The New Nation - Internet Edition

CSE closes lower yesterday

UNB, Chittagong

Trading at Chittagong Stock Exchange (CSE) closed lower yesterday as the losers dominated the gainers.

The CSE All Share Price Index (CASPI) shed 0.23 percent to close at 8660.74 points yesterday.

The CSE-30 Index, however, rose by 0.27 percent to close at 7728.28 points.

A total of 152 issues were traded today. Of them, 65 gained, 84 declined and three remained unchanged.

Some 4,982,746 shares and debentures worth Tk 58.05 crore changed hands yesterday.

Inflation jumps to 10pc: ADB

BUSINESS REPORT

The inflation rate in Bangladesh reached 10 per cent in March this year, up from 7.2 per cent in June last year on an annual average basis, said Asian Development Bank (ADB) yesterday.

"Higher international food and nonfood commodity prices and shortfall in domestic food grains production heightened inflation. Bottlenecks in the distribution and retail management chain, monetary accommodation of previous years, and panic buying also pushed inflation higher," the ADB said releasing its latest Quarterly Economic Update (QEU) yesterday.

However, the ADB said the weighted average nominal exchange rate remained stable at Tk68.6:$1 since November 2007. "This is helping to dampen inflationary pressures partly by cutting import costs, especially food items." Despite a bumper boro crop, the ADB warns that risks of a supply shortage are possible if the next aman and boro crops are affected by natural disasters or other factors.

Referring to the agriculture sector, it says that the floods and cyclone caused extensive damages to the agriculture sector by affecting crops, livestock, poultry and fish farms. Aman production in FY2008 is estimated at 9.7 million tons compared with 10.8 million tons in FY2007. Boro production is expected to be 16.5 million tons, 10 per cent higher than the preceding year. Encouraged by higher prices of food grains and desperate need to recoup the aman loss, farmers across the country brought more land under boro cultivation. The yield is good owing to the increase in land fertility following the floods and the weather remained favorable. The government launched massive rehabilitation after the floods and cyclone to ensure adequate supplies of inputs to farmers. Bangladesh, a net importer of food grains, has been seriously affected by food price shocks, driven by higher international prices and domestic production shortfall following successive natural disasters.

In this regard, the ADB suggests that over the short-term, the focus of policy responses should be on targeted interventions to protect the poor and vulnerable in the face of rising food prices. "Over the medium to longer term, the focus should be on improving agricultural productivity," it says.

The ADB report observes that severe floods, a cyclone, and low business confidence affected the economy during the first half of FY2008. But the economy rebounded in the second half with timely and effective measures by the government to restore business confidence and boost agriculture production. Despite a good revenue performance, large subsidies pose significant fiscal challenges. Higher external aid flows and workers' remittances provided a cushion to the external balance. Food price shocks affected the economy with macroeconomic and poverty impacts.

On industrial and service sectors, it says that during the first half of FY2008, the industry sector was affected by sluggish investment and low export-oriented manufacturing activity. Erosion in business confidence and slowdown in external demand for garments affected manufacturing. But in the second half of FY2008, the industry sector is rebounding as indicated by the uptrend in export-oriented manufacturing with effective measures taken by the government to restore business confidence. Construction is likely to show a downtrend in FY2008 because of a sharp increase in the price of construction materials including mild steel rod, cement, brick, bitumen and paint. Rising prices of construction materials also affected the implementation of ADP. Growth in services sector has picked up and is continuing its past growth momentum.

Pointing to the overall economic growth, the ADB's QEU observes that GDP is expected to grow by 6 per cent in FY2008, down from 6.5 per cent in FY2007 because of moderating agricultural growth following the extensive flooding and cyclone. The fear and uncertainty among the investor community, apparently created by the government's comprehensive anticorruption drives, have started to ease.

The country has high growth potential. But there are several downside risks in its near-to medium-term prospects. These include political uncertainty, weak infrastructure, vulnerability to natural disasters and volatility in oil and food-grain prices.

