Participation of pvt sector in uplifting poor stressed

News Report

Industries Minister Dilip Barua underscored the need for active participation of private sector in uplifting the economic status of the poor and involving them in different social projects.
He was speaking at the inaugural session of a workshop on the Bangladesh Social Enterprise Project (BSEP) organized by the Bangladesh Enterprise Institute (BEI) at the BEI conference.
Barua expressed the hope that the project aims to utilize key strengths of the private sector to address some of the poverty related issues of the country and is hopeful that the project can further reinforce their objective to help people by giving them both access and opportunity to work for the poor and to help them through different entrepreneurial endeavors.
He also appreciated BEI’s efforts in encouraging the local private sector to directly venture into the social development of the country and work for poverty alleviation.
Deputy Head of DFID Richard Boulter set the stage for the workshop by introducing the concept of Social Enterprise and explaining DFID’s rationale behind supporting the project.
Chairman of Unnayan Shamannay Dr. Atiur Rahman was present as the special guest.
He said that Bangladesh will be able to achieve an exemplary economic growth rate in the midst of financial crisis, if it can successfully implement public private partnership to facilitate the concept of social enterprise.
“At the crux of the global financial crisis, there could not have been a better time to raise the issue of a business structure that generates profit and also serves the society,” he said.
The workshop was moderated jointly by President of BEI Farooq Sobhan and Director of FBCCI Aftab Ul Islam.
Dr. Fazle Hasan Abed, Founder and Chairperson, BRAC, presented a keynote speech at the workshop, preceded by a documentary on BRAC. Dr. Abed believes that social enterprise can be both profit and non-profit, and the business models can differ accordingly.
In his speech, he focused on the importance of making social enterprise initiatives effective and efficient, with the help of proper management and empowerment of beneficiaries. By giving examples of the ventures that BRAC has gone into since its inception, Dr. Abed shared the process that BRAC has followed in building each of its programs.
He said he hopes to build partnership with the private sector in the future, in order to undertake more sustainable endeavors. He urged the Bangladesh Enterprise Institute to extend strong advocacy in the field of tax structure reform that can help facilitate social enterprises in the country.
During the workshop, experiences and perspectives were shared on three chosen examples of Social Enterprise in Bangladesh; Click Diagnostics, CARE Bangladesh and Grameen Bank’s initiatives.
Nasim Manzoor, Managing Director, Apex Adelchi Footwear Ltd, And Suraiya Huq, Executive Director, Phulki, also spoke on the occasion.
Craig Wilson, Executive Director, FDC and Peter Wilson and Senior Adviser, Libra Advisory Group, conducted interactive exercises.

China auto sales surpass US for 3rd month

SHANGHAI, Apr 8: Preliminary figures show auto sales in China reached about 1.03 million in March, exceeding U.S. sales for the third month in a row, state media reports said Wednesday, reports AP.
Data from 14 major auto makers, accounting for roughly 90 percent of total sales, totaled 1.026 million, the Shanghai Securities News and other state-run newspapers said, citing Chen Bin, head of the Department of Industry at China’s main economic planning agency.
Full industry data due to be released by the China Association of Automobile Manufacturers in coming days could push March auto sales in China, the world’s second-largest auto market, to a monthly record, the reports said. China’s industrywide auto sales in March 2008 totaled 1.06 million, it said. Americans bought 857,735 new vehicles in March, down 37 percent from the 1.36 million sold in the same month a year earlier, according to Autodata Corp.
But a 25 percent jump in U.S. sales from February raised hopes that the worst may be over for an industry battered by global economic malaise and financial catastrophe.
China is bound to eventually overtake the U.S. as the world’s largest auto market, and recent developments have accelerated that trend, with Chinese vehicle sales in January and February exceeding U.S. monthly sales for the first time ever.
China’s first-quarter sales may exceed those in the U.S., Chen told a shipbuilding conference in Beijing. Sales for the full year are forecast to exceed 10 million units for the first time ever.
With sales slumping elsewhere, China is one of the few bright spots for the ailing industry.
General Motors Corp. said Wednesday that it sold 137,004 vehicles in China in March, up 24.6 percent from a year earlier. Its minivehicle joint venture, SAIC-GM-Wuling, saw sales surge 38 percent to 90,784 vehicles.
But China’s promise is also a curse for automakers facing ever intensifying competition among both domestic and foreign manufacturers.

