Arbitration centre launched to settle business disputes in Bangladesh

The first arbitration centre to settle business disputes was launched in the country on Saturday.

The law minister, Shafique Ahmed, inaugurated the Bangladesh International Arbitration Centre, sponsored by the International Chamber of Commerce, the Dhaka Chamber of Commerce and Industry and the Metropolitan Chamber of Commerce and Industry with support from the International Finance Corporation, UKAid and the European Union, in a ceremony at the Bangabandhu International Conference Centre.

Shafique said that the arbitration centre would give people, especially businesspeople at home and abroad, a platform to resolving disputes.

He said that the arbitration centre would play an important role in settling disputes in a friendly manner outside the court.

'It is a timely step to settle disputes quickly. It will help to ensure a win-win situation for the parties,' he said.

The centre was set up in a high rise at Panthapath in the capital. A number of retired jurists of the Supreme Court will be appointed arbitrators.

The ICC president, Mahbubur Rahman, said, 'The Bangladesh International Arbitration Centre will offer facilities for alternative dispute resolution, particularly arbitration.… Going to court is a time-consuming and expensive way of seeking a solution.'

'We all know the problems of going moving court in dispute settlement. Time, money and the hassles of lengthy proceedings are associated with it. The business suffers a lot,' he said.

Shafique said that arbitration in the commercial sector was very important. 'Because of lengthy process of dispute resolution in court, foreign investors are not always interested in doing business here. Arbitration process should not be contradictory with the provision of law and court.'

He said, 'Arbitration sometimes becomes lengthy. There is a chance that any party aggrieved at the decision of the arbitration can again follow the road of court. This will lead to repeated appeals and it may take five to 10 years for dispute resolution. So, mediation can be more effective where both the parties will suggest the way of resolution.'

He said that in meditation process, both the parties could reach a win-win situation. 'We will amend the existing law where mediation will be made compulsory. The timeframe and the total process of dispute resolution will be clearly defined in the law so that no one can create any obstacle without any proper reason to the resolution process.'

The arbitration centre's chief executive Taufiq Ali said, 'The centre's goal is to shape a responsive and well-managed secretariat with careful oversight for performance based management.'

The prime minister's economic affairs adviser Mashiur Rahman, the DCCI president, Asif Ibrahim, MCCI vice-president Nihad Kabir and IFC representative Paramita Dasgupta also spoke.

Source: New Age

Huge backlog of CIB credit reports

Jasim Uddin Sarker

The Central Information Bureau of the Bangladesh Bank is finding it difficult to deliver reports because of manpower shortage and delay in launching the full-fledged online system, while the number of requests for reports from different banks and financial institutes is increasing.

Sources in the central bank said that at present the CIB has a backlog of over 20,000 inquiries for credit information as it could release only around 3,500 reports a month in response to requests for 5,000-6,000 reports.

As per the existing provisions, if any client of a bank or financial institute wants to take loans worth $725 or Tk 50,000 or more, that bank needs to collect the CIB's report from the central bank to check whether the client is a loan defaulter or has any outstanding loan with any other bank or financial institute, said an official.

'Manpower shortage in the CIB and the delay in launching the full-fledged online system for preparing the reports have resulted in the huge backlog,' he said.

Central bank officials said that the CIB has only 48 permanent staff so 30 interns had been appointed recently to strengthen the department. 'But 10 of the interns left their job recently.'

Although the central bank started providing CIB reports online on a test basis in the fourth quarter of 2010, the full-fledged system is yet to be started.

Under the existing service standard of the central bank, the credit reports are supposed to be supplied to the banks and financial institutions within fifteen working days after receiving the requests.

The banks and financial institutions will be able to collect the CIB reports from the central bank by just one click once the full-fledged online system is launched.

'The BB planned to launch the online system in January and March but failed. Now it is planning to launch the system this month, but it is uncertain whether it will be able to do so,' said a source.

Executive director of the Bangladesh Bank, AHM Kai Khasru, told New Age last week that they were trying to reduce the backlog of CIB reports despite the manpower shortage.

'The online credit information system will be initiated soon. The exact time of the launching cannot be ascertained at present but we are trying our best to launch the system by this month,' he said.

The CIB was set up on 18 August, 1992 by the central bank to prevent credit risk and reduce the number of defaulted loans.

Source: New Age

New stock of boro starts arriving in Bangladesh

Kazi Azizul Islam

New stock of Boro rice has started arriving in the market and farmers are reportedly getting good prices.

