Russia ‘invited to join energy agency’

The International Energy Agency, which represents consumer countries, has invited Russia and other producer nations to join it, Executive Director Nobuo Tanaka said in a newspaper interview on Sunday.

The Observer weekly said the move was a desperate attempt to broker a deal between buyers and sellers over soaring crude prices.

'We all really have a common interest. You cannot take oil in isolation from gas security, energy efficiency and electricity from renewables,' Tanaka said.

'The issues of energy security and climate change need to be tackled collectively and we think Russia and other key producers can learn a lot from (the IEA's) experience.'

The 28-member IEA was created in response to the 1973-4 oil crisis, to help industrialised countries coordinate a collective response to disruptions in oil supply.

The Paris-based organisation last week expressed disappointment with the decision by the oil cartel OPEC not to boost output quotas given persistently high prices, supply shocks and rising seasonal demand.

Russia, an energy superpower, is viewed by the IEA as a 'key non-member' country along with China and India, but Tanaka said it would be a good thing if Moscow became a full member.

He raised this with Russian deputy prime minister Igor Sechin on Saturday, the newspaper said, and Sechin had indicated that he might come to the next ministerial meeting of the IEA in October.

Discussing a timeframe for membership, Tanaka said: 'I don't know when (it) will happen. It can't be done in a day, and may take years, but Russia can benefit from our knowledge.'

Source : New Age 

Good governance key to growth

Malaysian premier Najib Razak Sunday told a gathering of African leaders including Zimbabwe's controversial president Robert Mugabe that good governance was vital to economic growth.

At a forum on promoting economic ties between Malaysia and Africa, Najib said the growth of social media was setting higher standards of accountability for governments around the world and leaders had to be ready to embrace change.

He made the call in front of 16 African leaders including the 87-year-old Mugabe, who has ruled Zimbabwe since 1980 and is banned from travelling to the European Union over his regime's human rights record.

'Good governance and best practices are essential prerequisites for economic growth and a precursor for transformation,' he said at opening of the three-day event in Putrajaya, south of Kuala Lumpur.

'Some people are fearful of the uncertainty that change brings; others are threatened by having to do things differently. A true leader must be able to address these concerns and obstacles and to overcome this resistance to change,' Najib added.

He said that in a more gobalised world, the social, political and economic situations in most countries were unable to remain stable for long.

Najib said social media was raising people's awareness and setting a 'higher standard of accountability about actions and inactions on the part of global governments.'

Malaysia's invitation to controversial African leaders with dubious rights records such as Mugabe — who attended the meeting surrounded by bodyguards — has caused concern among activists.

Sudan's President Omar al-Bashir, who is wanted by the International Criminal Court over genocide and war crimes charges, was also invited but pulled out after opposition to his presence from rights groups.

Former president of the Malaysian Bar Council Ragunath Kesavan said the invitations could be seen as condoning their abuses.

'We should not engage with Mugabe. We should not add legitimacy to this international pariah,' he said.

'It will be seen as condoning and sympathetic to what Mugabe is doing in his country.'

Malaysian foreign minister Anifah Aman told state media that Sudanese foreign minister Ali Karti, who was supposed to attend the forum in place of his president, also did not turn up Sunday, meaning the country had effectively boycotted the event.

'They (Sudan) are not here... they have informed us... due to some unforeseen circumstances,' he told the Bernama news agency.

Malaysia's national oil company Petronas has major exploration investments in Sudan with the African nation last year producing 26 per cent of Petronas' total international output, according to the Star daily.

Source : New Age 

Business rounds on Indian govt over economy

Business leaders in India have rounded on the government, urging a halt to interest rate rises, amid fears that inflation and lack of institutional reform could hit investment and cut economic growth.

The Reserve Bank of India hiked rates by a quarter of a percentage point this week — the 10th rise in 16 months and longest streak of monetary tightening in a decade — to battle inflation of more than nine per cent.

'The latest rate hike may not achieve the desired results unless the government comes up with basic reform,' Rajiv Kumar, secretary-general of the Federation of Indian Chambers of Commerce and Industry, said on Friday.

The president of the Associated Chambers of Commerce and Industry of India, Dilip Modi, warned that 'high input prices, rising finance costs and global uncertainties are adding to negative sentiments'.

'A high interest rate environment will most certainly put brakes on new investments,' he added.

