The New Nation - Internet Edition

Japan slips into recession, G20 fails to inspire

Reuters, Tokyo

Japan unexpectedly sank into recession in the third quarter, even before it felt the full force of the financial crisis, putting more pressure on world leaders to deliver on a promised global economic rescue plan.

With the euro zone also in recession, the U.S. economy shrinking in the third quarter and China slowing sharply, markets shrugged off pledges from leaders of the Group of 20 nations to stimulate growth and reform the financial system.

Oil fell more than $1 to below $56 a barrel and stock markets retreated in Asian trading.

The yen and U.S. dollar initially pressed higher as investors pulled cash away from emerging markets and riskier assets, before a rebound in Tokyo share prices from early losses dampened fear-driven demand for the Japanese currency.

Consensus forecasts had suggested Japan's economy would narrowly avoid its first recession in seven years, but Economics Minister Kaoru Yosano said he was not surprised and expressed concern about neighbouring China as well.

"As data shows, China's economy seems to be slowing. We are seeing clear signs that the global financial crisis is also affecting BRICs economies," Yosano told a news conference, referring to Brazil, Russia, India and China.

WORSE TO COME

Japan's third-quarter data did not capture the full impact of the crisis that erupted in September, destroying Wall Street banks and threatening to rupture the global financial system.

Japan had largely escaped the first rumblings of the crisis triggered last year by U.S. mortgage defaults.

It felt the first major tremors in October when the Tokyo stock market crashed, forcing banks to try to replenish capital. A surge in the yen also sideswiped exporters facing their toughest markets in decades.

Leaders of the world's 20 largest economies, meeting in Washington over the weekend to address the worst financial crisis in 80 years, agreed on a host of fiscal and monetary steps to rescue the global economy.

But they left it to individual governments to tailor their response to their own circumstances and troubled industries.

"Taken as a whole, it does not appear that the outcome of the summit will be sufficient to stem the financial crisis.

This was a high bar from the start," said Marc Chandler, global head of currency strategy with Brown Brothers Harriman in New York.

MADE THINGS WORSE

The post-meeting statement from the group of major industrialised and developing countries contained a laundry list of reform pledges aimed at soothing volatile markets and calming consumers' worries.

"This weekend's G20 summit failed to deliver any new stimulus measures to rescue the world economy from the current recession, but at least it avoided the knee-jerk responses (such as rushed regulation) that would have made things worse," Julian Jessop at London-based Capital Economics said in a report.

"The real purpose of this summit was to agree a work programme for reform of the global financial system. In that respect we would suggest that it has been a success."

The G20 statement said that all financial markets, products and participants would be subject to supervision, vowed tougher accounting rules, a review of compensation practices and greater cooperation between national regulators. Even the long-running Doha round of free-trade talks was given a new lease on life.

Finance ministers were told to develop specific plans for implementing the recommendations.

The first set of actions is to be completed by the end of March, and a follow-up meeting will be held by the end of April.

U.S. President-elect Barack Obama sent emissaries to the event, and issued a statement in support of a coordinated response to the global financial crisis.

With a $700 billion fund promised to stabilise the battered U.S. financial system, the outgoing Bush administration and its successor must tackle the urgent question of how, or whether, to rescue the nation's "big three" automakers.

The Senate is due on Monday to begin debating emergency legislation to provide $25 billion in aid to General Motors Corp, Ford Motor Co and Chrysler LLC.

As well, U.S. Treasury Secretary Henry Paulson is due to speak on the economy and markets later on Monday.

Turkish company to invest $5.7m at Ishwardi EPZ: Set up socks manufacturing industry

nation BUSINESS REPORT

Messrs Bensim Limited, a Turkish company will set up a socks manufacturing industry in the Ishwardi Export Processing Zone.

This 100 percent foreign owned company will invest 5.7 million US dollar in setting up its unit and will produce to export annually 8.5 million pair of socks.

The company will also create employment opportunity for 1,250 Bangladeshi and 20 foreign nationals.

An agreement to this effect was signed between the Bangladesh Export Processing Zones Authority and Messrs Bensim Limited in BEPZA Complex, Dhaka on November 16. Md Farhad Uddin, Member (Investment Promotion) of BEPZA and Islam Abdulkadir Kahraman, Chairman of Messrs Bensim Limited signed the agreement on behalf of their respective organization.

Brig General Jamil Ahmed Khan, Executive Chairman of BEPZA and other officials from respective organizations were present on the occasion.

Shipping Corporation earns Tk 2.34b profit

NATION BUSINESS REPORT

The state-owned national flag carrier, Bangladesh Shipping Corporation (BSC), earned Tk 233.57 crore during the fiscal year 2007-08.

