Global investors are expected to scale back their activities almost 30 per cent overall in 2009, but a recovery should begin ‘slowly’ in 2010, the UN’s trade development mission said on Thursday.
    ‘Global FDI (foreign direct investment) prospects are set to remain gloomy in 2009, with inflows expected to fall below 1.2 trillion dollars’ (0.8 million euros), the UN Conference on Trade and Development said in a report.
    ‘However, recovery of these flows is expected to begin slowly in 2010 to reach up to 1.4 trillion dollars, and will gain momentum in 2011 when the level could approach an estimated 1.8 trillion — almost the same as in 2008.’
   Foreign direct investment reached a record in 2007, before falling back in 2008 to 1.7 trillion dollars in the financial crisis.
   While the fall in investment in developed countries was compensated for by growth in Africa, Asia, Latin America and the Caribbean, southeast Europe and ex-Soviet states in 2008, all regions are expected to post declines this year.
   In Africa, FDI rose to a record 88 billion dollars in 2008. But it will in 2009 post its first year of decline after five consecutive years of growth.
   Even in Asia, where FDI rose by 17 per cent to a record 298 billion dollars in 2008, investment flows are expected to decline.
   Likewise in Latin America, FDI grew 13 per cent to 144 billion dollars in 2008, but is set to slide this year.
   Upon the pickup, however, it is the emerging giants as well as the United States which are expected to drive the growth.
    ‘The United States, along with China, India, Brazil and the Russian Federation are likely to lead the future FDI recovery,’ said UNCTAD.
   Meanwhile, industries that are less sensitive to business cycles and which operate in markets with steady demand, such as agriculture, are likely to be the ‘engine for the next FDI boom.’
   UNCTAD also forecast a wave of mergers and acquisitions in the years ahead as governments offload their stakes in ailing industries when the global economy recovers.

The budget implementation monitoring meeting will begin on October 4 to oversee the progress of the budget implementation of all ministries and departments, a pre-requisite of the newly introduced Public Finance and Budget Management Act 2009.
   The finance ministry for the first time has arranged the budget monitoring meeting as part of the new exercise to ensure proper implementation of the annual budget, official sources said Thursday.
   ‘We will hold meeting with different ministries and division in phases. The first meeting will be held with the energy division on October 4,’ a senior official of finance ministry said.
   Sources said the finance ministry will hold meeting with the 39 ministries and divisions till the middle of the next month.
   The government took an ambitious development programme this fiscal year, but could spend only 2 per cent equivalent to nearly Tk 482 crore of the total allocation in the first month.
   The implementation rate was below the expectation in consideration of a bigger annual development programme of Tk 30,500 crore, but was one per cent up compared to the implementation rate of the corresponding period of the last three years.
   The finance ministry has already prepared a list of 217 priority programmes in the current budget and has sent letters to the secretaries of the ministries concerned asking for quarterly budget progress report under the PFBM Act 2009.