G20 protest video puts police on spot over death

LONDON, April 8: Police came under mounting pressure today after a video emerged showing a riot officer push a man violently to the ground, shortly before he died during last week’s G20 protests in London, reports AFP.
A police watchdog body is already investigating the death of Ian Tomlinson, 47, who suffered a heart attack while walking home from work during the protests last Wednesday, on the eve of the G20 summit.
But the amateur video, obtained by the Guardian newspaper, triggered more questions from the family, and a call from opposition politicians for a criminal investigation.
“This video clearly shows an unprovoked attack by a police officer on a passer-by. It is sickening,” said David Howarth, justice spokesman for the opposition Liberal Democrats.
“There must be a full-scale criminal investigation. The officer concerned and the other officers shown in the video must immediately come forward.”
The Independent Police Complaints Commission, which probes allegations involving officers, said it would study the video footage as part of its investigation into the incident.
“We will be assessing this along with the other statements and photographs that have already been submitted,” said an IPCC spokeswoman.
A Scotland Yard spokesman declined to comment on the video, saying: “It would not be appropriate to comment while an IPCC investigation is ongoing.”
The video shows Tomlinson, who was walking home from his job at a newsagent, walking with his hands in his pockets in front of a line of officers, one of whom shoves him and causes him to fall on the ground.
The Guardian said a police officer also appeared to strike Tomlinson with a baton, hitting him from behind on his upper thigh, although this was not clear from the published footage.
Police said at the time that they had been alerted by a passer-by that Tomlinson had collapsed and was not breathing, and claimed protesters threw bottles and other debris at them as they tried to revive him.
Tomlinson was later pronounced dead in hospital. His family has appealed for anyone with any information about how he died to come forward.
The video was shot by a fund manager from New York shortly before Tomlinson died, the Guardian said.
Tomlinson’s son Paul King, 26, said the video raised many questions about his father’s death. “Whether that was a cause to his death we are not to know,” he said, cited by the Guardian.
“We want answers: why? Ian clearly had his arms in his pockets and back towards the police. There is no need for them to step in towards him. It clearly shows that Ian did have an altercation.
“Now we can say, yes he did. Up until now it has been ‘if’. But now we’ve seen it, we want answers.”

Strong demand for South Korea’s state bond

SEOUL, April 8: Buoyed by strong demand, South Korea hopes to complete by Thursday the sale of its first dollar- denominated sovereign bond issue since November 2006, a minister said, reports AFP.
“The sale of foreign currency stabilisation bonds is expected to be completed today or tomorrow,” Minister of Strategy and Finance Yoon Jeung- Hyun told parliament Wednesday. His ministry declined to give the size of the issue.
Dow Jones Newswires quoted sources as saying the government wants to raise up to three billion dollars in a two-part global offering of five and 10- year bonds, and demand has now reached about 5.8 billion dollars.
“We are going ahead with the sale as uncertainty has been removed,” Yoon said, adding North Korea’s rocket launch Sunday did not create geopolitical risks.
“Demand from investors is strong, reflecting improved market conditions” at home and abroad, a ministry official told AFP on condition of anonymity.
A successful sale will help the government expand its foreign currency reserves which stood at 206 billion dollars at the end of March, he said.
“That will also help local banks raise funds abroad” by bolstering investor confidence, he said.
“Investors appeared to have been influenced by our recent economic data as well as a deluge of stimulus measures by other countries which have improved global market conditions,” he said.
Asia’s fourth largest economy is seeking to persuade investors it will have little difficulty extending foreign debt obligations due this year and estimated by analysts to total 194 billion dollars. The government says this estimate includes debt for foreign currency hedging by shipbuilders, which is set to decrease as orders fall.
South Korean banks had been under severe pressure to extend repayment deadlines on debt obligations until the government last October announced a guarantee worth up to 100 billion dollars on their overseas borrowings.
The guarantee was Tuesday extended by six months to the end of this year. The export-driven economy has been hard hit by the global slump as overseas markets shrink. Finance Minister Yoon has said it will likely contract two percent this year while private analysts see a sharper downturn.
Industrial output dropped 10.3 percent in February year-on- year, the fourth consecutive month of double-digit contraction. But the February data was better than some analysts estimated.

