executive officer of Aims of Bangladesh, an asset management firm.
   Usually, the last trading day of a financial year witnesses increased transactions, he said.
   ‘Institutional investors contributed heavily to Tuesday’s turnover as they remained very active on the last day of the fiscal year due to portfolio balancing,’ added Yawer.
   DSE general index gained 57.63 points, or 1.95 per cent, to close at 3,010.26. The bourse’s benchmark index crossed 3000-point mark after nearly nine months. DSE20 index of blue chips advanced by 26.85 points, or 1.11 per cent, to finish at 2,453.73 on Tuesday.
   ‘Investors kept their confidence on the market despite the Monday’s fake bomb threat,’ said DSE senior vice-president Saiful Islam.
   On Monday, the bourse’s authorities halted trading at 1:15pm instead of the scheduled 2:00pm after a bomb explosion was threatened by an unknown caller over the phone.
   Various law-enforcing agencies, including RAB, conducted a thorough search and had found no bomb in the DSE building and its annexe, according to DSE and police sources.

Japanese companies have found Bangladesh a promising place for doing business and shown interest in setting up companies here, said the outgoing Japanese Ambassador, Masayuki Inoue.
   Inoue, on completion of his three-year tenure in Dhaka, has found a newly emerged middle-class in Bangladesh an attractive market and said there are lots of business opportunities that still remain uncultivated in this country.
   However, he underlined the importance of synchronising policy regimes for the sake of sustaining a positive trend in the changing situations of trade and investment, which still remain a matter of concern to many local and foreign entrepreneurs.
   ‘Hidden costs exist in matters related to procedure, policy and the legal framework…I hope that Bangladesh will materialize a comprehensive one-stop service mechanism for the convenience of investors,’ said the ambassador recently at a gathering in the capital organized by the Japan-Bangladesh Chamber of Commerce and Industries.
   He said that the business relationship between the two countries was the driving force which would strengthen the existing friendship between Japan and Bangladesh.
   ‘I believe Bangladesh will certainly overcome such challenges and expand its business with Japan further,’ said Inoue.
   Dwelling on the Japanese investors’ interest in Bangladesh, he said that UNIQLO, a leading retail chain store, and NTT DoCoMo, a leading mobile operator, started their business in Bangladesh last year.
   ‘These two investments will be a critical turning point in Bangladesh’s investment scenario,’ claimed Inoue.
   The outgoing Japanese ambassador said he was impressed with the social change in Bangladesh, especially the continuing emergence of a strong middle-class.
   ‘In addition to economic growth, I am quite sure that middle-class people have emerged in greater numbers in these years. A large number of Bangladeshi women are getting engaged in outside jobs, which was rather rare in the past. Owing to the booming trend of remittances, rural villagers too have accumulated some wealth,’ observed Inoue.
   ‘If we consider such a new middle-class to be an emerging market in the Bangladeshi economy, I feel that there are lots of business opportunities still uncultivated in this country,’ said the outgoing ambassador.

The government has reduced the corporate tax on banks and insurance companies by 2.5 per cent, but the crucial change was not mentioned by finance minister AMA Muhith during his address on the proposals due to ‘a lapse of memory’.
   ‘I just forgot to announce the change, which was the last one in my fiscal proposals,’ he told New Age Tuesday evening.
   Corporate tax on banks and insurance companies has been reduced to 42.5 per cent from the previous 45 per cent, he said.
   Reduction of the corporate tax has been a longstanding demand of the banks and insurance companies which termed the rate the highest in South Asia.
   The officials and leaders of the banking and insurance sector said they were frustrated after the finance minister did not come up with the announcement of the reduction in his proposals on Monday.