Inter-bank call money rate crossed 12 per cent in some deals as pressure of last-minute cash withdrawal from banks reached its peak Thursday, last working day before Eid-ul-fitr, officials said.
   The overnight rate of interest for transactions among banks rose to 10 per cent Wednesday.
   The rate hovered around 8 to 9 per cent for most of the deals Thursday, but some cash-hungry non-bank financial institutions borrowed money at 12 per cent.
   ‘Call money rate jumped above 11 per cent during the last two days despite the central bank’s injection of fresh funds into the money market to meet surging demands for cash,’ a senior treasury official at a commercial bank told New Age.
   ‘Inter-bank money market transacted about Tk 550 crore on Thursday,’ he added.
   ‘We invested a total of Tk 446 crore in the call money market on Thursday,’ said M Abdus Salam, general manager of state-owned Sonali Bank, the largest player in the money market.
   Commerce banks borrowed money from Sonali Bank at 8 per cent interest while leasing companies were charged 9 per cent.
   Though Wednesday saw the maximum pressures with major commercial and official clients took money from banks to settle pre-Eid deals and pay staff allowances, banks had to keep clients standing in long queues on the last working day before office closed for five straight days for Eid.
   ‘We withdrew money in the first hour Thursday but later queues started growing longer at every private commercial bank branch,’ said Bazlul Hossain, a client of Eastern Bank Limited.
   Some clients were queuing at bank counters for new currency notes to give ‘Eid salami’ to children and others in the family.
   Rush for new notes led to a brawl at Bangladesh Bank counter among central bank officials and union leaders as all were showing off their power to change old notes for new ones before they rushed for homes on the last working day, insiders said.
   Most of the banks located at Motijheel, Dilkusha and other commercial places of the capital city witnessed daylong queues of people waiting to withdraw money before bank hours closed Thursday for five days.
   Meanwhile, the central bank issued a circular Thursday asking commercial banks to keep authorised dealer branches and land, sea and airport branches open on Saturday.
   ‘The demand for and circulation of money will ease as some strategic branches will remain open on Saturday,’ said Helal Ahmed Chowdhury, managing director of Pubali Bank.
   He said liquidities of some banks were under pressure due to huge withdrawal of cash from clients for Eid spending.
   Three state-owned commercial banks — Sonali, Agrani and Janata — are traditionally major players in the inter-bank money market.
   Among the private banks, Uttara, IFIC, Prime and National, are the major lenders.
   The call money market, which otherwise remains unnoticed throughout the year, makes headlines as it experiences a sharp rise in interest rates with banks and non-bank financial institutions crowding for cash to meet sudden surge in withdrawal before Eid festivals twice in a year.
   In past years, surging demand for cash raised the overnight rate even to 50 per cent.

The finance minister has defended the recent controversial appointments to board of directors in the state-run and specialised banks, saying that the government has picked up the competent people.
    ‘We have appointed some skilled people to the board of directors. Some of them are reputed as lawyers, teachers and economists,’ A M A Muhith told reporters at the Secretariat after an inter-ministerial meeting on land registration on Thursday.
   The finance minister’s comments came after allegations that the Awami League government has put party leaders, activists in board of directors.
   Recently, the government changed the board of directors of state-run banks Sonali, Janata, Agrani and Basic with the appointment of 24 new directors.
   The appointees include former MP Abdul Hye, Mahila Awami League’s forest and enviroment secretary Zannat Ara, former BCL vice-president Balaram Poddar, AL leader of UK unit Jakir Hossain, AL leader Abdus Sabur and AL deputy secretary for industry and commerce Nagibul Islam.
   The finance minister slammed former BNP government for appointing incompetent people to the board of directors.
    ‘They have appointed more peons to the board of directors,’ Muhith said
   Abdul Hye was made chairman of Basic Bank while Kazi Baharul Islam who is a former official of Sonali Bank got the charge of the same bank.
   AL election committee members–Kashem Humayun and Zannat Ara were made directors of Sonali Bank.
   Dr Abul Barakat, professor of economics at Dhaka University, was appointed chairman to Janata Bank while Balaram Poddar got appointed as a director.

The scheduled banks will remain open tomorrow (Saturday) for urgent transactions ahead of the Eid holiday.
   The Bangladesh Bank in a circular on Thursday said the banks could keep open their all or some selected branches with ensured security.
   The BB in a separate circular said Wednesday (September 23) will be a holiday if Eid is observed on Tuesday. But Wednesday will be a business day for all banks if Eid is observed on Monday, it said.