On fiscal management, it says that revenue performance improved after several years of poor performance. Government revenue collection by the National Board of Revenue rose by 23.1% in July-March FY2008 over the corresponding period of FY2007. But sustaining this improvement in revenue collection will depend on the rebound of private sector activity and strengthening tax administration. The fiscal deficit in FY2008 is likely to increase to 4.8 per cent of GDP compared with 3.2 per cent in the preceding year. The pressures on the fiscal balance amplified because of post-flood and post-cyclone relief and rehabilitation expenditures; and a sharp rise in subsidies following the rise in fuel, fertilizer and food grain prices in international markets. Slow progress in implementing the annual development program continues to undermine the efficiency of public expenditure.

On monetary and financial sector developments, the ADB report says that broad money growth declined to 15.2 per cent in February 2008, down from 20 per cent in February 2007. This was caused by a decline in the growth of domestic credit, mainly the credit to the government. But private sector credit growth increased, showing significant pick up in credit to trade and industry sectors. Banks' gross non-performing loans (NPLs) remained almost unchanged (13.2 per cent) at the end of December 2007 compared with the end of December 2006. But the NPLs of state-owned commercial banks at 29.9 per cent and specialized banks at 28.6 per cent remained high. The interest spread of the banking system remained high at 6 per cent showing banking system inefficiencies and market segmentation which needs to be contained.

On balance of payments scenario, the ADB report observes that exports rebounded with the recovery in garments exports. Growth in total exports during July-March FY2008 reached 12.4 per cent, driven by woven garments and knitwear exports. Imports during July-February FY2008 rose sharply by 21 per cent over the corresponding period of FY2007. Higher import bills amplified by rising international commodity prices, pushed the trade deficit to $3.2 billion during July-February FY2008, up from $2.1 billion during July-February FY2007. Despite a surge in the trade deficit, a sharp rise in current transfers, particularly workers' remittances, resulted in a surplus of $328 million in the current account. Even with growing pressure on the current account, the foreign exchange reserve stood at $5.8 billion at the end of April FY2008, up from $5.1 billion at the end of June FY2007, aided by higher net foreign aid receipts.

Global response needed to check rising food prices: Investments in agriculture, improved bio-energy and trade policies, and programs that target vulnerable people would reduce the

BUSINESS REPORT

The world's poorest people will be hardest hit by the global rise in food prices. Poor people in developing countries typically spend more than half of their overall budget on food. For the 160 million people worldwide who survive on less than fifty cents a days, food price inflation can spell disaster, said Joachim von Braun, Director General, International Food Policy Research Institute (IFPRI), Saturday.

In a statement, he said this global food crisis is a complex problem that cannot be solved with simplistic approaches. More effective and coherent action is needed now to help the most vulnerable populations cope with the drastic hikes in their food bills and to assist developing countries with strategies to increase agricultural productivity.

"We call for a short term 'emergency package' to stem the tide of the humanitarian crisis. We also call for a 'resilience package' to strengthen the capacity of poor people and developing countries to meet their own needs in the long run.

The IFPRI Director General also made following recommendations to deal with the rising food prices.

Emergency Package

Enhance food assistance. Donor governments need to provide increased support for poor people's food and nutrition security. The focus should be on the most vulnerable, including children. Improve biofuels policies. Governments should revoke biofuel subsidies and excessive blending quotas (such as the requirement to use a certain percentage of ethanol in gasoline). Political leaders should consider a range of additional measures, including freezing biofuel production at current levels, reducing production, or enacting a moratorium on the use of grains and oil seeds for biofuels. At the same time, there needs to be support for development of bio-energy technologies that do not rely on food crops. A moratorium on grain-based biofuels would quickly unlock these commodities for use as food. This measure might bring corn prices down globally by about 20 percent and, as a consequence, decrease wheat prices by about 10 percent.

Stop export bans. A country that enacts measures such as agricultural export bans, high export tariffs, and price controls may reduce its risks of food shortages in the short-term. However, these measures are likely to backfire by making the international market smaller and more volatile. Export restrictions have harmful effects on import-dependent trading partners. For example, export restrictions on rice in India affect Bangladeshi consumers adversely and also dampen the incentives for rice farmers in India to invest in agriculture. Price controls reduce farmers' incentives to produce more food. Empower small-scale farmers. Providing improved seeds, fertilizer, credit, and other resources for small-scale farmers in developing countries would quickly improve production, increase incomes, and lower prices.

