GP share trading starts on Nov 16
Staff Correspondent
Trading of the shares of Grameenphone Ltd will begin at the Dhaka and Chittagong stock exchanges on November 16.
The Dhaka Stock Exchange at a board meeting on Wednesday decided that the country’s largest mobile phone operator would make its debut at the bourse under ‘N’ category that groups newly listed companies, said a senior DSE official.
An official of the Chittagong Stock Exchange said Grameenphone Ltd would make its debut at the port city bourse on November 16.
Earlier, Grameenphone floated 6,94,39,400 ordinary shares to raise Tk 486.08 crore through an initial public offering.
This was the largest IPO offered by any company in the history of the country’s stock market.
The subscription of the IPO of Grameenphone began on October 4. The subscription closed for the local people on October 8. For the non-resident Bangladeshis, it closed on October 18. The lottery for the allotment of the shares was held on October 28.
The face value of the shares of the company is Tk 10 each. The issue price was Tk 70 with a premium of Tk 60. Market lot has been fixed at 200 shares.
On August 20, the Securities and Exchange Commission, the stock market regulator, gave its final nod to the private telecom company’s application for floating its IPO.
Chittagong Stock Exchange on Wednesday organised a programme to hand over the listing confirmation letter to Grameenphone at the CSE’s Dhaka office at Karwan Bazar.
Grameenphone chief executive officer Oddvar Hesjadal received the listing confirmation letter from the CSE chief executive officer Mohammed Abdullah Mamun.
CSE president Fakhor Uddin Ali Ahmed and Grameenphone company secretary and chief of corporate affairs Raihan Shamsi, among others, were present on the occasion.
Rising inflation threat
seen in South Asia
Agence France-Presse . Washington
Rising inflation is posing a threat to South Asia, with the situation most worrying in the Maldives where a foreign currency black market has emerged, a senior World Bank economist has warned.
Noting that the median inflation rate in South Asia was more than twice that of Latin America and the Caribbean, economist Eliana Cardoso asked whether policymakers in the region should be concerned ‘and wonder whether they are doing something wrong.’
In the third quarter of 2009, inflation in South Asia, which aside from the Maldives comprises India, Pakistan, Nepal, Bangladesh, Afghanistan, Sri Lanka and Bhutan, hit an average 10.9 per cent, the World Bank said.
It compares with just 2.9 per cent in Latin America and the Caribbean.
‘From the price stability perspective the most worrying situation is that of the Maldives,’ Cardoso, the bank’s chief economist for the South Asian region, wrote on the ‘World Bank’s End Poverty in South Asia’ blog.
She said that the budget deficit in Maldives, the region’s most exotic tourist destination, was projected to reach 33 per cent by the end of the year and ‘a black market for foreign currency has emerged.’
Cardoso noted that the Maldives government had promised fiscal adjustment.
President Mohamed Nasheed has said that his atoll nation was facing its worst economic crisis ever because of a sharp fall in tourist numbers and chronic government overspending.
While Afghanistan, despite raging violent conflicts, has been able to keep its macroeconomic policy under control, fiscal slippage in Nepal could undermine macroeconomic stability, Cordoso said.
She proposed tightening of monetary policy in the Himalayan nation since real interest rates were negative at present.
In India, the South Asian giant, widening budget deficits are the most visible obstacle to stable and sustainable growth, Cardoso said.
New Delhi has forecast that inflation could hit 6.5 per cent by the end of the financial year to March 2010 amid speculation the central bank could be forced to raise benchmark borrowing rates early in the new year in an attempt to check rising prices.
But the Indian government is keen for the bank to hold off on rate rises for as long as possible in order to sustain India’s fragile economic recovery.
The International Monetary Fund expects the inflation rate in India to be 8.6 per cent in 2009.
Pakistan was set to have the highest rate at 20.7 per cent, followed by Nepal at 13.2 per cent and Bangladesh at 5.2 per cent this year, the fund said.