Bangladesh Bank on Tuesday announced its credit information bureau was ready to give default loan information to banks and financial institutions within five working days.
   The quick service as per the central bank service standard will be provided from today.
   ‘We’ve up to date information from a huge backlog today (Tuesday),’ executive director AHM Kai-Khasru told a news briefing at the central bank.
   He said the CIB had a huge backlog of over 60,000 inquiries for credit information because of increased demand for credit information. Secondly, the backlog further worsened because of Bangladesh Bank’s involvement in the process of 9th parliamentary and upazila parisad elections.
   He said banks and financial institutions had to wait even one and half month to get credit information from the CIB, as a result. Disbursement of loans to different projects was delayed due to lack of timely CIB report.
   Khasru said the backlog had been removed through special efforts of the central bank by involving fresh recruited 50 officers, even before their training, and 30 interns as they worked on up dating the information in double shifts for last one and half month.
   He said the number of inquiries was increasing day by day and the average inquiries rose to 4,000 per day.
   ‘The demand for credit will increase further,’ he said, adding that the central bank would put the credit information online as a project in this regard was progressing.

The Rajshahi mayor, AHM Khairuzzaman Liton, on Tuesday said the Rajshahi Silk Factory would be reopened in the first week of the next year.
   The committee, formed to reopen the factory, will visit the site shortly, he said while he was addressing the inauguration ceremony of a mass-contact programme to drum up awareness among growers to cultivate sericulture and extension of the industry.
   The Bangladesh Sericulture Board organised the programme in Rajshahi as part of the countrywide programme.
   The mayor alleged that due to conspiracy in home and abroad as well as wrong decisions by former governments the sericulture industries in the country were now facing ruination.
   He also said a several lakh cultivators of the areas would be benefited after reopening of the factory.
   Bangladesh Sericulture Board chairman Sunil Chandra Paul also spoke.
   Earlier, a procession was brought out in the city.

   Mutual Trust Bank has promoted Md Hashem Chowdhury to the rank of deputy managing director with effect from today (July 1, 2009).
   Prior to the new assignment, Hashem Chowdhury was the senior executive vice-president of the bank, a news release said.
   He was also the supervisor of MTB branches in Chittagong area.
   Hashem joined MTB as a member of its founding team in April 1999. He is a founder member of the Bangladesh Money Market Dealers’ Association and currently a senior member of its advisory committee.

Delta Brac Housing Finance Corporation Limited has incorporated all the latest information and updates about its products and services in its web site — www.deltabrac.com.
   The updated information related to home loans including Bangladesh Bank refinance scheme, fixed deposits, property services, latest events and updates of the company will be available in the site from July 1, 2009 (today), a news release said.

The board of directors of Popular Life Insurance has recommended 26 per cent stock dividend for the year 2008. Date of AGM: August 31, 2009, time: 12:00 noon, venue: IDE Bangladesh, Kakrail, Dhaka. Record date: August 3, 2009.
   National Life Insurance
   As per audited accounts as on December 31, 2008, the company has reported an increase in life revenue account of Tk 2,322.40 million with total life insurance fund of Tk 11,404.49m as against Tk 1,947.07m and Tk 9,082.09m respectively as on December 31, 2007.
   Bd Thai Aluminium
   The company has informed that an EGM of shareholders of the company will be held at its factory premises at Chandra, Gazipur on August 10, 2009 at 11:00am to pass special resolution to add Article 63A to the company’s Articles of Association so as empower its shareholders to loan shares to a third party, both local and foreign, with or without securities as decided by them. Record date for EGM: July 20, 2009.
   Continental Insurance
   The company has informed that the board of directors of the company has decided to sponsor a Mutual Fund subject to approval from SEC. The company will invest a minimum amount of Tk 5 crore in the Mutual Fund. The size and other details of the fund will be determined at a later date. The company has also appointed AIMS of Bangladesh Ltd as the designated Asset Management Company.
   Summit Power
   The company has informed that it has credited the stock dividend for the year 2008 to the respective shareholders’ BO accounts on Tuesday.
   Southeast Bank
   The bank has informed that the board of directors of the bank has taken the decisions— to purchase floor space of 13,360 sqft at Commercial Block, north Nikunja, Dhaka at the negotiated price of Tk 10,000 per sqft for establishing a branch and a merchant banking wing there and to purchase floor space of 8,712 sqft at ‘Rupayan Trade Centre’, Kazi Nazrul Islam Avenue, Dhaka at the negotiated price of Tk 12,500 per sqft for establishing a branch there.
   Islami Bank
   Muhammad Mosharraf Hossain, one of the sponsors/directors of the bank, has reported his intention to buy 1,000 shares of the bank at prevailing market price through Stock Exchange.
   Source: DSE