Resilience package

Invest in people. For longer term impact, developing countries need to invest in social protection measures, such as cash transfer programs, pension systems and employment programs. Preventative health and nutrition programs targeted to vulnerable groups (e.g. mothers, young children, and people living with HIV/AIDS) should be scaled up to ensure universal coverage. In addition, school feeding programs can play an important role in increasing school enrollment and in retaining children in school and enhancing their academic achievement.

Reduce market volatility. Improving grain stocks and enacting regulatory measures to curb excessive speculation in agricultural commodities would help to stabilize markets in times of crisis.

Support agriculture. Long term relief from rising food prices can only be possible with increased agricultural production. Industrialized nations should revitalize their support for research, innovation, and extension to transform small farm agriculture.

Implementation of both the short-term emergency response and the long-term solutions must begin now. Together, action in these areas would go a long way to stem the tide of rising food prices and reduce the threat of hunger and poverty.

Warid provides traffic control and safety materials to police

Warid Telecom, the fourth largest mobile phone operator in Bangladesh, yesterday provided traffic control and road safety materials to the Bangladesh Police to facilitate its traffic wing to deal with growing traffic menace efficiently.

Inspector General of Police Nur Mohammad received the materials from Chief Executive Officer (CEO) of Warid Telecom Muneer Farooqui at a simple ceremony at the Police Headquarters at Ramana in the city. Additional Inspector General of Police N B K Tripura, SM Sazzat Ali, Naim Ahmed, Deputy Inspector General Syad Shahzaman Raj, General Managers of Warid Telecom Mumtaz Ahmad Khan, Ashraful H Chowdhury, Mahboob Hossain and Ismat Ahmed Chowdhury were present at the function.

Traffic control and road safety materials will be used by members of traffic police at 178 locations and three police boxes in Dhaka city and several hundred locations across the country till the next one year.

Thanking Warid Telecom for supplying the road safety materials, IGP Nur Mohammad said the telecom company has done a commendable job by providing the traffic control and safety materials. These materials will certainly help improve traffic management system in the city, he added.

The IGP hoped that Warid would come up with more contributions in future for building a long-lasting relationship with the police department.

Addressing the programme, Warid Telecom CEO said the materials were provided to help the traffic personnel carry out their duties safely and properly amid scorching sun and incessant rain for maintaining the road safety rules.

"In fact, we are involved with the initiative as we are committed to the corporate social responsibility (CSR). We are very happy to be associated with the police department for such an important cause," said Mr. Farooqui.

He, however, hoped the traffic control and safety materials will effectively help the police to minimise accidents and other hazards or risks on the streets.

Warid Telecom, a subsidiary of UAE-based Abu Dhabi Group, launched its commercial operation in Bangladesh in May 10, 2007 as the sixth the mobile phone operator. Within one year, the company became fourth largest operator by acquiring over 3.0 million subscribers.

Shahjalal Islami Bank launches 6 deposit, 5 investment schemes

BUSINESS REPORT

Shahjalal Islami Bank Ltd, one of the leading private commercial banks of the country, yesterday launched six attractive and profitable deposit and five investment schemes ahead of the bank's stepping into the eighth year.

Addressing the product launching ceremony at the bank's training institute in the city's Dilkusha Commercial Area, Managing Director of Shahjalal Islami Bank Limited Mohammad Ali told journalists that the bank introduced the deposit and investment schemes aiming at meeting dire necessity of the low-income groups of the society like small businessman, service holders and self-employment people.

Deputy Managing Director of the Bank Zillur Rahman and Senior Executive Vice Chairman Abduz Zabbar Chowdhury, among others, were present at the launching function.

The new deposit schemes are Mudaraba Lakhapati Savings Deposit Scheme,

Mudaraba Marriage Savings Deposit Scheme, Mudaraba Mohor Savings Deposit Scheme, Mudaraba Education Savings Deposit Scheme and Mudaraba Special Term Deposit Scheme.

On the other hand, the new investment schemes are Investment Scheme for Education, Marriage Investment Scheme, Investment Scheme for CNG Conversion, Investment Scheme for Doctors, Investment Scheme for Executives and Overseas Employment Scheme.