However, market men say that since the Boro harvest has been better than usual this year the volume of arrivals is bound to increase within the next few days and the prices that the farmers receive will begin to fall.

Several boats laden with just harvested

Boro paddy arrived at Dhaner Gola mokam (local trading station) at Ashuganj in Brahmanbaria district in the last two days, workers told New Age.

On Saturday at Dhaner Gola, kutcha or not-yet-dried paddy of the BIRI-28 variety was sold for Tk 620 to Tk 650 per maund (37.3 kilogram).

Abdul Jalil, a broker at Dhaner Gola, told New Age that prices are likely to start falling next week when the volume of arrivals increases significantly.

Ashuganj's Dhaner Gola, located on the bank of the Meghna River, gets the first lot of paddy harvested early every year. New stocks come from the low-lying haors of Brahmanbaria, Kishoreganj, Netrokona and Sunamganj districts.

Traditionally the Boro paddy is planted early in hoars as often the cross-border flash floods or heavy summer rains and the resultant inundation damage crops.

Last year Boro fields in the haors were flooded by downstream flash floods.

Thus arrivals of new stocks of paddy last year took place earlier as farmers were compelled to cut the half-ripe paddy because of the flood.

Prices of new stocks of paddy were between Tk 620 and Tk 630 per maund in this period last year.

Widespread harvesting of Boro, which accounts for nearly two-thirds of the country's rice output, starts after mid-April and continues till the end of June.

Decline in Boro production last year, because of damage to haor crops and comparatively low yields in many other major rice-producing districts, resulted in a sharp and continuous rise of rice prices after the last Boro season.

The government claimed that the production target of 1.85 crore tonnes of Boro rice was achieved in the last 2009-10 fiscal year, but agro-economists and market people said that production loss was 5 to 10 lakh tonnes. Extensive damage to crops in haors and lower yields in many areas of the country last year caused a decline in output.

The government targeted cultivation of Boro on 47.20 lakh hectares but its revised estimate shows that the planted area increased to 49 lakh hectares. Boro output is estimated at 1.86 crore tonnes for the current 2010-2011 fiscal year.

Official at the agriculture ministry said that they had received reports on the good condition of the standing Boro crop across the country, and they hope for a bumper harvest if nothing untoward takes place.

Source: New Age

Gold hits fresh record

Gold rose to a record high for a fourth straight day and silver surged on Friday, as a weaker dollar, the prospect of a US government shutdown and inflation worries lifted precious metals in a broad commodities rally.

Gold notched its biggest weekly gain in four months, drawing support from renewed euro zone sovereign debt fears amid Portugal's financial crisis and inflation jitters as crude oil and corn hit new highs this week.

Bullion broke above key resistance on technical charts and could target above $1,500 an ounce. The metal has risen more than 10 per cent since late January when political unrest began to flare in the Middle East and North Africa.

'With the expected future inflation being higher in this low interest rate environment, investors are more inclined to have some contributions to commodities as an inflation hedge,' said Hakan Kaya, commodities portfolio manager at Neuberger Berman, which manages about $190 billion client assets.

Spot gold rose as high as $1,474.60 an ounce and was later up 1 per cent at $1,471.74 an ounce by 2:53 a.m. EDT. Bullion gained 2.5 per cent this week for a fourth straight weekly gain. US gold futures for June delivery settled up 1 per cent to $1,474.10.

Gold remained far below its all-time inflation-adjusted high, estimated at almost $2,500 an ounce set in 1980, an era of Cold War tension, oil shocks and hyperinflation.

US futures activity was sharply below average for a second day, but analysts said low volume was not detrimental to the metal's bull run.

Gains in other commodities also lifted precious metals, as crude oil futures soared to their highest since 2008 and the Reuters/Jefferies CRB .CRB index rose 1.2 per cent.

Silver rose 2.4 per cent to $40.50 an ounce, just off the session high of $40.73.

The gold-to-silver ratio — the number of silver ounces needed to buy an ounce of gold — fell to a 28-year low toward 35 on Friday.

'One would expect silver to outperform in this environment because it bears a higher risk than gold on a volatility basis,' Kaya said.

Source: New Age

‘Donlim’ brand launched in Bangladesh

Abarani  International Limited, a distributor of consumer home appliances, on Saturday launched Taiwanese 'Donlim' brand in Bangladesh.

Donlim, a Taiwan-based electronics consumer home appliances producer, has chosen Abarani International Limited as its sole distributor in Bangladesh, said a news release.