The yen turned higher against the dollar in late Asian trade on Tuesday as the market waited for a flurry of economic reports including a key survey of Japanese business confidence.
   The dollar slipped to 95.84 yen in Tokyo afternoon trade from 96.04 in New York late Monday. The euro climbed to 1.4120 dollars from 1.4088 but was flat at 135.28 yen.
   Currency traders were waiting for fresh cues from a string of economic figures in the United States, including housing and consumer data out later in the day, followed by key monthly jobs on Thursday.
   In Japan, a key survey of business confidence due to be released on Wednesday, is expected to show an improvement in sentiment among the country’s major manufacturers from a record low the previous quarter.
   But it is hard to predict what the impact will on the yen, Yuji Saito, head of forex at Societe Generale in Tokyo, told Dow Jones Newswires.
   Positive news could push up shares and spark selling of the safe-haven yen, said Saito.
   ‘But if players focus on the leading indicator portions of the Tankan, which won’t be as bright, that could be a drag on share prices, which could help the yen,’ he said.

Wall Street swindler Bernard Madoff was sentenced Monday to 150 years in jail for masterminding an ‘evil’ multi-billion-dollar investment scam that cheated thousands of people around the world.
   ‘It is the judgment of this court that Bernard Madoff should be sentenced to 150 years in jail,’ Judge Denny Chin said as he handed down the maximum term possible on 11 charges of fraud, theft and perjury.
   He described Madoff’s crimes as ‘extraordinarily evil’ and said it was ‘not merely a bloodless crime that takes place on paper but one that takes a staggering human toll.’
   The tough sentence came even after Madoff, the former chairman of the Nasdaq, made a courtroom apology to his victims. ‘I am sorry,’ he told them simply. ‘I don’t ask for forgiveness.’
   ‘I leave a legacy of shame to my family. I am responsible for a great deal of suffering and pain. I live in a tormented state,’ said the disgraced 71-year-old financier who now faces spending the rest of his life in prison.
   ‘I cannot offer an excuse for my behaviour,’ he added. ‘How do you excuse deceiving investors... and 200 employees?
   ‘How do you excuse lying to my sons and two brothers? How do you excuse lying to a wife who stood by you for 50 years and still stands by me? There is no excuse for that.’
   Some of Madoff’s victims vented their fury as they addressed the court.
   Cheryl Weinstein blasted Madoff as ‘a monster.’
   ‘He walks among us. But he is a beast who has fed upon us to satisfy his own needs... I am asking you to keep (him) in a cage behind bars,’ she said.
   Bursting into tears, Burt Ross, who lost five million dollars, said Madoff ‘has truly earned his reputation of being the most despised person in America today.’
   ‘I only hope that his jail sentence is long enough so that his jail cell becomes his coffin,’ said Michael Schwartz, 33, explaining that the money stolen from his family had been set aside to take care of his mentally disabled brother.
   Judge Chin gave Madoff 10 days to appeal, but noted there had not been a single letter from friends or family testifying to his good deeds. ‘The absence of such support is telling,’ he said.
   Madoff’s wife, Ruth, finally broke her silence Monday to lash out at her husband, saying: ‘All those touched by this fraud feel betrayed; disbelieving the nightmare they woke to.
   ‘The man who committed this horrible fraud is not the man whom I have known all these years,’ she said in a statement.
   ‘The judge wanted to send a very strong signal to anybody that invests money on behalf of others of the amazing responsibility that they have to those investors and to the country,’ he said, adding ‘that message will be heard loud and clear.’
   The former Wall Street icon can expect to face high security in jail rather than a more lax ‘prison camp’ that other white-collar criminals might receive, according to former federal prosecutor William Devaney.
   The decision, Devaney told the AFP, is not for the judge but the court can make recommendations to the Bureau of Prisons.
   The verdict came some six months after the biting economic downturn forced Madoff to unmask himself as behind one of the biggest financial scams in history.
   Prosecutors say about $13 billion was handed to Madoff. The financier himself has talked about losing some $50 billion, which is believed to be the amount that would have been paid out had the funds been properly invested.
   ‘There are only two places that the cash could have gone upon leaving the fund,’ Roger Siefert, who conducts investigations for financial advisor LECG, told the AFP.
   ‘Into the pockets of the Madoff family for personal use or to run the business... or to repay early investors,’ he said, stressing that ‘significant amounts of it should be traceable, given enough time and energy.’
   Among Madoff’s victims were Hollywood and international celebrities, several of the world’s best-known banks and Jewish charities, some of which were forced to close after the scheme unravelled.
   Madoff told the court in March that of the billions of dollars that passed through his hands during the three-decade scam, he never invested one cent in the market. Instead he stashed the funds in a Chase Manhattan bank account.
   The funds were then used to pay out ‘dividends’ to investors in what is known as a ‘Ponzi scheme.’
   One lingering issue is how to return the stolen funds. Of the billions of dollars that were lost, prosecutors say only one billion has been recovered.