Cardoso said that in general, the recipe for hyperinflation was the monetization of budget deficits in countries afflicted by political instability or conflict.
Monetization usually refers to the printing of money by central banks.
‘Even if the threat of mega inflation is far removed from the South Asia scenarios, the combination of big budget deficits and loose monetary policy seems to be present in some countries of the region,’ Cardoso said.
She pointed out that it was possible that the higher inflation in South Asia was ‘just a passing cloud blown by the spike in food prices.’
The Brazilian economist recalled the days when Latin America was the land of inflation with hyperinflation in Bolivia, Brazil and Argentina hogging the news in the 1980s and early 1990s.
‘At that time, Asia was seen as immune to the Latin disease. Since then, much water has gone under the bridge.’
Regional mobile users up 26pc
Agence France-Presse . Singapore
Singapore Telecommuni-cations said Tuesday its regional mobile user base expanded by more than 56 million users over 12 months to the end of September.
The company said the 26 per cent-rise to 273 million was driven by solid growth mainly from regional associates plus net gains in subscribers from wholly owned Australian unit Optus.
Of SingTel’s six regional associates, India’s Bharti posted the biggest increase in per centage terms with subscribers up 43 per cent to 110.5 million, it said.
SingTel, the biggest telecoms firm in Southeast Asia, says it has a 30.44 per cent interest in Bharti.
Indonesia’s Telkomsel, in which SingTel holds a 35 per cent stake, saw a 32 per cent jump in mobile users to 79.8 million.
Other associates AIS of Thailand, Pakistan’s Warid Telecom and Pacific Bangladesh Telecom Limited also saw substantial rises, said SingTel.
Globe Telecom of the Philippines was the only mobile associate to register a decline, with users down 2.6 per cent to 23.13 million from a year ago.
Optus’s mobile base surged 11 per cent to over 8.2 million.
At home, SingTel lifted its domestic market share to 46.2 per cent as local cellular users grew 8.0 per cent to 3.1 million.
The company is expected to release Wednesday its earnings for the September quarter, having reported that net profit for the April-June period rose 7.7 per cent to 945 million Singapore dollars (685 million US).
Digital ICT Fair draws huge crowd
Shop owners happy with sales
Bangladesh Sangbad Sangstha . Dhaka
The Digital ICT Fair-2009, an annual gala exposition of computer and its accessories, is gaining momentum every day with a large number of visitors showing their keen interest to the latest brands of the most modern scientific apparatus.
Nearly 50,000 people, mostly students, have so far visited the fair since its inauguration on November 7 by information minister Abul Kalam Azad, organiser sources said.
Multiplan Centre Shop Owners Association is arranging the nine-day fair at Multiplan Centre in the city’s Elephant Road with the slogan ‘Let ICT be a Tool for Changing Days’.
Besides the capital, people from outside the city are visiting the ICT show, the biggest in Bangladesh, said Tawfique Ehsan, convener of the fair.
He said about 400 shops have been set up from the fourth floor to 10th floor on an area of about 100,000 sft, displaying different brands of computer and its accessories within the range of buyers’ capacity.
Both brand and cloned PCs, laptops, LCD monitor, mouse, keyboard, CD, speaker, DVD, CD ROM drive, calling card, internet card, mouse pad, pen drive, memory card, printer, scanner are available at cost-effective prices, Tawfique said.
Besides computer products, mobile phone and its accessories, MP3, MP4 and digital camera are being displayed at the show, he said.
Tawfique said people could buy a complete multimedia PC at a cost of Tk only 16,500 as the shops have given discounts on various computers and accessories.
Talking to the news agency, the shop owners have expressed their satisfaction over the sale of computers and other products in larger numbers.
‘Over the last four days, we sold computers and other accessories worth about Tk 50 lakh which is our beyond expectations,’ said Manoj Das, branch in-charge, System Palace Ltd.
He said the demand for laptop was more than that for desktop computers and most of the visitors, especially students, are opting for the lighter one. The price of each laptop ranges from Tk 24,000 to Tk 1,25,000, he added.