According to sources in the Ministry of Shipping, the national shipping service providing corporation during the fiscal 2006-07, earned Tk 153.09 crore by providing shipping services to its clients.

Currently, the BSC owns a fleet of 13 ocean-going vessels. The fleet includes Banglar Gourab, Banglar Kakoli, Banglar Kollol, Banglar Momota, Banglar Maya, Banglar Robi, Banglar Moni, Banglar Urmee, Banglar Jouthi, Banglar Doot, Banglar Mukh, Banglar Shikha and Banglar Shourab.

The shipping corporation is conducting its activities with its 350 officials and employees.

Of the vessels, Banglar Gourab earned Tk 4 crore in the fiscal 2007-08 and Tk 3.8 crore during the previous year, Banglar Kokoli earned Tk 17 crore last year and Tk 12 crore in 2006-07, earnings by Banglar Kollol stood at Tk 2 crore last fiscal year and Tk 10 crore in 2006-07, earnings by Banglar Momota amounted to Tk 25 crore last year and Tk 8 crore during the previous fiscal, Banglar Maya earned Tk 18 crore in 2007-08 and Tk 20 crore during the previous fiscal year, Banglar Robi earned Tk 8 crore last year and Tk 1 crore in 2006-07, Banglar Moni earned Taka 8 crore last year and Tk 6 crore in 2006-07, Banglar Urmee earned Taka 11.1 crore in the fiscal year 2007-08 and Tk 7 crore previous year, Banglar Jouthi earned Taka 41 crore last year and Tk 30 crore during the previous year, Banglar Doot earned Taka 11 crore last year and Tk 12 crore in 2006-07, Banglar Mukh earned Taka 41 crore in 2007-08 and Tk 1.3 crore previous year and Banglar Shikha Taka 26 crore last year and Tk 2.3 crore previous fiscal.

Sources said, all of the ocean-going ships of Bangladesh Shipping Corporation are decades-old.

Most of them are in need of repairs from time to time. The vessel named Banglar Shourab is currently under repair.

Earnings of BSC spiked gradually during the period and this growth resulted from transparent and corruption-free ship-chartering activities, broker enlistment system and activities regarding leasing ships from other companies and leasing vessels out to other organizations.

It took almost seven years to ensure transparency in the national shipping lines, sources said.

Govt borrows Tk 500cr thru' treasury bills

NATION BUSINESS REPORT

The government borrowed Tk 500 crore on Sunday through auctions of treasury bills. It will result in withdrawal of Tk 500 crore from the market in the week.

The central bank conducted auctions of 91-day and 364-day bills on the day.

Bidders offered Tk 2.5525 billion and Tk 2.8675 billion against 91-day and 364-day bills respectively.

The central bank, however, accepted Tk 1.0575 billion and Tk 365 million against 91-day and 364-day bills respectively.

Besides, Tk 1.4425 billion and Tk 2.135 billion were devolved to primary dealers against respectively 91-day and 364-day bills for liquidity support.

The ranges of the implicit yields against the accepted bills respectively were 7.90-7.92 per cent and 8.57 per cent per annum.

The net outflow of cash from the market is expected to increase pressure on liquidity, the fund managers said.

NRBs want Special Economic Zone in Sylhet soon

OUR CORRESPONDENT, Sylhet

British-Bangladesh Chamber of Commerce, a forum of Bangladeshi expatriates in the UK, stressed the need for immediate steps to develop a special economic zone in Sylhet and stop harassment of expatriates back home.

'We think immediate steps should be taken to implement the proposed SEZ in Sylhet and protect non-resident Bangladeshis from harassments by various authorities so that they feel encouraged to invest in home,' said Shahgir Bakth Faruq, the chamber president.

A delegation of the chamber on Sunday exchanged views with local authorities, businesspeople and people's representatives at the divisional commissioner's conference room, and reaffirmed their interest in investing in productive and service sectors if a hassle-free investment climate is ensured especially for NRBs.

Shahgir led the delegation which also includes the chamber's London branch president Muhib Ali, BBCC vice-president Saad Gazi, former mayor of Tower Hamlet Saiful Alam and other leaders Mobarak Ali and Ranjana Chowdhury addressed the programme.

Divisional Commissioner in Sylhet Zafar Ahmed Khan chaired the function, where DIG police Abul Kashem Sazzadul Hasan, and deputy commissioners of Sylhet, Habiganj, Moulvibazar and Sunamganj districts, Sylhet Osmani Airport manager Hafiz Ahmed, former president of the Sylhet Chamber of Commerce and Industry Faruq Ahmed Misbah, and senior vice-president Nasim Hossain, among others, also spoke.

The divisional commissioner said the government is sincere about ensuring welfare of the expatriate Bangladeshis.