Cut in federal funds to hit mega projects

PESHAWAR: Apr 8: The federal government has hinted at over 40 per cent cut in the size of Public Sector Development Programme (PSDP) owing to financial constraints, affecting implementation of a number of mega projects in Frontier province, reports PST.
‘The Planning Commission, which oversees execution of PSDP, has recently communicated to the provinces that the size of PSDP was going to be reduced by more than 40 per cent,’ an official told Dawn here on Tuesday.
The official said that prime minister had already approved to cut the size of the Rs541 billion PSDP by Rs100 billion in the current fiscal year, however, further decrease in the allocation was also on the cards.
The Planning Commission, the official said, had communicated to the provinces the expected decline in the funds availability along with a list of projects, which were going to be affected by the cut.
The official said that the cut would mostly affect execution of new projects, as those ongoing projects, which were about to be completed or were in the middle of their implementation schedule would continue to get funds inflow as per the plan.
The PSDP for current fiscal year carries 61 uplift projects, which are being implemented in NWFP with total estimated cost of Rs247.25 billion. The current year allocation for these projects was Rs8.094 billion.
The sector-wise allocation for current year and number of PSDP schemes in NWFP include; health with Rs1.978 billion, education and training sector with Rs384.850 million, food, agriculture and livestock sector with Rs1.884 billion, environment sector with Rs335 million, finance sector with Rs161 million.
Similarly, industries with Rs300.558 million, planning and development sector with Rs203.100 million, water and power sector with Rs2.323 billion, population welfare with Rs21 million, narcotics control with Rs377.810 million and access to justice programme carries an allocation of Rs108.320 million in the current fiscal year.
The official said that as per the Planning Commission list, the projects in health, water and power, environment and education would be affected owing to non-availability of funds in the current fiscal year.
Development cycle, the official said, in NWFP was already hit because of paucity of resources and growing cost of security related expenditures in the current financial year.

Sadharan Bima earned Tk 456 cr last year

Sadharan Bima Corporation (SBC) earned a total of Taka 455.75 crore as direct premium and re- premium in 2007, reports UNB.
The income of SBC as premium stood at Taka 126.58 crore in 2007 from Taka 12.06 crore in 1973 while the income from domestic and foreign re-premium totaled Taka 329.16 crore, 12.96 percent higher than that in 2006. This was informed at a meeting of the Parliamentary Standing Committee on Public Undertakings, held at the Jatiya Sangsad Bhaban here today with its chairman Dr Mohiuddin Khan Alamgir presiding, an official handout said.
It was also told at the meeting that the total claims of Taka 1,171 crore including Taka 42.84 crore as arrears were settled from 1973 to 2008. Besides, a total of 167 insurance claims are awaiting disposal while 704 such cases are pending with different courts, the handout said.
The committee members thoroughly reviewed SBC’s audit report at the meeting and gave several specific instructions regarding insurance in non- agriculture sector, introducing crops insurance and speeding up payment against the outstanding claims.
They also stressed the need for simplifying the procedure of resolving claims to increase flow of funds for the people, the handout said.
Committee members Dr TIM Fazle Rabbi Chowdhury, Md Khaledur Rahman Titu, Dhirendra Debnath, Moin Uddin Khan Badal and SK Abu Baker attended the meeting. Additional Secretary of Finance Ministry Shafiqur Rahman Patwari, Chief Controller of Insurance Molla Mansur Ahmed, Joint Secretary of the Parliament Secretariat Md Shahabuddin, among other senior officials, were also present.

BSIA demands solution to sick units’ problems

Bangladesh Sick Industries Association (BSIA) Wednesday placed a package of demands with Commerce Minister Col (rtd) Faruk Khan, including loan waiver, to relieve the debt-ridden entrepreneurs of accumulated dues to government, reports UNB.
Leaders of the association sought government cooperation by way of withdrawing all kinds of interest on default loans and scope for repaying all dues in 15 annual installments.
The BSIA leaders also urged the minister to bring all the 3,499 sick industries-projects under a legal framework and demanded a law - Bangladesh Sick Industries Law’—to solve their problems for their rehabilitation.
They came up with the demands when a delegation led by its President Chowdhury Mohammad Ishaq met the Commerce Minister at his office Wednesday. Appreciating their suggestions, Faruk Khan said the government would take requisite steps to solve the problems of sick industries to pace up country’s economy.

New corporate communications head at Emirates

Emirates, the Dubai-based international airline and travel services group, has appointed Boutros Boutros as its new divisional senior vice president, corporate communications, said a press release.
In his new role as head of corporate communications, Boutros will oversee all marketing and communications activities across the globe for the 40-plus businesses under the Emirates group umbrella, a remit which includes, advertising, sponsorships, events and merchandising, media relations and internal awareness, internet communications, and passenger communications and visual services.
Boutros started his 18-year career at Emirates as media relations manager for the Middle East, quickly expanding his remit to become responsible for worldwide media relations, later becoming vice president of media relations and promotions. In 2006, he was promoted to SVP-media relations, sponsorships and events.
Over the years, Boutros has played a key role in building the company’s global brand presence through strategic sponsorships and integrated marketing communications programmes.

