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RMG buyers urged to be
ethical in sourcing

Staff Correspondent

Both the garment exporters and labour leaders on Wednesday urged global buyers to be ethical in sourcing, and to give orders to those garment factories which comply with the rules of the buyer country. Such compliance, they pointed out, is a precondition for the sustainable growth of the readymade garment sector in the country.
   Participants in a roundtable of the representatives of buyers, manufacturers and workers also agreed that only the joint efforts of the stakeholders could improve the compliance situation in Bangladesh’s RMG sector.
   Commerce minister Faruk Khan inaugurated the roundtable organised by the BSCI-Business Social Compliance Initiative. It was moderated by the daily Kaler Kontho’s editor, Abed Khan.
   The London-based BSCI, in partnership with major retailers and other stakeholders of the RMG sector, works to improve the working conditions in factories worldwide, and Bangladesh, having a large RMG sector, is prominent in its agenda.
   ‘Please practise ethical sourcing as that will help both the workers and industry,’ Roy Romesh Chandra, a leading trade union leader who is affiliated with the Awami League, told the buyers.
   Roy pointed out that the Bangladeshi garment manufacturers, who concentrate on cheap apparels, always say that the falling prices of garments force them to pay meagre wages to the workers.
   Dr Wazedul Islam of the left-leaning Bangladesh Trade Union Centre said that the country’s garment workers’ standard of living has remained unacceptably low for decades despite their undeniable contribution to the country’s prime export sector.
   ‘Besides ensuring adequate wages for the workers, the garment sector should ensure other benefits for them including provident fund and health facilities,’ said Dr Wazed.
   Garment exporters complained that continuous reduction of the prices they receive for their products ultimately results in poor wages and deprivation of the workers.
   ‘It is not fair that you [buyers] continue to slash the prices of garments and at the same time continue to pressure us to improve the compliance situation in our factories,’ said Dr Mohammed Abdul Moyeen, a director of the Bangladesh Knitwear Manufacturers and Exporters Association.
   Dr Moyeen, who also teaches in the business faculty of the University of Dhaka, pointed out that the joint initiative of the buyers, suppliers and factory owners can simultaneously improve the workers’ standard of living and increase productivity.
   The Bangladesh Garment Manufacturers and Exporters Association’s president, Abdus Salam Murshedy, said that different sets of compliance imposed by different buyers often raise the cost of production.
   Commerce minister Faruk Khan said that improving the relationship between owners and workers is essential for ensuring sustainable growth of the RMG sector.
   He said that since the RMG sector employs the greatest number of workers and earns the lion’s share of Bangladesh’ export revenue, the government is always ready to do anything possible to improve the compliance situation in the apparel factories.


Bangladesh eyes Vietnam, Malaysia
to import oil

Reuters/Bdnews24.com . Dhaka

Bangladesh will meet its additional oil demand through imports from Vietnam and Malaysia along with existing sources like Kuwait, Saudi Arabia, India and United Arab Emirates, a senior official said on Tuesday.
   Bangladesh will have to increase its oil import by more than 37 per cent to 4.8 million tonnes as the government plans to run several power plants fuelled by diesel and furnace oil to generate more than 1,350 megawatts of electricity.
   ‘We received a proposal from Vietnam and are negotiating with Malaysia to meet our increased oil demand by the middle of next year,’ Anwarul Karim, chairman of the Bangladesh Petroleum Corporation, told the news agency.
   State-run BPC is the sole importer and distributor of oil in Bangladesh, which consumes up to 3.5 million tonnes of oil every year at a cost of between $2.5 and $3.5 billion.
   Karim said the Vietnam National Oil and Gas Group Petro Vietnam had already proposed to supply fuel to BPC, and ‘we will sit with them to fix the rate of premium and other conditions.’
   ‘We are also negotiating with a number of oil exporting companies including Malaysian national oil company Petronas.’
   The BPC will also negotiate with state-run Kuwait Petroleum Corporation this month for a new deal after the expiry of the existing deal which will end in December this year and increase the volume of oil import.
   Officials said state-run Bangladesh Power Development Board would allow 18 plants to run on diesel and furnace oil to generate up to 1,350 mw of electricity which would require the import of an addition of nearly 1.3 million tonnes of fuel.