Stocks at Dhaka and Chittagong bourses gained on Thursday because of institutional buying on the last trading day before the stock markets’ going to a nine-day closure, said operators.
   The Dhaka Stock Exchange and the Chittagong Stock Exchange go to a closure from today (Friday) to September 26 on the occasion of Shab-e-Qadr and Eid-ul-Fitr as well as weekly holidays.
   Trading at the bourses will resume on September 27 as per regular trading schedule from 10:00am to 2:00pm.
   ‘The markets witnessed strong participation of institutional investors in the last two days as they bought shares to avail the lower prices of securities before the closure of the bourses,’ said Akter H Sannamat, managing director of Prime Finance and Investment, a merchant bank. ‘Markets also saw some retailers purchased shares on an expectation of good return after the vacation,’ he said.
   The DSE general index gained 14.69 points, or 0.48 per cent, to close at 3,058.80, while the CSE selective categories index advanced by 44.52 points, or 0.67 per cent, to finish at 6,716.42.
   Of the total 237 issues traded at the DSE, 152 advanced, 77 declined, and eight remained unchanged.
   Turnover to the DSE increased to Tk 581.11 crore from the Wednesday’s Tk 542.88 crore. CSE turnover increased to Tk 62.31 crore from Tk 48.02 crore.
   Aims 1st Mutual Fund topped the turnover leader with a total transaction of Tk 20.64 crore at the DSE.

Apollo Hospitals Dhaka has recently introduced Rapid Influenza Detection Test for patients with influenza like illness and pneumonia.
   This test can reduce the use of antibiotic, particularly in those with diffuse lung disease suspected of having severe pneumonia. The sample of the test will be respiratory specimens like swabs or aspirates from nose, throat and nasopharynx, a news release said.
   RIDT detects and distinguishes between influenza A and B viruses. The test will be performed for out patients from Saturday to Thursday from 8:00am to 5:00pm with a report delivery time of 2 hours within 5:00pm.
   ‘This test will give mental relief to flu patients by giving them a direction towards what type of flu they are suffering from,’ said Dr Shagufa Anwar, general manager, Business Development of Apollo Hospitals Dhaka, the release said.

Prime Islami Life Insurance Ltd has informed that it has credited the stock dividend for the year 2008 to the respective shareholders’ BO accounts.
   
   Al-Haj Textile
   The company has further informed that the Management has taken decision to extend the lay off of the factory for further 30 days ie from 20.09.09 to 19.10.09 as the situation has not been changed. If situation improves, lay off can be withdrawn.
   
   Rahim Textile
   Trading of the shares of the company will remain suspended on 27.09.09, as book closure will start from 29.09.09.
   
   Shahjalal Islami Bank Ltd
   Nasima Akhter, one of the sponsors of the bank, has reported her intention to sell 2,800 shares (bonus shares) out of her total holdings of 4,65,536 shares of the bank at prevailing market price through Stock Exchange within next 30 working days.
   
   Sonar Bangla Insurance Ltd
   The company has informed that the corporate office of the company will be shifted to its own space at ‘Paramount Heights’ (14th floor), 65/2/1, Box Culvert Road, Paltan, Dhaka-1000 with effect from 27.09.09.
   
   Islami Bank
   Muhammad Mosharraf Hossain, one of the sponsors/directors of the bank, has further reported that he has completed his sale of 300 shares of the Bank at prevailing market price through Stock Exchange as announced earlier.
   
   Asia Pacific General Insurance Co Ltd
   Woahida Pervin Happy, one of the sponsors/directors of the company, has reported her intention to sell 15,000 shares out of her total holdings of 16,350 shares of the company at prevailing market price through Stock Exchange within next 30 working days.
   
   Fareast Islami Life Insurance Co Ltd
   Tajul Islam, one of the sponsors/directors of the company, has reported his intention to sell 10,000 shares (bonus shares) out of his total holdings of 36,920 shares of the company at prevailing market price through Stock Exchange within next 30 working days.
   Source: DSE