World stocks slide further

LONDON, Apr 8: Asian and European equities fell sharply again on Wednesday after overnight losses on Wall Street, where worries about the earnings season were underscored by a huge loss at US aluminium giant Alcoa, reports AFP.
In late morning trading in Europe, the London market fell 0.82 percent, Frankfurt shed 0.95 percent and Paris lost 0.99 percent in value.
In Asia, Hong Kong slid more than 3.0 percent, Tokyo dipped 2.69 percent and Sydney finished down 2.34 percent, with financial and resources stocks hit the hardest. Markets throughout the region were showing losses.
This followed a dismal day of trading on Tuesday in the United States, where the Dow Jones Industrial Average dropped 2.3 percent.
The US corporate earnings season got off on a sour note as Alcoa posted a quarterly net loss of 497 million dollars, with prices and demand down dramatically in the face of the global slowdown.
“Alcoa’s first-quarter 497-million-dollar loss is weighing heavily on sentiment,” said VTB Capital analyst Ivan Ivanschenko on Wednesday.
“Importantly, it also sets the tone for the whole reporting season and... (the) chances are (that) we shall see further weakness as investors realise that hopes of an economic recovery contrast markedly with corporate earnings.”
World stock markets had plunged on Tuesday into negative territory on gloomy growth forecasts in Asia and news that the eurozone economy sank deeper into recession last year than had been feared.
“Here we go again,” said analyst Stuart Bennett at Calyon, the investment banking arm of French bank Credit Agricole.
“Another poor performance by stocks, disappointing figures from Alcoa and the prospect that Q1 earning season will produce similarly sluggish figures from other companies has prompted the market to question the sustainability of the recent rise in global bourses,” he added.
On Wednesday, the Hong Kong market was worst off, with the Hang Seng index handing back 3.04 percent, more than 450 points, to 14,474.86.
Francis Lun, general manager of Fulbright Securities, a Hong Kong brokerage, said that investors in Asia were “scrambling for an exit” after the tumble on Wall Street.
“It is all the fault of the US market,” Lun said. “Everyone is dumping financial stocks after George Soros said the banks were no good.”
Soros, the billionaire hedge fund manager, had said Tuesday that the month-long rally in the United States was a bear-market rally because the economy was still shrinking.
Investors have been especially worried about the troubled financial sector—concerns that deepened following a newspaper report highlighting the depth of the bad asset problem plaguing institutions.
According to the Times newspaper of London, new forecasts from the International Monetary Fund (IMF) are set to suggest that toxic debts racked up by banks and insurers could reach four trillion dollars.
The IMF said in January it expected the deterioration of US-originated assets to reach 2.2 trillion dollars by the end of 2010, but it is understood to be looking at raising that to 3.1 trillion dollars in its next assessment of the global economy, due to be published later this month, the report said.
In addition, the IMF was likely to forecast 900 billion dollars for toxic assets that originated in Europe and Asia, the Times said.

Gloom grips braced for US earnings season

WASHINGTON, April 8: Investors braced yesterday for the US corporate earnings season that many expect will be brutal as the prolonged recession bites, and data showed a steeper contraction in the eurozone, reports AFP.
Pessimism gripped financial markets, particularly stock markets, as the US corporate earnings season got under way and concerns mounted about the embattled banking sector.
“Doubt has returned,” Briefing.com analysts said.
“There is plenty of reason to suspect that this is not a typical cycle and that the market perhaps got ahead of itself” in posting a four-week Wall Street rally, they said in a client note.
Financial sector concerns hammered markets after a newspaper report highlighted the depth of the bad asset problem plaguing institutions.
According to the Times of London, the International Monetary
Fund (IMF) will project troubled assets racked up by banks and insurers will rise to four trillion dollars,
The IMF said in January that it expected the deterioration in US-originated assets to reach 2.2 trillion dollars by the end of 2010, but its next forecast sees 3.1 trillion dollars, the report said. In addition, the IMF was likely to forecast 900 billion dollars for toxic assets originated in Europe and Asia, the Times said.
The IMF declined to comment on the report.
“Financials are ... under pressure after the London Times reported the International Monetary Fund was set to forecast that the ‘toxic assets’ that are clogging banks’ balance sheets could reach four trillion dollars,” said analysts at Charles Schwab & Co. brokerage.
US banks begin reporting earnings next week.
Wachovia Securities chief market strategist Al Goldman underlined “continued concern over the financial institutions.”
“The market is more vulnerable to the expected poor first- quarter earnings’ and disappointing management’ outlooks given the recent sharp advance in stocks,” Goldman warned.
News of a deeper than expected recession in the eurozone, a massive contraction projected for Ireland, and a World Bank forecast of slowing growth in East Asia also stoked fears the global economic downturn has no end in sight.
The Eurostat statistics agency said the eurozone suffered a 1.6 percent contraction in the 2008 fourth quarter, slightly worse than the prior 1.5 percent forecast. It was the bloc’s third consecutive quarterly contraction.
“The negative European GDP numbers were worse than expected,” said Manus Cranny, markets commentator at MF Global Spreads in London.
“They are a stark reminder that 2009-2010 is going to be an incredibly tough year.”
Ireland, once the eurozone’s booming “Celtic Tiger” economy, slashed its growth forecasts in an austerity budget that includes tax hikes and spending cuts as the country struggles to cope with ballooning deficits amid recession.
The country projects gross domestic product (GDP) will shrink at an annual rate of 7.7 percent this year, and contract 2.9 percent in 2010. It had previously forecast a 6.75 percent contraction for 2009.
“We are the living witnesses to the most dramatic collapse in the world financial order since 1929,” Finance Minister Brian Lenihan told lawmakers in Ireland’s lower house of parliament.
Outside the 16-nation eurozone, data showed Britain’s February manufacturing output declined for the 12th consecutive month, plunging by a hefty 13.8 percent, its largest annual decline in 28 years.
Stocks were mostly lower in Asia as the World Bank cut its growth forecast for developing East Asia and warned of a “painful surge” in unemployment.
With markets still digesting news of a new Japanese stimulus package to revive Asia’s largest economy, Japan’s central bank held unchanged its super- low 0.1 percent interest rate, hoping to pull out of the worst recession in decades.
European stock markets fell and US shares ended sharply lower ahead of the January-March earnings reporting season, which kicked off after the market close with aluminum giant Alcoa, a Dow component.