BPC to negotiate oil import
deal with KPC

Staff Correspondent . Chittagong

Bangladesh Petroleum Corporation is likely to strike a fresh deal with Kuwait Petroleum Corporation to import fuel for the year 2010, BPC officials said.
   A 3-member team of the KPC is expected to arrive here on October 28 to hold talks for the deal with the BPC, they said.
   ‘We want to have a new agreement with the KPC for importing petroleum products for the coming year. We will have to negotiate with the KPC team in this regard.’ said a senior official of the BPC, requesting anonymity.
   The KPC team during its visit is expected to negotiate premium and quantity of fuel before striking the final deal, he added.
   The BPC annually imports 3.8 million metric tonnes of fuel from abroad and the KPC is a major supplier. But the BPC has alternative sources as well to reduce its dependence on the KPC.


Kuwait Airways to fly from Ctg
Staff Correspondent

Kuwait Airways will start flights from Chittagong to 38 destinations from October 30.
   The national carrier of Kuwait will fly two flights in a week — Friday and Sunday — departing at 5:35am from the port city.
   ‘Chittagong has enormous commercial potential. This new venture will enable us to offer regular passengers and cargo services with the only wide bodied foreign carrier to various cities around the world,’ said Kuwait Airways sales manager (passenger) Samiur Razzak at a news briefing in a city hotel on Wednesday.
   He said, ‘I think Chittagong will be transformed and developed with a direct link into the Gulf Cooperation Council and convenient connections onwards to USA, Europe and Africa and will be invaluable both for attracting direct investment into the country and for businesses and services in Bangladesh to prosper.’
   ‘We also hope to see the tourism industry to flourish,’ he said.
   Samiur said airbus 300 and 310 would be used for the Chittagong flights.
   He said, ‘To launch this new venture, the airline has chosen Jafar Alam, award winning Bangladeshi surfer, as brand ambassador.’
   ‘We have a plan to increase flights from the port city in the next summer session of the airline,’ he added.
   Kuwait Airways, established in 1954, started its Dhaka operation with one flight per week from 1981 and daily flights from Dhaka from September 2006.


Climate change cuts rice consumption
Bangladesh agriculture facing serious
threats, experts tell workshop

Staff Correspondent

Climate change, which has posed serious threats to agriculture and livelihoods, reduces rice consumption by 8 kilograms per head a year in countries like Bangladesh and further affects the food chain, especially by depleting the number of animals and fish eaten by humans, say agriculture experts.
   The country may even experience 13-17 per cent loss in crop production due to the multifarious effects of global warming, apart from the phenomenon’s threats to livestock and fisheries resources, a consultative workshop on ‘Climate Change Impacts on Agriculture and Food Security’ was told on Wednesday.
   Also factors such as shrinking farmland, increasing land fragmentation, limited diversification and declining profitability of the farm sector are already found to have been constraining Bangladesh agriculture and causing more suffering to Bangladeshi farmers.
   However, the experts pointed out, Bangladesh has a huge potential of increasing the productivity of crops, fisheries and livestock despite climate change effects if the right policies are followed. Bridging the yield gap, scaling up farmers’ management practices and bringing fallow land under cultivation may help increase productivity, they added.
   The Ministry of Agriculture and the UN Food and Agriculture Organisation jointly organised the consultative workshop to take stock of the latest climate change effects on Bangladesh’s agriculture before the World Food Conference and Copenhagen Conference on climate change.
   ‘Climate change reduces about 8kg per capita rice consumption with large reduction in food from animal and fish origins,’ Z Karim, an agriculture expert and former secretary, noted at the workshop held at the CIRDAP auditorium.
   Average water salinity increased over 172 per cent almost in all places from the 1980s and more than 1.7 lakh hectares of land have already been affected by salinity, said Karim while speaking about the implications of climate change.
   Mahbub Hossain, executive director of the BRAC, suggested that the country must increase food production at a rate faster than 1.5 per cent, which is the rate of population growth. ‘We have to make surface water available and reduce dependence on irrigation,’ he insisted.
   In this context, food and disaster management minister Abdur Razzaque stressed the need for increasing efforts for adaptation of agricultural systems to new conditions in order to preserve and promote the resilience of the rural economy.
   He mentioned that the government would need $5 billion in the next five years for investment to enable the country to cope with the effects of climate change.
   Agriculture minister Matia Chowdhury welcomed external assistance, not dictation, in supporting the government’s efforts to address the impacts of climate change. ‘For large-scale programmes, we need foreign assistance as our challenges are many,’ she said.
   ‘The population of Bangladesh and those of the developing world are the victims of the escalating hazards that they are not responsible for,’ said the FAO’s representative, Ad Spijkers, while calling for intervention and investment to strengthen efforts for ensuring food security and improving agricultural governance.
   ‘Almost half of Bangladeshis are far from being food secure because of extreme poverty and vulnerability to the shocks of calamity,’ said Caterina Batello, an official in the FAO headquarters in Rome, and acknowledged that international support was essential to meet the additional costs of ensuring mitigation of climate change’s impacts.