Visitors as well as buyers are happy with the overall congenial atmosphere ensured with safety and security in and around the fair.
Anika Islam, a third-year student of Eden Girls College, who came to the fair with her three friends, said, ‘We are very happy to see a very beautiful environment here.’
Nazrul Islam, a buying house official who came to buy a laptop at the fair, said, he would purchase a laptop after verifying its prices. He, however, made a comment that the prices of the laptop at the fair are somewhat cheaper compared to those in markets.
The organisers of the fair have taken strict security measures deploying about 50 smart volunteers and installing specialised metal detectors at each entrance of the fair venue.
Monwar Hossain Talukdar Shyamol, convener of the media sub-committee, said the organisers had arranged painting competition for children, debate, SMS and quiz competitions for students, seminar, symposium, free online ticket booking and internet browsing to give an otherwise look to the fair.
The fair open for all from 10:00am to 8:00pm every day will continue till November 15. The entry fee has been fixed at Tk 10 but the school students have free access to the fair, the organisers said.
Unemployment to slow US economy
Agence France-Presse . Washington
US unemployment, now in the double digits, may remain ‘high’ for several years and dampen economy recovery from a brutal recession, a regional central bank official warned Tuesday.
The United States had experienced so-called jobless recoveries following the previous two recessions in 1991 and 2001, when job creation remained weak for several years following the business cycle trough.
‘In both cases, output growth was less robust than in the typical recovery and, unfortunately, things seem to be shaping up similarly this time around,’ said Janet Yellen, president of the Federal Reserve Bank of San Francisco.
Unemployment jumped to double digits in October for the first time since 1983, reaching 10.2 per cent, although job losses narrowed to 190,000, the government said last week.
President Barack Obama called the numbers ‘sobering’ and said his administration was considering ‘further steps’ to spark job growth.
Yellen said overall economic recovery was likely to be gradual and ‘remain vulnerable to shocks’ as weakness of the commercial property market combined with the muted outlook for housing and consumer spending.
‘With such a slow rebound, unemployment could well stay high for several years to come. In other words, our recovery is likely to feel like something well short of good times,’ Yellen said.
The world’s largest economy grew at a seasonally adjusted 3.5-per cent annual rate in the July-September period. The increase was the first since the second quarter of 2008.
The United States plunged into recession in December 2007 following a home mortgage meltdown that sent a financial tsunami around the globe.
Dollar steadies as market
euphoria fades
Agence France-Presse . New York
The dollar stabilised on Tuesday, gaining on the euro and sterling, as some of the euphoria that sparked a big move into risky assets in the prior session faded.
A drop in a German survey on investor sentiment and a warning from ratings agency Fitch about a potential downgrade of the credit rating of Britain unsettled the market, giving the safe-haven dollar a modest lift.
At 2200 GMT, the euro was trading at 1.4985 dollars compared to 1.4994 late in New York on Monday.
The dollar meanwhile dipped to 89.82 yen from 89.95 yen late on Monday.
The pound came under pressure after international ratings agency Fitch warned Tuesday that Britain was the country most at risk of losing its top-level AAA credit assessment.
‘Because of the scale of the fiscal adjustments required to stabilise and reduce public debt, the UK faces the largest medium term challenge’ to reduce it, said David Riley, group managing director.
‘On that basis it is fair to say that—among other AAA-sovereigns like the United States, France and Germany—it is the most at risk of a negative rating action,’ he added.
The pound was fetching 1.6739 dollars compared with 1.6759 late Monday.
APEC asked to fight protectionism
Agence France-Presse . Singapore
Asia-Pacific economies led by the United States and China opened annual talks Wednesday with calls to fight protectionism or risk reversing the region’s ‘fragile’ economic rebound.
Singapore Foreign Minister George Yeo said ‘resisting protectionism’ was the topmost concern, as foreign and trade ministers from the 21-member Asia-Pacific Economic Cooperation group met in advance of a weekend summit here.