Oil turned higher in Asian trade Thursday, boosted by a rise in equities markets on optimism over the global economic recovery, analysts said.
   New York’s main contract, light sweet crude for October overcame a bout of profit-taking earlier in the day to trade 17 cents higher at $72.68 a barrel in the afternoon.
   Brent North Sea crude for November delivery was up one cent at $71.68.
   Japanese share prices closed 1.68 per cent higher Thursday to lead the rise in Asian stock markets, tracking gains on Wall Street where stocks climbed to the highest level in 11 months on upbeat factory data.
   US industrial production jumped 0.8 per cent in August, the second straight monthly gain, the Federal Reserve reported Wednesday in a further sign of a reviving manufacturing sector.
   Overall industrial output gained for a second month in August after eight consecutive monthly declines.
   Analysts also said that a sharper-than-expected drop in US crude stockpiles was seen as an indication that oil demand was improving in the world’s biggest energy user.
   Data released Wednesday by the US Department of Energy showed the country’s crude stocks dropped by 4.7 million barrels in the week to September 11, beating analysts’ forecast for an average decline of 2.5 million barrels.

India reported a return to inflation Thursday as a result of soaring food costs fuelled by a bad monsoon and economists said they expected further sharp price rises.
   Inflation, which had been in negative terrain since June, rose 0.12 per cent for the week to September 5 after falling 0.12 per cent the previous week, according to the Wholesale Price Index, India’s most watched cost-of-living benchmark.
   The increase defied economists’ forecasts that the cost-of-living would fall by 0.1 per cent and came despite a strong year-ago base effect. Inflation stood at 12.42 per cent in the same week last year.
   The resurfacing of inflation, along with a still slowing economy despite ‘green shoot’ recovery signs, has confronted the central bank with a dilemma about when to take the first steps to tighten monetary policy to keep a lid on prices.
   The bank’s inflation target for the financial year to March 2010 is five per cent but economists say that looks increasingly in doubt.
   HSBC economist Robert Prior-Wandesforde forecast inflation would reach eight per cent this fiscal year, ‘posing a headache’ for the central bank.
   The weakest monsoon rains in years have sent food prices rocketing, leading to huge hardship for India’s poor masses. Chicken prices, for instance, rose 16 per cent and fruit and vegetables climbed eight per cent from the previous week.
    ‘It seems premature to be thinking about a near-term rate hike, particularly as the rise in inflation is commodity-driven rather than the result of a long period of strong demand,’ said Prior-Wandesforde.
   Some economists say the faster-than-expected inflation rise could prompt the central bank to start tightening monetary policy in coming months by such steps as siphoning off liquidity in the banking system.
   But they are unanimous in saying until an economic recovery takes hold, there will be no interest rate hikes. Most do not see a rate rise until April.
   Finance Minister Pranab Mukherjee called the inflation data ‘expected.’ He has forecast growth will slow in the second and third quarters before picking up in the final three months of the fiscal year to March 2010.
   He forecasts ‘six per cent plus’ growth this year, lower than the 6.7 per cent the country logged last year, and sharply down from the annual nine per cent levels it clocked during the three previous years.
   Bank lending ‘will have to improve for there to be signs of decisive economic revival,’ and for the central bank to harden monetary policy, said Dharmakirti Joshi, economist at Indian credit rating agency Crisil.
   Bank credit growth is running at 14.1 per cent, its weakest since April 2002 and far below the central bank’s forecast of 20 per cent for this fiscal year.
   Earlier this week, central bank governor Duvvuri Subbarao struck a hawkish tone, saying ‘inflation (in India) is a more urgent concern’ than elsewhere.
   At the same time, he said, ‘we will not exit from the accommodative monetary policy unless we are assured recovery is secure.’