Britain’s recession-battered economy shrank at its fastest pace in more than 50 years in the first quarter of 2009, revised official data showed on Tuesday, amid the worst global slowdown in decades.
   Gross domestic product contracted 2.4 per cent in the first three months of the year from the final quarter of 2008, said the Office for National Statistics.
   ‘GDP in real terms fell by 2.4 per cent compared with the previous quarter, revised down from last month’s estimate of 1.9 per cent. This is the largest decrease since the second quarter of 1958,’ the ONS said in a statement.
   ‘Around half the revision... is a result of new construction output data, while the remainder reflects more complete data for services,’ it added.
   On a year-on-year basis, Britain’s economy declined by 4.9 per cent in the first quarter, the largest contraction since records began in 1948, and compared to the statistic office’s earlier estimate of minus 4.1 per cent.
   ‘Even deeper contraction in GDP in the first quarter is obviously unwelcome news, but it is also old news and matters have moved on appreciably since then,’ said Howard Archer, chief Britain economist at IHS Global Insight.
   ‘The good news is that the economy probably at worst contracted only modestly in the second quarter and it is not inconceivable that it managed to eke out marginal growth,’ he added.
   The ONS on Tuesday added that GDP had stood at minus 0.1 per cent in the second quarter of 2008 rather than showing flat growth, meaning Britain’s current recession began earlier than expected.
   However fresh signs of better times ahead for the British economy also appeared on Tuesday as home-loans provider Nationwide said British house prices had increased by 0.9 per cent in June from May.