‘It is a slippery slope and if we are not careful, before we know it, all of us will be in a much direr situation,’ he said before convening the meeting with US Secretary of State Hillary Clinton and other Pacific Rim delegates.
Asked if the ministers believed the world’s worst economic crisis since the 1930s was at an end, Yeo told reporters: ‘The consensus is that it is by no means over.
‘The upturn that we now have is a respite... the situation is still fragile and we should address the root causes of the problem.’
APEC was founded in 1989 with the goals of promoting free trade and investment. Its membership stretches from impoverished Papua New Guinea to the United States via the fast-emerging heavyweight China.
The group is lagging on its ambition of eliminating all barriers to commerce among developed members by next year, and the global crisis has made free trade an even harder sell, most notably in the United States.
World Bank president Robert Zoellick, who is attending APEC’s 20th anniversary gathering, told the Foreign Correspondents Association of Singapore that protectionism remains a risk.
‘This is still a region that is dependent very much on trade and logistics systems and so when you get higher unemployment, you always have the risk of protectionism as well,’ he said.
US Chamber of Commerce chief Thomas Donohue urged APEC to fight ‘trade isolationism’ and lead the world in ‘jump-starting’ the Doha round of talks on a new global trade deal.
‘Expanding free trade across the Pacific can drive the global economic recovery, create badly needed jobs, and advance economic and social progress in developing and developed countries alike,’ Donohue said at a separate forum.
‘The United States, in particular, needs to get off the sidelines and embrace an ambitious trade agenda,’ he said.
But US President Barack Obama, who is among the leaders attending the summit along with China’s Hu Jintao, will struggle to get more trade pacts past a recalcitrant Congress.
In any case, a study commissioned by the Singapore-based APEC secretariat suggests that the impact of APEC membership has been just as beneficial as a formal free trade agreement in terms of driving down business costs.
‘This suggests that APEC members enjoy a significant degree of de facto integration even though APEC’s trade liberalisation process is non-binding,’ said a summary of the study by independent economists.
APEC’s members, which also include Australia, Canada, Japan and Russia, account for about 40 per cent of the world’s population, just over half its gross domestic product and roughly 44 per cent of global trade.
APEC finance ministers will meet separately on Thursday and are expected to call for lavish stimulus spending to be kept in place until the global economic recovery is secure.
The World Bank chief warned, however, that the accelerating recovery in Asia could trigger a new round of economic overheating and inflation, and said governments must unwind their stimulus injections with care.
Zoellick said there were signs in some countries of a ‘substantial’ rise in equity and property prices which could lead to asset bubbles—the very ingredients that triggered the global crisis in the first place.
Asia faces new risks of
overheating: WB chief
Agence France-Presse . Singapore
Asia’s rapid recovery from the economic crisis carries new risks of overheating, and governments must carefully unwind their huge stimulus injections, the World Bank chief warned Wednesday.
Robert Zoellick said there were signs in some markets of a ‘substantial’ rise in equity and property prices which could lead to asset bubbles—the very ingredients that triggered the global crisis in the first place.
‘In East Asia, if you start to get a strong rebound in growth, and you’ve got a lot of liquidity, there is the question of whether one could start to face asset bubbles in particular markets,’ he told the Foreign Correspondents Association of Singapore.
He said this was one reason why Australia had become the first industrialized nation to raise interest rates since the crisis erupted, but the response could differ among countries.
‘I think one of the questions here will be the timing of how they manage the interest rates and the risk that they could get some inflation and even asset bubbles which obviously, if they become a serious issue, could undermine confidence going forward,’ he said.
Zoellick said Asian governments must take care in winding down the multi-billion-dollar stimulus packages they implemented to ease the impact of the global downturn.
Most of the packages will run until next year, and governments must find a way to transition smoothly back to growth led by the private sector, he said.
‘A lot of the stimulus programmes, including the one in the United States, really don’t have their full effects until late this year and the first half of 2010,’ he said.
‘And so when that stimulus money has run its course, then the question will be, will the private sector rebuild demand?’