India's government predicts that the economy will grow at between 8.5 to 9.0 per cent in the current financial year but economists are revising estimates downwards to between 7.2 to 7.5 per cent.

The economy grew 8.5 per cent last year.

The negative mood has already had an impact on India's stock markets and foreign investment.

Shares on the Bombay Stock Exchange have been down for two straight weeks, as domestic concerns combine with wider fears about Greece's debt crisis to make fund managers cautious.

Indian shares are down near 13 per cent this year, making it the worst performing market in Asia. Bellwether firms Reliance Industries and Infosys — the most weighted stocks on the Sensex — are at near one-year lows.

On Friday, the Sensex closed at almost its lowest level this year.

By this time last year, foreign investors had bought $5.6 billion of Indian stocks but this year they have sold $139 million.

Global fund managers now consider India to be one of the least-favoured investment destinations, according to a recent Bank of America-Merrill Lynch survey.

The country was ranked underweight at -20 per cent — its lowest reading in the last six months.

In contrast, India's great economic rival China is one of the most preferred markets, the study suggested.

'Business confidence in India is low,' admitted Phani Sekhar, a fund manager with Mumbai-based Angel Broking.

'(The lack of reform) is taking the sheen out of India's growth story,' added Sonam Udasi, head of research at brokerage IDBI Capital.

Experts say the government has dithered on pending reforms in infrastructure development, retail, banking and the fuel sector.

Meanwhile, inflation — up to 9.06 per cent in May and well above the RBI's 'comfort level' of 5.0 to 6.0 per cent — driving up the cost of funds and risking a delay in investment in key sectors.

The latest interest rate rise comes at a time when fewer cars are being sold, cement sales are slowing and steel imports have dipped.

Economic growth slowed to 7.8 per cent in the three months to March — its weakest pace in five quarters — while growth in industrial output in April halved compared with the same period last year.

IDBI Capital's Udasi said the government's disinvestment plans are unclear and with fuel subsidy burdens rising, the fiscal deficit target of 4.6 per cent looks 'grim'.

'Investors are disappointed by the lack of tough decisions from the government, adding to the nervousness,' said Angel Broking's Sekhar.

India has deregulated petrol prices but continues to offer widely-used diesel fuel, cooking gas and kerosene — known as 'the poor man's fuel' — at heavily-subsidised rates to the public.

The government has dithered on hiking diesel and cooking fuel prices, possibly fearing a backlash from opposition and the millions of India's poor, who are already struggling to cope with high food prices.

Source : New Age

ECB warns of widening global imbalances

European Central Bank president Jean-Claude Trichet on Sunday raised concern about widening global imbalances after the financial crisis, calling them one of the main challenges for the global economy.

Global imbalances

were blamed for contributing to and aggravating the financial crisis and recession that struck the global economy in 2008 and 2009.

'A concern is that after some partial reduction induced by the crisis, global imbalances are starting to widen again,' Trichet said according to a speech text for a ceremony, in which he was awarded the Global Economy Prize 2011 by the Institute for World Economy in the northern German city of Kiel.

Such imbalances raise challenges for international monetary and fiscal cooperation, Trichet said, referring to global imbalances as 'one of the main challenges facing the global economy and the world community'.

Finance ministers of the world's major economies reached a fudged accord in February on how to

measure such imbalances after China prevented the use of exchange rates and currency reserves as indicators.

The United States and other western countries accuse Beijing of keeping the yuan artificially undervalued to boost its exports, hence accumulating massive foreign currency reserves that they say distort the world economy.

Trichet said the euro zone does not contribute to global imbalances, pointing to projections by the International Monetary Fund which see the euro area current account broadly balanced this year and the next, up to 2015.

He pointed out that 'the euro area has a significant stake in effective global re-balancing, notably through sounder domestic policies worldwide which, in turn, would contribute to global external stability'.

The euro zone is struggling with a severe debt crisis, facing its toughest test as it tries to prevent Greece defaulting.

Source : New Age

Euro debt crisis raises fresh calls for tighter union

Europe's debt crisis, highlighted by fears of a Greek meltdown for a second time in just over a year, is raising fresh calls to strengthen EU political union to guarantee a future for the common currency.

As euro nations and the IMF bid to agree on a second bailout for Greece tipped to be almost as  big as last year's

110-billion-euro rescue, European Union leaders come under pressure at a June 23-24 summit to accelerate joint economic governance.