Mohammad Ali said the new investment schemes were prepared towards mitigating the key problems of the society and relieving low income groups from the financial problems.

"We want to see strong and vibrant small and medium enterprises in the country," he said.

The Managing Director also said the bank would establish its branches at each rural area of the country by 2040. Now the bank has 25 branches throughout the country and five more branches are expected to be opened by July and August next.

Shahjalal Islami Bank is a modern commercial bank in nature, which has been operating its activities based on Islami Banking and Shariah since 2001. It is now progressing rapidly in the country's banking sector.

As on 31 December, 2007, total deposit stood at Tk 2262 crore showing a robust growth of 25 per cent and total investment stood Tk 2062 crore with the growth rate of 33 per cent.

The Managing Director said that the deposit of the bank has stood Tk 2700 crore and investment Tk 2500 crore.

For 2008, the target of deposit of the bank was fixed at Tk 3100 crore, while the target of investment was fixed at Tk 2950 crore, he said.

"By the blessings of Almighty Allah, we have succeeded to achieve our targets in almost all areas by April 30, 2008, he added.

He said Mudaraba Monthly Income Scheme is the biggest among the existing nine deposit schemes of the bank. The share of the scheme is 40 per cent of the total deposit.

Mohammad Ali said the growth of import, exports and remittance businesses significantly increased last year. The volume of import business stood at Tk 2549 crore with growth rate of 36.43 per cent, while export business stood at Tk 1508 crore with growth rate of 33.70 per cent and remittance at Tk 430 crore with growth rate of 21.50 per cent as of December 31, 2007.

As on April 30, 2008, import business volume of the bank stood at Tk 1284 crore with the growth rate of 50 per cent, while export business amounted to Tk 738 crore with the growth rate of 61 per cent and remittance business reached at Tk 230 crore with the growth rate of 100 per cent.

Denmark to train Bangladeshi workforce in shipbuilding

CHITTAGONG: A tripartite agreement has been signed among a Bangladeshi firm and two Danish firms to provide necessary training to Bangladeshi workforce in shipbuilding sector.

The agreement was singed at the Embassy of Denmark in Dhaka on Thursday.

Officials of Bangladeshi shipbuilding firm--Western Marine Shipyard Ltd (WMSL) and Danish firms Stella Shipping Ltd and the Plantware Ltd signed the agreement to impart necessary training to the engineers and naval architects of the WMSL in shipbuilding that covered areas from architectural designing to electrical design of a new ship.

Apart from enriching the country with shipbuilding technology by transferring technological know-how, the training would help Bangladesh to achieve self-sufficiency in the sector as well as reduce cost for manufacturing ship for export.

A six-member team of WMSL that comprised two marine engineers, two mechanical engineers and two naval architects left Dhaka for Denmark last month to receive training in the shipbuilding technology.

Danish International Development Assistance (DANIDA) will provide necessary support to implement a pilot project to this end under the supervision of Danish Embassy in Dhaka.

Officials concerned said the country would not need to depend on foreign experts for shipbuilding technology in future if a sizable number of local workforce acquired technological knowledge in ship manufacturing.

WMSL Chairman Saiful Islam, Managing Director Shakhawat Hossain and Stella Shipping Ltd Chairman Fabrecious were present at the agreement signing ceremony.

Sowkat Ali promoted as GM of DATCO

Sowkat Ali, a seasoned and senior most executive of DATCO, has been promoted as the General Manager (GM) of the company as its Bangladesh headquarters. He has assumed his new assignment under the company on May 15.

Sowkat first joined the DATCO Group as an Executive early in 80's. He obtained his Master's in Business Management from Rajshahi University. He also completed his Chartered Accountancy Course (CC) under S.R. Islam & Co., Dhaka adding a new credential to his academic career.

Ever since he joined DATCO Group, he has contributed largely to the promotion and development of the company in its various sectors. His worthiness as a prudent, efficient and forward looking executive proved to be rewarding for him. He is fortunate enough to become the General Manager first ever in the history of the DATCO Group at Bangladesh headquarters.

He is married with two children, the first a son is studying in Australia while the other a daughter is a student of 'O' level in British School, Dhaka. His accomplished spouse is a government official.