Zoellick was speaking on the margins of annual meetings of the Asia-Pacific Economic Cooperation (APEC) forum in Singapore, leading up to a summit this weekend of regional leaders including US President Barack Obama.
The APEC leaders are expected to say they will maintain their hefty stimulus packages until they secure a ‘durable’ recovery from the world’s worst slowdown since the 1930s, according to a draft communique seen by AFP.
China eyes Malaysia’s palm oil
Agence France-Presse . Kuala Lumpur
China’s President Hu Jintao presided over the signing of a raft of deals with Malaysia Wednesday and indicated an interest in its vast palm oil and timber sectors.
Hu, who is wrapping up a two-day official visit, and Malaysian prime minister Najib Razak witnessed the signing of five agreements and the awarding of a major infrastructure project to a Chinese firm.
Malaysia’s Bank Negara and the China Banking Regulatory Commission signed a deal to increase cooperation in banking supervision, in what finance officials said was a likely prelude to China being granted a banking license here.
‘Today’s signing ... will open a new era of cooperation in the financial sector between the two countries,’ Najib said as the two leaders addressed the media.
‘This is very meaningful in view of the current global challenge as well as our goal to deepen integration of our two economies,’ he added.
The other four deals include plans to cooperate in the education sector and in the sewerage services industry, and a loan agreement for the construction of a bridge in northern Penang state.
Najib said that Hu, whose country has an insatiable demand for natural resources to fuel its economic expansion, indicated an interest in Malaysia’s vast palmoil and timber sectors.
‘President Hu remarked about China’s intention to increase the amount of trade with respect to palmoil and Malaysian timber,’ he said, without giving further details.
Najib said Malaysia would award a major infrastructure rail project in southern Johor state to a Chinese company, but gave no further details.
News reports have said that the double-track rail project would be worth about 7.5 billion ringgit (2.2 billion dollars) and built by a consortium of China Railway Engineering Corporation and China Railway Telecommuni-cation Centre (CRET).
CORPORATE NEWS
Bank Asia opens SME service
centre at Sirajdikhan
Business Desk
Bank Asia’s first SME service centre was inaugurated at Sirajdikhan Bazar in Munshiganj on Wednesday.
The bank opened the centre with a view to promote small and medium enterprises in the area, said a news release.
A Rouf Chowdhury, director of Bank Asia, inaugurated the centre. Md Daudul Islam, UNO, Sirajdikhan and Md Mohiuddin Ahmed, upazila chairman, were present as special guests.
Vice-chairman of the bank AM Nurul Islam and president and managing director Erfanuddin Ahmed, among others, were present.
AIG CEO ready to quit
Associated Press . New York
After just three months as head of battered insurer American International Group, Robert Benmosche has threatened to leave his post as he struggles to deal with heavy government oversight and restrictions on what the bailed-out company wants to pay employees, according to a published report.
Citing unnamed people familiar with the matter, The Wall Street Journal reported online late Tuesday that Benmosche told AIG’s board he was ‘done’ with the job, although he reportedly is reconsidering his stance in the face of the board’s dismay.
According to the people, the former MetLife CEO is frustrated with the constraints of leading a company majority-owned by the government, the paper said. The Journal said Benmosche has complained to AIG’s board about the outcome of the Treasury Department’s pay review which slashed pay for a number of AIG executives by 91 per cent from 2008.
When the credit crisis hit last year, the U.S. government rescued AIG from the brink of collapse with a loan bailout package worth up to $182.5 billion in exchange for an 80 per cent stake in the insurer. It is one of seven big companies the Treasury Department ordered to cut top executives’ salary and bonuses in half, starting this month. Under the plan, cash salaries for the top 25 highest-paid executives will be limited in most cases to $500,000 and, in most cases, perks will be capped at $25,000.
For the already struggling companies, the plan has introduced concerns about so-called brain drain, as the executives targeted by ‘pay czar’ Kenneth Feinberg rank among the most talented and productive at their companies.
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