'We have a European bank but no European budgetary policy, and that is sorely lacking,' Belgian finance minister Didier Reynders said Friday.

'The Greek crisis shows we need to reinforce Europe.'

The building debt crisis late 2008 and early 2009 forced EU leaders both to seek joint solutions to pending defaults and wake up to the fact that members were far from sticking to strict budgetary rules and enforcing shared economic targets.

A first step came with the 2010 the agreement to set up a European monetary fund, a move unimaginable a few years back.

But the joint rescue fund, since used to pump funds into debt-stricken Ireland and Portugal, has only a three-year life span and details remain to be worked out to give the European lender of last resort a lasting existence.

Greece's failure to resolve its problems, though partly due to the impact of worse-then-expected recession. is seen as a wake-up call for those demanding closer economic integration within the 27-nation bloc.

Stepping in to plead for greater union as Greece faced meltdown, EU president Herman Van Rompuy last week said sharing a currency meant that structural reforms were necessary across the 17 euro-states.

'Each country's destiny is linked to the destiny of the whole,' he said. 'We simply cannot have one currency and 17 divergent policies.'

One idea put forward by European Central Bank chief Jean-Claude Trichet is a eurozone finance ministry.

'I like this idea,' said Luxembourg premier Jean-Claude Juncker, who heads the euro nations, 'as it would contribute to tighter monitoring of budget policies.'

'What I like about it is it calls for more Europe,' he said, while admitting practically in the same breath that 'it won't work', given the reluctance of national governments to heed the advice or recriminations dished up by the eurogroup or EU executive.

At stake at this week's summit is a new stab to finalise a raft of measures to force EU states to stick to strict budgetary and economic targets—setting deficit and debt ceilings of three per cent and 60 per cent respectively of GDP—which has caused a rumpus with the European Parliament.

Source : New Age 

Japanese dealers to keep eye on Fed meeting

Japanese shares posted their sixth straight weekly loss Friday, with investors awaiting US officials' views on the fragile US economy as its quantitative easing programme ends, analysts said.

The Federal Reserve, which has promised to end the current second-round of quantitative easing this month, will hold a two-day policy meeting amid concerns over the impact withdrawing will have on the US economy.

'The main thing (in this week) will be the (Federal Open Market Committee) FOMC meeting. How do they assess the soft tone of the US economy?' asked Seiichi Suzuki, strategist at Tokai Tokyo Securities.

'The market's focus will not be whether they will take new actions now. Rather, investors will watch for any change in the tone of their speech,' he said.

He added that markets will scrutinise any comments from the Fed in terms of whether they signal an official stance to continue monitoring the situation or offer hints that fresh stimulus programmes may later be considered.

US shares have been easing since last month, pulling down Japanese stocks.

The Nikkei has seen weekly falls since marking a moderate increase in the week to May 6, when the index closed at 9,859.20.

Source : New Age 

Chinese stocks lose their lustre in US markets

High-flying shares in Chinese companies have come crashing to the ground recently, amid a flurry of accounting scandals and a crackdown by US regulators.

Less than two months ago, US investors were eagerly buying shares in Renren, a social-networking company dubbed the 'Facebook of China,' and other firms that seemed poised to benefit from China's rapid economic growth.

Renren's shares jumped 29 per cent on the day of its initial public offering on the New York Stock Exchange in May. Then they sank, closing at just $7.03 on Friday, down to about half of their IPO price of $14.

Of the 12 Chinese companies that have debuted on US exchanges this year, only two are trading above their IPO prices, according to data from Morningstar, an investment research company.

'The drumbeat out of China right now is that certainly there's an air of fraud and of different sets of numbers for Chinese reporting versus US reporting,' said Bill Buhr, an analyst with Morningstar.

'It basically is spooking investors. I think they assume that where there's smoke, there's fire,' he added.

The fallout threatens even firms which have not been tainted by accusations of wrongdoing, such as search engine Baidu, which closed at $117.68 on Friday, a drop of nearly 25 per cent from its intraday high of $156 in April.

Source : New Age 

market Disclosures

Islami Bank

Bangladesh Islamic Centre, one of the corporate sponsors/directors of the bank, has reported its intention to sell 2,440 shares out of its total holdings of 1,90,440 shares of the bank at prevailing market price through the stock exchange within next 30 working days.