AIG aircraft seeks $5b Fed credit line

NEW YORK, Apr 8: American International Group Inc’s (AIG.N) aircraft leasing unit is in talks over a $5 billion credit line from the New York Federal Reserve that could be used to facilitate its sale, the Financial Times reported on its website late on Tuesday, reports Reuters.
People close to the situation told the paper that discussions between International Lease Finance Corp (ILFC), AIG and the New York Fed were still ongoing and no decision had yet been taken on whether the facility would be provided or how big it would be.

China loans hit record high in March

SHANGHAI, April 8: Chinese banks lent a record amount of money in March as they respond to government calls for growth-boosting measures, state media said today, reports AFP.
New loans from all banks in March totalled an estimated 1.87 trillion yuan (270 billion dollars), the most ever lent in one month, the Shanghai Securities News reported, citing an unnamed official at a financial institution.
The figure is significantly higher than other estimates for March lending, which range from 1.3 trillion yuan to 1.6 trillion yuan.
The newspaper is controlled by the China Securities Regulatory Commission, the securities market watchdog.
New loans reached 1.62 trillion yuan in January and 1.07 trillion yuan in February, as banks heeded Beijing’s calls to increase lending to help boost growth amid the global financial crisis.
If confirmed, the lending figure for March would bring the new loans extended in the first quarter to 4.6 trillion yuan, close to the five trillion yuan Beijing has set as the minimum banks must lend for the year.
It has so far announced no upper limit for bank credit this year.
However, the lending spree has forced the China Banking Regulatory Commission to pay more attention to risk control, the newspaper cited the official as saying.

World can overcome crisis: Medvedev

MOSCOW, April 8: Russian President Dmitry Medvedev, citing optimism in the wake of the G20 summit, expressed confidence yesterday that the world could turn the page on the financial crisis in little over a year, reports AFP.
The G20 summit “seems to me a very positive signal and testimony that we can overcome all consequences of the crisis in the near future,” Medvedev said, speaking at an Italian investment forum in Moscow.
“We are not talking about a matter of decades, but this year or next year,” he added.
The comments appeared to represent a change of tone for the Russian leader who, commentators said, had until now been lukewarm on the results of the epic Group of 20 anti-crisis summit in London last week.
“Initially, I had some pessimistic feelings ... but the final communique was different from that in Washington (the previous meeting) and contained concrete proposals,” Medvedev said.
Russian Prime Minister Vladimir Putin, meanwhile, said on Monday that despite certain difficulties in 2009, Russia had “avoided a worst-case scenario.”
“The economy has proven its ability not just to survive but to develop in new, less favourable conditions,” Putin said as he presented his government’s anti-crisis plans before Russia’s lower house of parliament.

Dollar up in Asia on risk worries

TOKYO, April 8: The dollar climbed against the yen and the euro in Asia today as worries over the shaky US financial system and weak corporate earnings reduced demand for risky assets, reports AFP.
The dollar rose to as high as 100.85 yen as one point, approaching recent five-month highs. In late morning Tokyo trade it stood at 100.64, up from 100.38 in New York late Tuesday.
The euro slid to 1.3207 dollars from 1.3273 and to 132.92 yen from 133.25.
“The dollar continues to be bought for its safe-haven status rather than because of a sense of optimism” towards the economy, said Hachijuni Bank forex strategist Sho Komamura.
Hopes of a global economic recovery were dampened by a report in the Times of London that the International Monetary Fund will warn that toxic assets plaguing world banks could mount to four trillion dollars.