Malaysia on Tuesday announced measures to liberalise the economy as it heads into recession, winding back a decades-old policy of positive discrimination for Muslim Malays.
   Prime minister Najib Razak scrapped a rule requiring initial public offerings to reserve 30 per cent of stock for Malays, and dumped regulatory approval for foreign property purchases.
   ‘The new policies will make our economy more vibrant. I think it will put us high up on the radar to attract foreign direct investment and equity,’ Najib said.
   Economists hailed the liberalisation moves, which come after the government warned the economy could contract by as much as 5.0 per cent this year.
   ‘Given the sharp drop in foreign direct investments, this move will put Malaysia in a favourable position to attract FDIs and sustain domestic investments which have been in the doldrums since the 1998 Asian financial crisis,’ said Yeah Kim Leng, chief economist with RAM Holdings.
   The government removed the requirement for regulatory approval by the Foreign Investment Committee on property transactions, except those that dilute interests of bumiputera — a term for Malays and indigenous people.
   Foreign investors will also no longer have to obtain approval for acquisitions and mergers.
   ‘As for FIC, we can say it no longer exists,’ Najib told reporters, adding it was ‘no longer an effective instrument to support growth.’
   The FIC was part of Malaysia’s affirmative action plan known as the New Economic Policy, a controversial scheme to raise the economic standing of ethnic Malays who dominate the population of the multicultural nation.
   The policy was introduced after 1969 racial riots to address the dominance of the business sector by Malaysia’s ethnic Chinese community, by providing a raft of benefits in housing, education and jobs.
   Critics say the policy has suppressed growth and that it has mostly benefited Malay entrepreneurs, while failing to address poverty among the community.
   When the NEP was introduced bumiputeras had only 2.4 per cent ownership in Malaysian companies. Najib said that figure has now grown to 19.4 per cent and voiced confidence there would not be any political backlash to his reform plan.
   ‘We want to be fair to all communities. No one must feel marginalised or disincentivised. It is a tricky balancing act. It is do-able,’ he said.

Japanese automaker Nissan said Tuesday it sees ‘tremendous opportunities’ in Vietnam and will begin local production next year, despite the global economic crisis.
   Nissan Vietnam Co Ltd will launch its first model assembled in the country by 2010, the automaker said in a press release.
   Manufacturing will be carried out by Vietnam Motors Corp, an existing assembler, under the guidance of engineers from the parent company, the release said. Nissan Vietnam will be the distributor.
   ‘Vietnam is a strategic market for Nissan with tremendous opportunities,’ said Shinya Hannya, Nissan’s corporate vice president for Asian markets.
   ‘The offering of locally assembled products will accelerate our business in Vietnam and lay the foundation for further growth.’
   The statement did not give details including the size of the investment, the factory location or which model will be assembled in Vietnam.
   Company officials could not immediately respond to questions from the AFP.
   Nissan Vietnam is a joint venture between Japan’s Nissan Motor Co Ltd and Denmark’s Kjaer Group A/S, an international distributor of vehicles.
   The press release said Nissan Vietnam began operations in December and has begun importing and distributing Nissan vehicles, parts and accessories through its dealers.
   Seventeen automotive producers or assemblers already have operations in Vietnam, including Ford of the United States, and Honda and Toyota both from Japan.
   Their total vehicle sales in May were 8,761, down from 11,494 a year earlier, according to the Vietnam Automobile Manufacturers’ Association.
   France’s Renault has a 44-per cent stake in Nissan Motor, Japan’s number-three automaker.
   In May the Japanese firm announced its first annual loss in almost a decade and said it expected to stay in the red this year because of slumping sales. The company is cutting 20,000 jobs to cope with the global crisis.

Dutch-Bangla Bank has opened its 71st branch on the premises of the bank’s own building situated on Satmasjid Road in Dhaka on Monday.
   BDBL managing director Md Yeasin Ali formally inaugurated the branch. The inaugural ceremony started with a prayer session, a news release said.
   Elite of the city, industrialists, business personalities, bankers, educationists and journalists were present on the occasion.
   While exchanging views, the managing director mentioned that DBBL had the largest online banking network in the country and the bank had invested huge amount of money in adopting modern technology for the benefit of its customers.

IFIC Bank conducted a daylong workshop on treasury bills and bonds at Motijheel in Dhaka on Saturday.
   As many as 34 branch officials of the bank attended the workshop.
   Bangladesh Bank general manager (Department of Offsite Supervision) SK Sur Chowdhury was the main speaker in the workshop.
   IFIC Bank senior executive vice-president and head of training and research Zaitun Sayef also delivered speech before the participants, a news release said.
   Detailed of ‘marking to market revaluation of treasury bills and bonds held by banking companies’ was discussed in the workshop, the release added.