Local co to invest $3.960m
in Iswardi EPZ

Business Desk

A Bangladeshi company will invest US$ 3.960 million in Iswardi Export Processing Zone to set up a chemicals limited, said a press release.
   The 100 percent local owned company, German Euro chemicals limited, will produce chemicals for textile industries.
   The company will also create employment opportunity for 121 Bangladeshi nationals.
   An agreement, to this effect, was signed between the Bangladesh Export Processing Zones Authority and German Euro Chemicals Ltd in BEPZA complex on Wednesday.
   Md Moyjuddin Ahmed, member (investment promotion), of BEPZA and Md Tarif Uddin, managing Director of German Euro chemicals Ltd, signed the agreement on behalf of their respective organisations.


NIDB opens Dhaka branch
Business Desk

The Nautical Institute Dhaka Branch hosted a technical seminar and its branch opening ceremony at the Hotel Radisson in Dhaka on Monday.
   NIDB is a branch of the Nautical Institute, UK, an international institute of over 7000 members in 110 countries.
   It is an independent organization which promotes nautical studies, safety at sea, education and research.
   A key role of the institute is to provide consultation and technical input into government policies involving maritime education and safety.
   The Nautical Institute has gained consultative status as an NGO at the International Maritime Organisation, an organ of the United Nations.
   Shipping secretary, director general of the shipping department the attended programme.
   The speakers congratulated the Nautical Institute members in Dhaka for this commendable initiative to promote the nautical profession.
   Other speakers spoke on Bangladesh’s international obligations arising from IMO conventions, maritime education and training in Bangladesh and the issue of criminalisation of seafarer.
   Philip Wake, the Chief Executive of the Nautical Institute, UK, congratulated all the members on the occasion of the Branch Opening and called for active participation and involvement in the Institute’s affairs.
   The ceremony was attended by dignitaries from civil and naval maritime communities, government officials and members of the media.


Weekly tea sale sees modest
price trend

Bangladesh Sangbad Sangstha . Chittagong

The weekly tea sale held in Chittagong on Tuesday witnessed a modest market trend following the active participation of local and foreign buyers.
   According to the market sources, well-made good liquoring categories were well competed for and were dearer. Other varieties also sold well but often at slightly easier rates.
   Blenders were operating quite strongly with some interest from the loose tea buyers. There some inquiries from Pakistan.
   Dusts were again a stronger market, particularly the better liquoring varieties.
   The details of the market reports are as follows:
   CTC Leaf: 24,221 packages and 91 packages of old season on offer met with a good demand at generally firm rates.
   Brokens: Well-made good liquoring brokens were again a strong market and were occasionally dearer following competition and these could be quoted between Tk 139 and Tk 142. The remainder also met with a fairly good demand but were often easier by Tk 1 to Tk 2 over last.
   Fannings: Well-made good liquoring fannings were a strong market and were occasionally dearer and these could be quoted between Tk 140 and Tk 144. Other varieties were mostly firm.
   CTC Dust: 3.411 packages on offer again met with a strong demand at mostly dearer rates. Good liquoring varieties met with a strong competition and were a dearer market, particularly the CDs.
   All other sold at around the last levels with the plainer liquoring varieties easing slightly. Blenders lent more support. There was selective export inquiry for the best varieties.