Australian consumer confidence surges

SYDNEY, April 8: Australian consumer confidence surged in April as billions of dollars in government stimulus measures gained traction, a survey said today, reports AFP.
The Westpac-Melbourne Institute consumer sentiment index was 92.7 points in April, up 8.3 percent month-on-month and a 6.1 percent increase from a year ago.
“This is a surprisingly strong result,” said Westpac chief economist Bill Evans. “A further positive response to the fiscal stimulus package is likely to be buoying consumers.”
One-off cash payments of up to 900 dollars (640 US) began rolling out this week to more than seven million Australian taxpayers as part of the centre-left Labor government’s 42 billion dollar bid to kick-start spending.
Evans said anticipation of the cash was likely to be a key factor behind the surge in consumer expectations, which was supported by a boom in global share markets and the Australian dollar, and falling petrol prices.
The April figure ended three consecutive months of falling confidence, and was the first positive reading for 2009. But Evans cautioned against overly optimistic conclusions.
“We note that in the early stages of the last recession the index also appeared to have recovered from its lows,” said Evans.
“Given the disturbing signals from all the leading employment indicators, which are pointing to a rapid increase in the unemployment rate over the next 18 months, we are likely to see the index reaching new lows over that period.”
Analysts expect jobs figures due out Thursday to show a 0.1 percent increase in unemployment to 5.3 percent, and it is forecast to move towards seven percent in coming months. Evans noted the survey was taken ahead of a “surprise” 25 basis point cut to the official cash rate to 3.0 percent, announced Tuesday by the central bank.
“The Bank is now likely to remain on hold until around August, when rate cuts will be needed to deal with a more concerning global and domestic economic environment,” he said.

Pak T-bill rates may rise by up to 50 basis points

KARACHI: Apr 8: Treasury bills rates may experience another increase of up to 50 basis points due to shortage of liquidity in the market creating a conducing environment for keeping the interest rate high at the current level.
The cut-off yields were slashed largely in late February and in second week of March, which cumulatively reduced the yields by 220 basis points. It was taken as a sign that the State Bank was planning to reduce the policy interest rate from 15 per cent elevated in November, 2008 as part of the agreement with the International Monetary Fund.
In the last auction the yields on T-bills were increased by up to 11 basis points giving a sign of reversal like situation. ‘The T-bills cut-off yield on Wednesday may increase by 25 to 50 basis points due to liquidity shortage in the money market,’ said Mohammad Sohail, a leading analyst.
In the last auction held on March 25, the 12-month T-bills cut-off yield was increased to 10 basis points to11.95 per cent. Market dealers said this 12-month paper was traded at 12.25 to 12.40 per cent in the money market on Tuesday, which reflects clearly that the money market was short of liquidity.
The last auction also witnessed increase in the cut-off yield of benchmark 6-month paper by 11 basis points to 11.89 per cent.
Until recently, the banking system was floating with the ample liquidity as the outflows to the corporate sector and the entire private sector fell sharply to just one third of what it was last year.
However, the massive borrowing by the government and organisations under its umbrella sucked up the liquidity.
The State Bank last week announced that it would raise Rs350 billion from the market through T-bills till the end of the current fiscal.
The liquidity shortage emerged due to massive government borrowing, higher lending to public sector enterprises and outflow of liquidity to National Saving Scheme.
In the first nine months, the government borrowed over Rs100 billion through commercial banks while during the same period of last year it retired Rs97 billion.
The public sector enterprises borrowed over Rs63 billion against Rs22 billion of the last year. The government recently accumulated Rs80 billion through 10 commercial banks by selling Terms Finance Certificates to pay off the stuck-up circular debts of the oil marketing companies.
The government has mobilised Rs75 billion through National Saving Scheme (NSS) in first seven months of the current fiscal while it gathered Rs86.6 billion during the same period last year.
The shortage of liquidity provides an opportunity to the State Bank to carry on with the policy interest rate (discount rate) at current level of 15 per cent.
This high interest rate has already crippled the industry and trade, which forced the economy to contract instead of growing. Demand for lowering of interest rate is strong but the IMF has recently suggested Pakistan not to change its policy interest rates ‘unless the inflation falls decisively.’
The advice came with the approval of second IMF tranche of $848 million, which made it significant. A senior banker doubted that the SBP was making ground to keep the interest rate at the present level or reduce it insignificantly.