He urged the NRBs to take part actively in implementation of the proposed special economic zone as expatriates had nearly Tk 7,000 crore as deposits with different banks in the division.

'The government is working for creating an investment-friendly environment in the country to encourage the expatriates to invest in productive sectors here,' the divisional commissioner said.

The BBCC delegation also met Sylhet mayor Badar Uddin Ahmed Kamran at his office on Sunday.

The mayor requested the expatriate business leaders to extend their support to boost the small cottage industries of clothes and handicrafts, which are common in the region which is home to various ethnic minority communities.

Oil falls below $56 as Japan slips into recession

AP, Singapore

Oil prices fell below $56 a barrel Monday in Asia as news that Japan fell into recession highlighted investor fears of a global economic slowdown that will hurt crude demand.

Light, sweet crude for December delivery was down $1.29 to $55.75 a barrel in electronic trading on the New York Mercantile Exchange by midday in Singapore. The contract fell $1.20 Friday to settle at $57.04.

Japan, the world's second-largest economy, said Monday it slid into a recession for the first time since 2001 after gross domestic product contracted at an annual pace of 0.4 percent in the third quarter after a shrinking 3.7 percent in the second quarter. Japan now joins the 15-nation euro-zone in a recession, defined as two straight quarters of GDP contraction.

"Markets are very worried about the international economic outlook, about oil consumption," said David Moore, a commodity strategist at Commonwealth Bank of Australia in Sydney. "As data is released in the U.S., Europe and other countries, investors get a reminder of the economic problems in the developed world."

Oil prices have tumbled about 62 percent since peaking at nearly $150 a barrel in mid-July.

Comments Sunday from OPEC President Chakib Khelil, downplaying the possibility that the group could cut production at a meeting this month, also weighed on prices.

On Saturday, Iran called on the Organization of Petroleum Exporting Countries to reduce output quotas by up to 1.5 million barrels a day a meeting later this month. But Khelil said OPEC, which accounts for about 40 percent of world crude supply, hasn't yet fully enforced previous quotas and the group needs more data before it decides to cut production.

Iran's call for more cuts is "a wish," Khelil said. OPEC, which cut quotas 1.5 million barrels a day last month, plans to meet on Dec. 17.

"The short-term trend for oil prices is possibly still to the downside," Moore said. "But as the OPEC cuts start to take surplus out of the market, this tightening will eventually give support to the oil price."

A stronger U.S. dollar also helped push oil prices down. Investors often buy oil futures as a hedge against inflation and a weaker dollar and sell when the dollar gains.

The euro fell to $1.2570 Monday from 1.2602 on Friday while the dollar was steady at 97.22 yen.

"The firm U.S. dollar is certainly a factor in why the oil price is lower," Moore said.

In other Nymex trading, gasoline futures fell 1.91 cents to $1.22 a gallon. Heating oil dropped 2.47 cents to $1.81 a gallon while natural gas for December delivery rose 5.6 cents to fetch $6.37 per 1,000 cubic feet.

In London, December Brent crude fell 89 cents to $53.35 on the ICE Futures exchange.

Bangladesh Electrical Association holds certificate giving ceremony

Bangladesh Electrical Association organised a function at Institute of Diploma Engineers for giving crest and certificate to the meritorious students who passed SSC, HSC, '0' Level & 'A' Level Examinations 2008 on November 30.

FBCCI Director and President of Bangladesh Electrical Association Mir Nizam Uddin Ahmed presided over the function while eminent journalist and Editor of Bangladesh Observer Iqbal Sobhan Chowdhury, BRB Cables Chairman Mojibur Rahman, Paradise Group Chairman Mosharaf Hossain were present as special guests.

Fourteen students were awarded at the function. A cultural show was also performed by the renowned artistes in the second part of the event.

Singer Plus launches special campaigns

Singer Plus launched two special campaigns Sunday on the occasion of Eid-ul Azha, says a press release. Under the campaigns titled "Full Free Eid Offer" and "Buy Samsung with Easy Installment", the customers will get benefits in purchase of Singer, Samsung, Whirlpool and Haier refrigerators, televisions, microwave ovens and water heaters.

Under the campaigns, the customers will enjoy guaranteed cash discount of Tk 500 up to 100 per cent on Singer, Haier and Whirlpool refrigerators. The clients will also enjoy cash discount of Tk 500 up to 100 per cent on Singer, Haler, Samsung and MEG.XL televisions through scratch card. The discount is applicable for both cash and hire purchase. Another attraction of the campaigns is that the buyers at Singer Plus will get the opportunity to pay in 90 days without any interest for refrigerator, freezer and television of all brands.Under the eid offer, the buyers will also get discount up to Tk 1,000 in purchase of Singer and Whirlpool microwave oven and Tropica water heater through scratch card.