Training on Western Union Money Transfer

BUSINESS REPORT

Dhaka Bank Training Institute (DBTI) organised a training on Western Union Money Transfer for Dhaka Bank Limited (DBL) officers at the institute at Motijheel in the city recently.

A total of forty officers from different branches of the bank participated in the training. Regional Operations Manager, Western Union, Bangladesh, Md Ahsanul Hoque Bashar conducted the sessions.

Govt vows to bring discipline in shrimp industry

bdnews24.com, Dhaka

Commerce Adviser Hossain Zillur Rahman said on Saturday that the caretaker government would take all necessary steps to ensure that labour laws were implemented in the shrimp industry.

"This (compliance with labour laws) is an essential instrument to get access to the global market," Rahman told a seminar on labour issues in the shrimp processing industry. The adviser said the government and other stakeholders were taking a 'proactive and problem-solving approach' towards the issue.

"Bangladesh has embarked on a very important journey to improve the standard of livelihoods of workers and other citizens of the country," he said. Rahman stressed the need for accelerating the ongoing monitoring of employers' compliance with labour laws, calling for a "credible body of evidence" within the area that would build confidence in all stakeholders. Bangladesh Shrimp and Fish Foundation (BSFF) and Bangladesh Frozen Foods Exporters Association (BFFEA) jointly organised the seminar.

David J Welsh, country director of the American Centre for International Labour Solidarity, said progress in the area of labour-related issues had been quite impressive, although he called for stricter measures in the future to ensure greater compliance in all domestic industries. Welsh made it clear that he did not support any boycott of Bangladeshi products. "We are in no way for a boycott, rather we are advocating for labour compliance issues for the greater global acceptance of Bangladeshi products," he said.

In his keynote presentation, Dr Mahmudul Karim, executive director of the BSFF, said the organisation had reached a decision with the frozen food exporters that the BFFEA would notify that all plants under their purview would have to comply with labour laws.

Dr Karim said areas of concern included child labour issues, the provision of complaint boxes, and access for labour rights bodies to assess workplace conditions. Panuddha Bonpala, director of the International Labour Organisation's Bangladesh chapter, laid importance on providing children with access to education to put an end to child labour. "Children should be provided with the right opportunities such as formal and informal education as well as vocational education," she said.

Acting Labour and Employment Secretary Mahfuzul Haque said anyone found violating labour laws would face dire consequences.

"I would like to say this very clearly: violators of the labour act will not go unpunished," he said. Haque added that his ministry had taken an initiative to impart training to labour inspectors to ensure strict adherence to the law.

Emirates flies to Guangzhou from July

BUSINESS REPORT

Dubai-based airline Emirates will operate non-stop flights from Dubai to Guangzhou, six times weekly except Fridays, from July 1.

A delegation of senior executives from Emirates arrived in Guangzhou to showcase the airline and Emirate of Dubai ahead of the launch of its services on July 1. They met government officials, VIPs, the travel trade industry, media and other stakeholders during the road-show.

The Emirates team was spearheaded by Richard Vaughan, senior vice president (Commercial Operations), East Asia and Australasia, Peter Sedgley, senior vice president (Cargo Commercial Operations) and Edwin Lau, vice president (Greater China).

Richard Vaughan said, "Dubai and Guangzhou share several common strands - both cities are of political, economic, cultural, and social importance in their respective regions. Guangzhou is positioned as an air travel hub for Guangdong and the South China provinces, and Dubai for the Middle East and increasingly on the global stage.

Bilateral trade between China and UAE reached US$20 billion in 2007, up by 40 per cent from the previous year. More than 200,000 Chinese live and work in Dubai and the city hosted more than 68,000 visitors between January and September 2007 alone.

Cargo is a key business driver for the airline and Emirates SkyCargo's services will offer a range of solutions for industries in Guangzhou and southern China. Emirates SkyCargo will offer more than 350 tonnes of monthly capacity in each direction, set to boost existing trade ties between Guangzhou and the UAE and spanning the airline's network.

Emites also is busy setting up the local office and recruiting an experienced and dedicated team in Guangzhou to offer passengers the airline's award-wining service at every customer touch-point.