US newspaper owners ‘mad as hell’

WASHINGTON, April 8: US newspaper owners, their advertising revenue evaporating, their circulation declining and their readership going online to get news for free, are fighting mad, reports AFP.
The enemy? Websites that use their stories without paying for them.
“We are mad as hell, and we are not going to take it any more,” said the chairman of the Associated Press, a cooperative of over 1,400 US newspapers, borrowing a line from the anchorman character in the 1976 movie “Network.”
“We can no longer stand by and watch others walk off with our work under misguided legal theories,” Dean Singleton said at a meeting this week of the Newspaper Association of America (NAA) in San Diego, California.
Singleton’s battle cry came just a few days after News Corp. chairman Rupert Murdoch launched a broadside against Internet giant Google, whose Google News website is one of the most popular news aggregators on the Internet.
“Should we be allowing Google to steal all our copyrights?” asked Murdoch, the owner of newspapers in Australia, Britain and the United States, where his holdings include The Wall Street Journal and New York Post.
“Thanks, but no thanks,” the News Corp. chairman said.
Robert Thomson, the managing editor of The Wall Street Journal, used even harsher language than his boss in describing the situation.
“There is no doubt that certain websites are best described as parasites or tech tapeworms in the intestines of the Internet,” Thomson said in an interview with the newspaper The Australian.
“It’s certainly true that readers have been socialized—wrongly I believe—that much content should be free,” he said. “And there is no doubt that’s in the interest of aggregators like Google who have profited from that mistaken perception.”
The salvos by Singleton, Murdoch and Thomson appear to have been uncoordinated but they reflect rising anger among an industry facing a deepening crisis.
Two newspapers, the Rocky Mountain News of Denver, Colorado, and the Seattle Post-Intelligencer, have shut down in recent weeks and several big newspaper groups have declared bankruptcy, including the Tribune Co., publisher of the Chicago Tribune, Los Angeles Times and other dailies.
Hearst Corp., owner of the San Francisco Chronicle, has
threatened to shut down the paper unless unions agree to major staff cuts and The New York Times Co. has threatened to close the Boston Globe unless unions there do the same.
According to the NAA, last year was the worst ever for the US newspaper industry with print advertising revenue falling 17.7 percent and even online advertising revenue dropping—by 1.8 percent.
The decline in print advertising revenue has been exacerbated by the global recession but the more fundamental problem according to media analysts is that the business model that has sustained the industry for decades is broken.
The counter-attack by US newspaper owners has met with a mixed reaction from analysts, with some saying it’s about time they went on the legal offensive to defend copyright and others saying they’re wasting their time.
“What the AP is doing now, like many newspapers, is too little too late in recognizing the threat of the Internet,” said Tom McPhail, professor of media studies at the University of Missouri, St. Louis.
“The court system is too slow for their needs and purposes,” McPhail told AFP. “They need a short term victory and that isn’t going to happen.”

German exports plunge further in February

FRANKFURT, April 8: Germany, the world’s leading exporter last year, has suffered a second sharp 12-month drop in exports, provisional February data from the national statistics office showed today, reports AFP.
German exports shed a record 23.1 percent while imports declined by 16.4 percent, the Destatis office said.
In January, German exports had already plunged by 23 percent on a 12- month basis, Destatis said, revising an intitial estimate lower as the collapse of global trade slammed Europe’s biggest economy.
“The nightmare for German companies is not over yet,” UniCredit economist Andreas Rees said. “There are few signs that exports will stop shrinking anytime soon.”
On a monthly basis, exports slipped by just 0.7 percent in February but that was because Destatis had revised January’s level lower, Rees noted.
When calculated over two months, the January-February level was “a whopping 13.7 percent” lower than at the end of 2008, he said.
Forward looking indicators signalled more pressure on exports until at least mid-year, the economist said, though in terms of overall economic activity, “the first quarter was the absolute trough,” he forecast.
The luxury car maker Daimler, which relys heavily on export markets, said Wednesday it expected a “clearly negative” result in the first three months of 2009, and no improvement before the second half of the year.
And the boss of shipping container group Hapag-Lloyd told the Frankfurter Allgemeine Zeitung newspaper “there will be clear cuts” in the number of jobs at the company.
“We should be alarmed by the economic conditions in our sector,” Michael Behrendt added.
Because imports also slumped heavily, Germany posted a trade surplus of 8.7 billion euros (11.5 billion dollars) in February, but that was nearly half the 17.1 billion euros recorded in February 2008, Destatis said.
The biggest drop in exports was seen in trade with other European Union members, which recorded a fall of 24.4 percent, while exports to non-EU countries were down by 20.6 percent.

Swiss freeze money for OECD

ZURICH, April 8: Switzerland has frozen a financial contribution to the OECD in protest at being included on the organisation’s tax havens list without being consulted, the economy ministry said today, reports AFP.
“Switzerland used its veto rights” to withhold 136,000 euros (179,315 dollars) earmarked for cooperation between the Organisation for Economic Cooperation and Development and the Group of 20 countries, ministry spokeswoman Rita Baldegger said.
“The amount is relatively modest but its a symbolic and strong gesture, a protest,” she told AFP.
G20 leaders are using the OECD’s listing of compliance with its international tax exchange standard as a basis for a crackdown on secretive offshore havens.
Switzerland was classified on a ‘grey’ list of about 40 countries which have pledged to comply but have not yet substantially implemented the standard.