China will keep its monetary policy loose until the end of 2010 to ensure growth due to uncertainties in the global recovery, Chinese media said Thursday, citing a senior central bank official.
    ‘The central bank will continue to maintain liquidity in the banking system to stimulate economic recovery,’ Su Ning, vice governor of the People’s Bank of China, was quoted as saying on the website of the Economic Observer newspaper.
    ‘Liquidity will continue to increase even if it may not expand every month. Some fluctuation in a certain month does not mean the central bank has changed its policy,’ he said, adding the policy would continue through 2010.
   Su’s remarks came amid market speculation that the central bank might hike the reserve requirement ratio for commercial banks in the fourth quarter of 2009 or the first half of next year, the report said.
   Su said maintaining stable growth remained a key task of the central bank as the global economy was unlikely to recover in the short term and consumer price growth in China was still negative, the paper said.
   Chinese lenders extended 410.4 billion yuan (60 billion dollars) in loans last month, rebounding from 355.9 billion yuan in July, indicating the government may not put as big a squeeze on credit as many had feared.
   Fears had been mounting in China that Beijing was looking to begin restricting lending, which reached 1.53 trillion yuan in June and a massive 7.4 trillion yuan in the first six months of the year.
   The Chinese economy grew 7.9 per cent in the second quarter after a 6.1 per cent expansion in the first three months of 2009, largely underpinned by a four-trillion-yuan stimulus package the government unveiled in late 2008.

He slams US-style globalisation as ‘the law of the jungle’, wants a return to the samurai spirit and laments a Japan ‘wrecked by free markets’ — meet Shizuka Kamei, Japan’s new banking minister.
   The 72-year-old leader of the People’s New Party — one of the ruling Democratic Party’s junior coalition partners — has been put in charge of supervising Japan’s vast financial services industry as well as postal affairs.
    ‘I will give all I have to rebuild a Japan that has been wrecked by market fundamentalism and free-market economics,’ Kamei told reporters late Wednesday after joining new Prime Minister Yukio Hatoyama’s cabinet.
   One of his first declarations was that he would seek to help small companies by allowing them a moratorium of several years on the repayment of loans — remarks that sent banking shares lower on the stock market.
   Kamei was a vociferous opponent of the outgoing Liberal Democratic Party’s privatisation of the massive postal system — the signature reform of former premier Junichiro Koizumi — and is expected to move to reverse it.
    ‘The fact that Japan’s leading opponent of postal privatisation is now the head of postal affairs suggests the privatisation process will almost inevitably be reassessed,’ Barclays Capital economist Kyohei Morita said.
   Kamei said Wednesday he did not aim to return to the past but to ‘try to rebuild the postal services in order to revitalise the local economies and help develop Japan’s society and economy in a robust manner.’
   Japan broke up its sprawling post office in October 2007, creating a new commercial bank with the world’s largest savings, starting a long privatisation process that was set to reshape the country’s finance industry.
   Under the privatisation plan, the banking and life insurance units were to be floated on the stock market sometime between 2010 and 2017, but that plan is now up in the air.
   Kamei was expelled from the long-ruling LDP in 2005 by Koizumi, who picked Internet entrepreneur Takafumi Horie to run against him.
   Kamei — a former top bureaucrat in the National Police Agency — set up his own party and beat Horie, who just a few months later was indicted for securities fraud. He was later sentenced to two and a half years in prison.
   Kamei, who witnessed the US nuclear bombing of Hiroshima in 1945, was once tasked with tracking the Japanese Red Army extremists who carried out a series of hijackings and violence on embassies abroad in the 1970s and 1980s.
   He is also an admirer of the Cuban revolution and has written a leaflet opposing the death penalty.
   In 2007, he backed former Peruvian president Alberto Fujimori’s bid to win a seat in Japan’s upper house of parliament while the ex-strongman was under house arrest in Chile.
   At the time Kamei suggested Fujimori was a victim of political persecution, describing him as the ‘last samurai’
   Fujimori was sentenced in April to 25 years in prison for human rights abuses committed during his reign in the early 1990s.
   On his website (www.kamei-shizuka.net), where he welcomes visitors with rousing songs, Kamei exalts Japan’s egalitarianism and sense of pride, blaming US-style globalisation for creating ‘the law of the jungle.’
   He says he wants to ‘revive the beautiful and powerful Japan where arts and culture are integrated with industry and to work hard with the samurai spirit towards the happiness of all living things.’
   But he hasn’t won everyone over.
   Hatoyama’s cabinet line-up ‘leaves little doubt that Japan is about to take a giant economic step backward in both economic and financial policy,’ Jesper Koll, president of Tantallon Research Japan, wrote in the Wall Street Journal.
   Bank of Tokyo-Mitsubishi UFJ analyst Naomi Fink said that with an initial public offering of the postal operator now off the agenda she was downgrading her outlook for the Nikkei in fiscal 2010 to 9,000 points from 14,000.
   The Nikkei-225 index ended Thursday at 10,443.80 points, up 173.03 points, or 1.68 per cent, from the previous close.
   But banks shares remained weak. Mitsubishi UFJ Financial shed 1.9 per cent to 516 yen and Sumitomo Mitsui Financial slid 5.6 per cent to 3,360 yen.