Dollar mixed in Asia
Agence France-Presse . Tokyo

The dollar was mixed in Asia Wednesday as investors braced for the start of the third-quarter earnings season in the United States, hoping for signs that global demand is picking up, dealers said.
   The dollar dropped to 88.67 yen in Tokyo afternoon trade from 88.82 in New York late Tuesday. The euro slipped to 1.4698 dollars from 1.4715 and to 130.31 yen from 130.72 yen.
   Investors' eyes were turned to US mining giant Alcoa, whose earnings results were due out later in the day, kicking off the US corporate earnings season.
   The US earnings results would be key to determining whether 'lofty' stock valuations following Wall Street's six-month powerful rally are justified, said Calyon currency analyst Mitul Kotecha.
   US stocks have generally been resistant to bad news in recent weeks, including a surge in job losses in September.
   'The main casualty of all of this is the dollar which will continue to be hit both from a yield and risk appetite perspective,' said Kotecha.
   In regional Asian trade, the dollar rose to 1,170.50 South Korean won from 1,167.40 a day earlier, to 1.4016 Singapore dollars from 1.4008, and to 32.17 Taiwan dollars from 32.11.


CORPORATE DISCLOSURES
Purabi General Insurance
placed in ‘A’ category

Business Desk

Purabi General Insurance will be placed in 'A' category from existing 'Z' category with effect from today as the company reported disbursement of stock dividend at 10 per cent for the year 2008.
   
   Apex Weaving
   In response to a DSE query dated 06.10.09, the company has informed that there is no undisclosed price sensitive information of the company for recent unusual price hike.
   
   Mithun Knitting
   In response to a DSE query dated 06.10.09, the company has informed that there is no undisclosed price sensitive information of the company for recent unusual price hike.
   
   Meghna Condensed Milk
   The SEC has issued show cause cum hearing notice to the company, its directors, managing director and company secretary for non-compliance with securities related laws in connection with audited financial statements for the year ended on June 30, 2008.
   
   BLTC
   The SEC has issued show cause cum hearing notice to the company, its directors, managing director and company secretary for non-compliance with securities related laws in connection with audited financial statements for the year ended on December 31, 2007.
   
   The Ibn Sina
   In response to a DSE query dated 06.10.09, the company has informed that there is no undisclosed price sensitive information of the company for recent unusual price hike.
   
   Delta Brac Housing Finance Corp Ltd
   Trading of the shares of the company will remain suspended today for record.
   
   Jamuna Oil Company Limited
   In response to a DSE query dated 04.10.09, the company has informed that there is no undisclosed price sensitive information of the company for recent unusual price hike.
   
   Golden Son Ltd
   In response to a DSE query dated 06.10.09, the company has informed that there is no undisclosed price sensitive information of the company for recent unusual price hike.
   
   Eastern Lubricants
   In response to a DSE query dated 06.10.09, the company has informed that there is no undisclosed price sensitive information of the company for recent unusual price hike.
   Source: DSE