Turkey’s output plummets 23.7pc

ANKARA, April 8: Turkey’s industrial output plunged by a record 23.7 percent in February on a 12-month comparison, after a sharp drop in January, official data showed today, reports AFP,
Output in January this year had dropped by 21.3 percent from the level in January 2008.
The data for February, published by the Tuik statistics institute, marked the seventh month running of decline.
In the whole of 2008, industrial output fell by 0.4 percent from the level in 2007 which had shown growth of 6.9 percent.
Turkey and the International Monetary Fund have been negotiating since January over a new IMF loan which would take over from a three-year loan of 10 billion dollars (7.6 billion euros) which expired in May of last year.
That arrangement enabled Turkey to stabilise its economy.

Asia stock mkt down

HONG KONG, April 8: Stock markets across Asia were sharply down again today after losses overnight on Wall Street, where worries about the earnings season were underscored by gloomy news from aluminium giant Alcoa, reports AFP.
Hong Kong slid more than 4.0 percent, Tokyo was off more than 3.0 percent and Sydney was down 2.0 percent in intraday trade. Markets throughout the region were in negative territory.
It followed a dismal trading day Tuesday in the United States, where the Dow Jones Industrial Average dropped 2.3 percent and the S&P 500 shed 2.4 percent.
The US corporate earnings season got off on a sour note as Alcoa posted a net loss of 497 million dollars, with prices and demand down dramatically in the face of the global slowdown.
Hong Kong was worst off, with the Hang Seng giving up 4.05 percent, more than 604 points, to 14,324.75 in the morning session.
Francis Lun, general manager of Fulbright Securities, a Hong Kong brokerage, said investors in Asia were “scrambling for an exit” after the tumble on Wall Street.
“It is all the fault of the US market,” Lun said. “Everyone is dumping financial stocks after George Soros said the banks were no good.”
Soros, the billionaire hedge fund manager, said Tuesday that the month-long rally in the United States was a bear-market rally because the economy was still shrinking. Investors have been especially worried about the troubled financial sector—concerns that deepened following a newspaper report highlighting the depth of the bad asset problem plaguing institutions.

TRADE NOTES

Gold prices pick up from ten-week low

LONDON, April 8: The price of gold advanced yesterday, one day after hitting a ten-week low point as the market was rattled by the prospect of the IMF selling some reserves, reports AFP.
On the London Bullion Market, gold prices rose to 881 dollars an ounce, from 870.25 dollars an ounce late on Monday.
The precious metal had tumbled in intra-day trade on Monday to 865 dollars per ounce—a level last seen on January 23.
Gold fell under 900 dollars last Thursday after G20 world leaders agreed at a key London summit to sell International Monetary Fund (IMF) gold reserves to provide financing for the world’s poorest countries.
“Although the selling of gold by the IMF would put downward pressure on gold prices, we expect that any sale under the current proposals would likely have a limited impact,” cautioned Goldman Sachs analyst David Greely.
“The actual price impact would likely be much less as gold buying remains well-above last year’s pace and US real interest rates remain low, providing longer-term support to gold prices.
“Further, increased buying by central banks could offset some of the impact of an IMF sale.”

Oil prices dive in Asian trade

SINGAPORE, April 8: Oil prices fell in Asian trade today after concerns over weak corporate earnings sent global stock markets tumbling, analysts said, reports AFP.
New York’s main futures contract, light sweet crude for delivery in May, slid 91 cents to 48.24 dollars a barrel after falling below the 50-dollar mark at the close of US trade on Tuesday.
Brent North Sea crude for May delivery shed 60 cents to 50.62 dollars.
A weak showing on Wall Street and a stronger US dollar were among the factors pulling energy prices down, analysts said.
“When equities are weak and the dollar firm, this market has nowhere to hide,” said Peter Beutel, president of US energy consultancy Cameron Hanover in a note to clients.
A strengthening dollar makes dollar-priced crude more expensive for buyers using other currencies and therefore tends to dampen demand.
Traders also expect more bad news as the US corporate earnings season gets under way, with concerns high about the troubled banking sector.
“The quarterly corporate earnings reports that will be issued in coming days will probably not contain much to applaud,” said Mike Fitzpatrick, an analyst at MF Global.
Crude oil prices rallied last week after world leaders attending the Group of 20 summit in London on Thursday pledged to fight the global crisis together, stoking hopes of an eventual recovery.

Japanese bankruptcies hit 6-year high

TOKYO, April 8: Japanese corporate bankruptcies surged to a six-year high last month as more than 1,500 firms collapsed under the weight of a deepening recession, a survey showed Thursday, reports AFP.
Bankruptcies rose 14.1 percent in March, marking a 10th straight year-on- year increase, Tokyo Shoko Research said.