US President Barack Obama does not believe G20 states should slap limits on executive pay, an official said Wednesday, as Europe readied a call for ‘sanctions’ against banks that shell out billions on bonuses.
   A week before Obama hosts the next G20 summit of top economic powers and developing nations in Pittsburgh, a senior administration official said the talks would likely produce a compromise ‘set of principles’ on the issue.
   The summit will take place a week after Obama lashed out at executives of finance firms during a speech on Wall Street, warning them not to further squander public trust by awarding themselves huge 2009 bonus payments.
   But despite his tough stance, Obama still does not favor a hard cap on bonuses, Mike Froman, deputy national security advisor for international economic affairs, told reporters.
    ‘The president feels very strongly about executive compensation and shares the concerns about executive compensation practices.
    ‘We’ve done a lot here... and my sense is that the G20 is likely to discuss (it) given the interest of its members in it and come up with an agreement on a set of principles around that going forward,’ Froman said.
    ‘The president has been pretty clear that he supports a robust approach to executive compensation but has been reluctant to sort of set individual compensation levels.’
   Earlier, a draft declaration for a European Union summit in Brussels on Thursday put the onus firmly on Obama to match his message for Wall Street with action.

The Hongkong and Shanghai Banking Corporation Limited in Bangladesh has signed a memorandum of understanding with Lanka Bangla Securities LTD, one of the premium brokerage houses of the country.
   Under the MoU, the non-resident Bangladeshis who availed HSBC SMART CAPITAL and acquired shares through IPO can sell their shares through Lanka Bangla Securities LTD, a news release said.
   Under SMART CAPITAL, Non Resident Taka Account (NITA) is an account that can be opened by any non-resident Bangladeshi in any bank as per the guideline of central bank of Bangladesh to invest in the capital market.
   Chief executive officer of HSBC in Bangladesh Sanjay Prakash and chief executive officer and director of Lanka Bangla Securities LTD Nasir Uddin Chowdhury signed the agreement on behalf of their respective sides at a ceremony held in Dhaka.

Grameenphone Ltd has recently signed a Thankyou agreement with the Radisson Water Garden Hotel Dhaka.
   Under the agreement, Grameenphone post-paid subscribers will enjoy a special rate on room accommodation. The offer will be valid from September 17 to September 24, a news release said.
   Grameenphone deputy general manager (marketing) Fahad Saleh and Radisson Water Garden Hotel EAM and director (sales and marketing) Saeed Ahmed signed the agreement on behalf of their respective sides.
   Along with a special rate Grameenphone subscribers will also enjoy a complimentary breakfast and dinner from Radisson Water Garden, the release added.

Bata City store, the large format exclusive shoe store in the country, was opened at Banani in Dhaka on Tuesday.
   Bata Shoe Company managing director JD Hearns inaugurated the exclusive store, a news release said.
   Yee Siew NG, CFO, MA Quader, consultant, business development, Zahidul Huda, advertising and promotional manager, Ziauddin Ahmed, store operation manager (family), Firoze Mohammad, store operation manager (city) and senior managers of the company were present.
   Many world famous brands like Bata, Power, Marie Claire, Hush Puppies, Scholl, North Star, B.first, Bata Comfit, Ambassador, Weinbrenner, Bubblegummers and Nike will be available at the store exclusively. It is one of the most well decorated show-room in the country, the release said.