Popular Life Insurance Co

Trading of the shares of the company will be allowed only in the spot market and block/odd lot transactions will also be settled as per spot settlement cycle with cum benefit from June 20 to 22. Trading of the shares of the company will remain suspended on record date on June 23.

Delta Life Insurance

Trading of the shares of the company will remain suspended on record date today.

Beacon Pharmaceuticals

Normal trading of the shares of the company will resume today after record date for EGM.

Pioneer Insurance

Md Nasirullah, one of the sponsors/directors of the company, has reported his intention to sell 3,000 shares out of his total holdings of 31,563 shares of the company at prevailing market price through the stock exchange within next 30 working days.

Source: DSE

Source : New Age 

Sega says 1.3m users affected by cyber attack

Japanese video game developer Sega Corp said on Sunday that information belonging to 1.3 million customers has been stolen from its database, the latest in a rash of global cyber attacks against video game companies.

Names, birth dates, e-mail addresses and encrypted passwords of users of Sega Pass online network members had been compromised, Sega said in a statement, though payment data such as credit card numbers was safe. Sega Pass had been shut down.

'We are deeply sorry for causing trouble to our customers. We want to work on strengthening security,' said Yoko Nagasawa, a Sega spokeswoman, adding it is unclear when the firm would restart Sega Pass.

The attack against Sega, a division of Sega Sammy Holdings that makes game software such as Sonic the Hedgehog as well as slot machines, follows other recent significant breaches including Citigroup, which said over 3,60,000 accounts were hit in May, and the International Monetary Fund.

The drama surrounding the recent round of video game breaches paled compared to what PlayStation maker Sony Corp experienced following two high-profile attacks that surfaced in April.

Source : New Age 

Philippines’ Aquino halts foreign-funded work

Philippine president Benigno Aquino III is cancelling or reconsidering foreign-funded infrastructure projects worth $2 billion, saying that although his country badly needs improvements, the contracts are overpriced and technically deficient.

He told The Associated Press in an interview Friday that he has cancelled a Belgian-funded lake dredging project, and ordered a restudy of a Chinese-financed rail line and renegotiation of a French-funded port work.

Aquino has been reviewing infrastructure contracts signed under his predecessor, Gloria Macapagal Arroyo, whose administration has been accused of corruption. He did not accuse anyone involved in the three projects of corruption but said dredging in particular 'is one of the most notorious practices for those who do corrupt practices ... so I have a tendency to be allergic to such projects.'

Aquino cancelled the 18.7 billion peso ($430 million) Belgian project to dredge Laguna Lake, the country's largest fresh water lake, on the southern edge of Manila.

He said the project was supposed to increase the lake's water-holding capacity to ease flooding and provide potable water to the sprawling metropolis, but that the plan was to simply move 424 million cubic feet (12 million cubic meters) of silt from one portion of the lake and dump it on another portion over three years.

'That's where it fell through,' he said.

He said it would be better to spend that money for his government's 21 billion peso ($483 million) conditional cash transfer program to give financial assistance to the poorest 2.3 million Filipino families.

Aquino's year-old administration is fighting graft while wooing foreign investors to partner

with his government to boost the economy and fulfil his promise of easing poverty.

Source : New Age 

Treasury functions launched at BB Barisal branch

The Bangladesh Bank on Sunday introduced full-pledged treasury functions at its Barisal branch after twenty years of the opening of the branch.

Governor of Bangladesh Bank Atiur Rahman inaugurated the treasury functions through a teleconference held at the Barisal branch in the morning on the day.

 Atiur said Bangladesh had started electronic fund transfer, opened helpdesks at BB branches and introduced mobile banking system.

'With the launch of the treasury activities, the BB Barisal branch has been dignified as a full-pledged branch of the central bank,' the BB governor said.

 Golam Mustafa, general manager of the BB Barisal branch, presided over the function. Sudhir Chandra Das, executive director of the bank, opened the treasury section of the branch on behalf of the BB governor.

The BB governor said generally treasury functions were expected to monitor cash positions and corporate spending. But now-a-days, treasurers also perform additional responsibilities of containing expenses through process improvements, reducing process cycle times, managing corporate spending, preventing fraud and misuse, accounting for risk and building vendor relationships.