IMF faces rough road towards
bigger role

Agence France-Presse . Istanbul

The IMF gained new stature as global lender at annual meetings with the World Bank in Istanbul that ended on Wednesday, but is on a rough road between a fragile economic recovery and dissension among members.
   The finance chiefs from the 186 member nations of the institutions agreed after two days of talks on a broad mandate to build a lasting recovery from the worst crisis since the Great Depression.
   But they said the nascent global recovery was considerably weak and could stall as unemployment surges and serious strains remain in the financial system.
   Divisions were evident over the International Monetary Fund’s ambition to become a ‘new IMF’—the global lender of last resort and watchdog of the Group of 20 largest economies’ plan to build sustainable growth.
   ‘This annual meeting may be the starting point of a new IMF, and you may say later when you will be talking with your grandchildren that you were in Istanbul at this time,’ IMF managing director Dominique Strauss-Kahn said.
   The IMF’s policy-steering committee asked the fund to address four key reform areas—the IMF’s mandate, its financing role, multilateral surveillance, and governance. This included a shift of at least 5.0 per cent in voting power to under-represented countries as recommended by the Group of 20 largest rich and emerging countries.
   Strauss-Kahn said these ‘Istanbul Decisions’ would be a focal point for the coming year. ‘We have come a long way, but the journey is not over,’ he told delegates.
   ‘The credibility of the fund still is precarious,’ said Carlos Quenan, an expert at the Institute of the Americas in France.
   ‘It certainly has bolstered its fire-fighter role as the only international institution that can deliver aid,’ Quenan said in an interview.
   ‘But nevertheless it remains unclear what will be the conditionality on the new loans and how voting power will be shifted to give emerging countries more weight and thus gain better credibility,’ he added.
   Currency frictions stalked the meetings as the weak dollar and the yuan, which the IMF says is undervalued, highlighted the so-called global imbalances blamed for fuelling the crisis.
   Americans’ credit-fuelled consumption of Chinese-made goods built up a huge trade deficit with China, and Beijing’s export-led growth model has allowed China to amass more than two trillion dollars in reserves, mostly in dollars.
   The United Nations called for a new global reserve currency to end dollar supremacy, which it said had contributed to global imbalances.
   Top UN official Sha Zukang said that ‘greater use of a truly global reserve currency, such as the IMF’s special drawing rights,’ the fund’s international reserve asset, would benefit global development.
   Strauss-Kahn urged the delegates to build on the spirit of economic cooperation at last month’s G20 Pittsburgh summit and ‘seize this opportunity to shape the post-crisis world’ and reduce poverty.
   He said the fund could need more than a trillion dollars in financing from its members to function as a bank of last resort that would reduce the need for countries to build big reserves as a cushion against shocks.
   Germany, Europe’s biggest economy and a G20 member, balked, saying a massive increase in the fund’s reserves could encourage governments to adopt risky economic policies in confidence that they could get bailed out if they failed.
   ‘Moral hazard issues... arise from the vast increase in fund resources that is currently taking place. This increase should be viewed as a temporary measure,’ German central bank chief Axel Weber said.
   The World Bank appealed for more funds as it sees a second straight year of record lending to developing and poor countries.
   ‘As we start to get towards the middle of next year, we are going to start to face some serious constraints, and we would have to ration and obviously focus on the lowest-income countries,’ said World Bank president Robert Zoellick.
   Policy-makers approved the first general capital increase for the World Bank in 20 years as the crisis was expected to force as many as 90 million more people into poverty by 2010.


Caution cools Hong Kong IPO frenzy
Agence France-Presse . Hong Kong

Three more firms will list on the Hong Kong stock exchange Thursday, but analysts warned that cooling economic optimism and overpricing has been responsible for a series of disappointing debuts.
   Companies forced to shelve their listing plans after the US financial crisis set in had been tempted back by a rally of about 80 per cent since early March on the benchmark Hang Seng index.
   But amid signs the US economy is not picking up as quickly as previously thought, that optimism is tailing off, just as dozens of Hong Kong firms are preparing to launch their IPOs.
   The three firms listing Thursday—Ausnutria Dairy, China Vanadium Titano-Magnetite Mining and Yingde Gases—will be hoping they do not follow Shenzhen-based logistics firm China South City Holdings which dived 23 per cent.
   According to data company Dealogic, that debut last week was the worst ever on the Hang Seng for a listing over 50 million US dollars.
   In recent days there have also been disappointing showings from China’s Glorious Property, which sunk 14.5 per cent, and Peak Sport which fell 17.1 per cent.
   Engineering and construction firm Metallurgical Corp of China, Hong Kong’s biggest public offering this year, planned to raise up to 2.9 billion US dollars, but the stock lost 14.1 per cent on its launch last month.
   And despite rising 28 per cent on its Shanghai debut days before, it soon fell back to just a little above its listing price the day after.
   Eric Yuen, head of research at Dao Heng Securities, blamed aggressive pricing conceived at a time when the market was touching 2009 highs in September.
   ‘(Companies) took advantage of bullish market sentiment and many were priced at a premium to their competitors,’ he said.
   Private investors guided more by prevailing market sentiment than optimism about an individual company’s prospects also helped fuel inflated prices, analysts said.
   ‘The market had a huge run-up and a lot of retail investors bought into the hype,’ said Jackson Wong, vice president of Tanrich Securities.
   Wong, like other market watchers, expects companies listing later in the year to price their stocks more reasonably as a result.
   ‘Unless pricing has been at the realistic end of the range or there is something distinctive about the company, people are likely to be very cautious,’ said Howard Gorges, vice chairman at South China Securities.
   Recent results compare unfavourably with the heady days before the collapse of US investment bank Lehman Brothers last year. E-commerce firm Alibaba.com’s debut in November 2007 saw it surge 165 per cent.
   As hopes for a recovery grew this year, there were some successful debuts including Sinopharm Group and China All Access which as late as September gained 15.8 per cent and 13.1 per cent respectively.
   And shares in China State Construction Engineering Group soared 60.3 per cent on their July debut in Shanghai, as investors jumped on what was the world’s largest stock offering in 16 months at the time.
   Although optimism has faltered, companies with an established reputation such as casino business Wynn Macau, which starts trading Friday, are seen as stronger than some of the smaller, mainland companies with IPO plans.


HSBC in advanced talks on
buying RBS Asia assets

Agence France-Presse . Hong Kong

HSBC is in advanced talks to buy the Asian retail and commercial banking assets of Royal Bank of Scotland as a Standard Chartered bid for the lender has stalled over the price, a report said Wednesday.
   The discussions involve HSBC taking over RBS’s interests in China, India and Malaysia, the Wall Street Journal quoted an unnamed source close to the situation as saying.
   ‘RBS is in on-going discussions with bidders for the remaining assets it has decided to sell in Asia and will make further announcements, as appropriate, in due course,’ RBS spokeswoman Yuk Min Hui was quoted by the paper as saying.
   HSBC and Standard Chartered were unavailable for comment.
   The news comes after the Financial Times last month said that plans by RBS to sell its Chinese assets to Standard Chartered had run into problems and looked set to fail.
   It also follows comments by HSBC head Michael Geoghegan that he planned to delay any rush to expand the bank because of concerns there will be a second economic downturn in the coming months.
   RBS is majority-owned by the British government after being ravaged by the credit crunch.
   Caption People walk into the London headquarters of Britain’s state-controlled Royal Bank of Scotland (RBS). HSBC is in advanced talks to buy the Asian retail and commercial banking assets of Royal Bank of Scotland as a Standard Chartered bid for the lender has stalled over the price.


Google widens lead over Bing, Yahoo!
Agence France-Presse . San Francisco

Experian Hitwise on Tuesday reported that Bing and Yahoo! online search engines lost ground in the United States in September while Google inched ahead slightly.
   Google handled 71.08 per cent of all US Internet searches in the four weeks ending October 3, while Yahoo! and Bing accounted for 16.38 per cent and 8.96 per cent respectively, according to Hitwise.
   Ask.com was the biggest winner, with its share of US searches climbing 8 per cent to 2.56 per cent in September as compared with August.
   Microsoft’s Bing saw its share of the US online search market dip 5 per cent in the month-to-month comparison, while the number of searches at Yahoo! was down 3 per cent, Hitwise reported.
   Google last week rolled out search engine refinements as Microsoft continues an aggressive campaign to lure people to Bing.
   The Internet giant’s modifications include tools that let people limit online searches to only serve up results from the past hour, or by specific date ranges.
   Google users can choose to be shown search only results from blogs, news, or Web pages that they have visited or those they haven’t visited.
   The Bing search engine Microsoft launched in May was designed to intuitively understand what people are seeking on the Internet and challenge online king Google.
   The US software colossus described Bing as a ‘Decision Engine’ aimed at online shoppers trying to make buying decisions, plan trips, research health matters or find local businesses.
   Bing posted a slight increase in its share of the US search market in August, a third month in a row of modest gains, according to online tracking firm comScore.
   Yahoo! and Microsoft, after months of negotiations, unveiled a 10-year Web search and advertising partnership in late July that set the stage for a joint offensive against Google.
   Under the agreement, Yahoo! will use Microsoft’s search engine on its own sites while Yahoo! will provide the exclusive global sales force for premium advertisers.
   Microsoft is integrating messages from prominent users of wildly popular micro-blogging service Twitter into results generated by Bing.