The BB branch in Barisal was inaugurated on March 2, 1992 and the central bank launched limited banking activities at the branch on February 18, 1998.

Source : New Age 

BB becomes APRACA vice-president

Bangladesh Bank has been selected as the vice-president of the Asia Pacific Rural and Agricultural Credit Association for 2012-14 term.

The central bank won the position after competing with Malaysia, South Korea and Sri Lanka, a BB news release said on Sunday.

The BB has been an active member of the APRACA, established in 1977. Earlier in 1981-82, the BB was selected as the president of this organisation.

Source : New Age 

Catering goods can fetch huge forex from UK: Faruk

Commerce minister Faruk Khan on Sunday said Bangladesh could earn huge foreign exchange by exporting catering goods to the United Kingdom every year.

He also said the non-resident Bangladeshis and investors in the UK could invest in Bangladesh taking advantage of the investment opportunities available in the country.

The minister was speaking at the launching of Bangladesh Catering Expo-2011 at Ruposhi Bangla Hotel in Dhaka.

Director of Trade and Investment of British High Commission Kevin Ringham, Export Promotion Bureau vice-chairman Jalal Ahmed and Bangladesh Catering Expo chairman MK Jaman spoke at the launching ceremony.

The three-day Bangladesh catering expo, first of its kind, will begin on October 3 in London. An array of products, especially catering and furniture, will be put on display at the expo.

Faruk said there was a great potential of Bangladeshi products such as papadum (locally called papor), spices and furniture in the UK. 'Our businessmen should go for exploring the untapped potential market in the UK catering industry'.

The two-way trade is on the rise as both Bangladesh and UK has traded worth over two billion US dollars during the last 11 months.

Referring to Bangladesh's export growth of 41.61 per cent in the first 11 months of the current fiscal year, he said Bangladesh was among few countries that achieved positive growth braving the global financial recession.

Faruk said European Union's new GSP facility that came into effective from January had led to the growth.

Referring to the catering industry mostly owned by Bangladeshi entrepreneurs, Ringham said Bangladesh was contributing to the annual growth of UK's economy.

He said Bangladesh exported goods worth just over 1.130 billion pound to the UK in 2010 while the UK exported goods worth 114 million pound during the same period.

Source : New Age 

Russia unveils $10b direct investment fund

Russia on Friday unveiled a $10 billion sovereign investment fund meant to attract more investors and foreign expertise to diversify and modernise the economy.

The fund, the brainchild of president Dmitry Medvedev, aims to combine budget money with private capital to co-invest in various sectors across Russia.

'We decided that while the Russian economy is very attractive to investors, they don't decide in favour of Russia due to risks and an unfavourable investment climate,' said Sergey Belyaev, head of the economic development ministry's investment department.

'Creating this fund is a way of dividing the risks and can be a financial guarantee that the investor will make money here,' he told a briefing to announce the launch of Russia's Direct Investment Fund.

Although the mechanism and terms are not finalised, the government is promising to put up $2 billion annually for the next five years.

Potential co-investors should have a market capitalisation or annual sales of at least $1 billion, according to a statement distributed Friday. They can invest directly into projects, with the fund's participation not surpassing 49 per cent.

The fund is being set up as a subsidiary of the Vneshekonombank state development bank, although the state will aim to withdraw from the projects' capital within five to 10 years, officials said.

The fund's transparency will be ensured by a supervisory board that 'will consist of some Russians and some international (figures) ... it will be about the same number (of each),' fund director Kirill Dmitriyev said.

'If we can't make it transparent, easy to understand and clean, it will not work,' he said.

Investment bankers welcomed the project's co-investment idea while warning it would have to tackle a negative perception of Russia among new foreign investors who fear the country's record of corruption and bureaucracy.

British trade minister Lord Green called it a 'good concept' but said it should not be 'an alternative to addressing wider issues of governance, transparency, democracy' and other issues.

Blackstone Group chief executive Stephen Schwarzman said the fund 'is fairly attractive (when) compared with just showing up and making your way in a highly complex environment.'

Medvedev on Friday listed the fund as a key to Russia's future and promised future growth irrespective of who heads the country — a reference to a 2012 presidential election that may be contested by prime minister Vladimir Putin.

The economic development ministry's Belyaev also dismissed concerns that uncertainty about Russia's leadership may be scaring off investors.

Source : New Age