Europe hits hole on rough road
to economic recovery

Agence France-Presse . Brussels

Europe hit a recovery setback on Wednesday with the eurozone economy shrinking more than expected, giving substance to widespread warnings that talk of a rapid global turnaround might be overdone.
   But the surprise revised results also showed some countries emerging from recession.
   The increasingly upbeat mood accompanying results since the summer was punctured by EU data showing that the economy of the 16-nation eurozone shrank in the second quarter by a greater margin than initially thought.
   Gross domestic product down by 0.2 per cent compared to the first three months of the year—and twice the initial estimate—was reflected across the 27-nation EU as a whole, where the fall was 0.3 per cent.
   Ireland’s battered economy produced returned to break-even point after steep contraction and the Czech Republic achieved 0.1 per cent growth after shrinking by a massive 4.8 per cent in the first quarter of 2009 — offering relief to political leaders seeking to pressure Prague into signing the long-delayed Lisbon Treaty,
   Greece, Poland and Portugal also returned to growth, and the EU’s Eurostat agency’s second estimate for Britain also showed a slight improvement predicting a contraction of 0.6 per cent.
   But the annual rate of decline also crept back upwards to 4.8 per cent with the fifth quarter running of falling economic output for the area.
   Global financial leaders have been at pains in recent weeks to warn that recovery from the global crisis is likely to be uneven and unsteady, and that for most people will be masked by a rise of unemployment figures in leading industrialised countries.
   This tempering of signs that recovery is under way was echoed at the annual meetings of the International Monetary Fund and World Bank in Istanbul this week.
   The revised eurozone figure ‘does not materially change the picture,’ said chief IHS Global Insight analyst Howard Archer, referring to marked improvement on the record 2.5-per cent plunge in the first three months of the year.
   ‘It still seems likely that the region returned to growth in the third quarter, albeit modest,’ he added.
   ‘Government spending and significantly positive net trade were the major factors in limiting the rate of contraction, while consumer spending edged up.
   ‘We expect eurozone GDP to have grown by around 0.3 per cent quarter-on-quarter in the third quarter.
   ‘Nevertheless, serious doubts remain about longer-term eurozone growth prospects given high and rising unemployment, still significant financial sector problems and a reluctance of banks to lend.’
   He said more ‘pressure on governments to withdraw fiscal stimulus as soon as possible and then tighten fiscal policy significantly in order to rein in ballooning public deficits’ was required.
   Nine more EU countries were hammered on Wednesday by the European Commission for deficits Brussels says are spinning out of control.
   Given record unemployment running to more than 15 million people, the data tempers somewhat optimism that Europe’s worst post-war recession is coming to an early end.
   For the entire 27-nation EU, GDP fell 0.3 per cent in the second quarter, slightly worse than the 0.2 per cent estimate first given. The annual rate of decline was 4.8 per cent.
   Exports fell by 1.5 per cent in the eurozone and 1.7 per cent across the EU, again worse than anticipated.
   Domestic consumption rose 0.1 per cent in the eurozone, a slight drop from the previously-released data but still a sharp improvement after a slide of 0.5 per cent in the first quarter.
   Analysts expect the European Central Bank to keep its benchmark interest rate at its historic low of 1.0 per cent on Thursday as deflation fears subside and the 16-nation economy shows signs of recovery.


Microsoft unveils line of
Windows phones

Agence France-Presse . Paris

Microsoft chief Steve Ballmer on Tuesday unveiled his company’s line of Windows smartphones in an offensive against Apple’s iPhone and Google’s Android system.
   Around 30 types of ‘Windows phones’ with various designs will be available by the end of the year in more than 20 countries.
   Seven phone-makers, including Sony, Samsung and Toshiba, and 16 operators including Orange, Vodafone and T-Mobile, are involved in the launch.
   The phones, which combine the ability to make calls, surf the Internet and view videos, carry Microsoft’s Windows Mobile 6.5 operating system.
   ‘We have done a lot of work on the user interface, we simplified the user interface,’ Ballmer told a news conference at Microsoft’s new French headquarters near Paris in Issy-les-Moulineaux.
   ‘We have taken the Internet Explorer browser technologies, and we rebuilt them for the first time for these Windows phones. So you can get the same experience on these phones that you will get on your windows PC,’ he said.
   The new mobile operating system was launched simultaneously in France and New York on Tuesday.
   With Tuesday’s launch Microsoft hopes to reassert itself on the smartphone market, where it has lost ground. The sector is considered especially promising, with 29 per cent jump in sales expected this year.
   But in the second quarter only 9.0 per cent of all smartphones sold were equipped with Microsoft’s operating system, against 12 per cent a year earlier, according to the Gartner research group.
   At the same time, Apple’s iPhone has seen its share jump from 2.8 to 13.3 per cent.

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