At a news conference  organised by Abarani  International in a city hotel its managing director Maksudul Momin said the quality of Donlim brand would be equal to other brands existed in the market but it would be more cost effective than the others.

The products of the home appliances company will be available in the markets from today.

Abarani International chairman Nasir Uddin Ahmed and its distributing agents from different districts were present on the occasion. 

Source: New Age

US stocks regulators wrestling with private trading rules

US securities regulators are conducting a broad review of share issuance rules for private companies, including the 500-shareholder threshold meant to mark the transition to public ownership.

The Securities and Exchange Commission review could make it easier for private companies to raise capital while delaying an initial public offering and the accompanying increase in financial disclosures.

'We are approaching it with an open mind,' SEC chairman Mary Schapiro said of the policy review on Friday to a group of business journalists. 'I really can't predict what, if any, change will come out of that.'

The issue has jumped into the spotlight recently as Wall Street banks and electronic markets offer investors a chance to buy and actively trade stakes in hot Internet companies such as Facebook and Twitter before they go public.

An April 6 letter from the SEC to House Oversight chairman Darrell Issa sets out the issues involved in the review but is careful not to come to any conclusions.

The use of special purpose vehicles, or SPVs, that aggregate investors and help avoid the 500 threshold, is among the issues being examined, as is the increasingly active trading of private shares on electronic platforms.

SEC rules on what constitutes a 'general solicitation' for investors, banned for private placements, is also under scrutiny.

Goldman Sachs had planned to offer both US and foreign investors a chance to own shares in Facebook through an SPV. Later in January it opted to limit the offering to foreign investors, citing 'intense media coverage' of the deal.

The effects of any SEC rule changes could be mixed. Raising the 500 investor threshold, for example, could be offset by tighter rules on SPVs.

The rules also affect public companies that seek to 'go dark' by returning to private ownership status.

'Many of the rules we have in place governing the offering process are decades old,' Schapiro said on Friday. 'It makes sense for us ... to take a look at whether our rules have kept pace with changing market dynamics.'

Schapiro's letter to Issa showed an SEC wrestling with the needs of private companies to raise capital against the investing public's right to get the information they need to make informed decisions.

'I think all Mary Schapiro is really saying is that she wants a more realistic counting system that is less susceptible to manipulation,' said J Robert Brown, a professor at the University of Denver Sturm College of Law.

Source: New Age

European stocks rise, euro soars on Portugal bailout talks

European equities and the euro currency rose Friday, some buoyed by soaring oil prices, as gold hit new highs and EU finance chiefs agreed the need for a multi-billion euro bailout for Portugal.

London's FTSE 100 index of leading shares gained 0.81 per cent to finish at 6,055.75 points.

In Paris, the CAC 40 put on 0.83 per cent to end at 4,061.91 points, and in Frankfurt the DAX gained 0.53 per cent at 7,217.02 points.

With the dollar falling, gold's safe-haven status grew stronger and the precious metal hit a new all-time high of $1,470 an ounce, with silver following with a 31-year high.

However Michael Hewson, market analyst at CMC Markets, said share price 'gains have been tempered to some extent as the oil price continues to push ever higher and there is a concern that if it continues to go higher it could start to act as a drag on equities.'

World oil prices jumped Friday to their highest levels in more than two years as the market was driven by simmering political tensions in the Arab world and concerns over elections in Nigeria.

Brent North Sea crude for delivery in May rose as high as $125.79 a barrel in London trading, up $2.66 from Thursday's close, before falling back slightly.

'Investors remain unconcerned with what is going on in the periphery of the eurozone — and the fact that the (European Central Bank) has taken the exceptionally bold move of raising rates at a time of crisis shows that even central bankers do not seem too worried about the knock-on effect of such a move,' said Simon Denham, head of financial spread-betting firm Capital Spreads.

Source: New Age

EU offers Portugal $115b bailout

Europe offered Portugal Friday an 80-billion-euro ($115 billion) bailout, but set tough conditions as it bids to draw a line under a destabilising debt crisis.

The joint EU-IMF loans, following bailout rescues of Greece and Ireland last year, will be conditional on more public spending cuts, tax rises and far-reaching privatisations — negotiated with Portuguese politicians facing an angry, fearful electorate around June 5 polls.

This third bailout of a eurozone nation within a year will 'likely' amount to 80 billion euros ($115 billion), EU finance commissioner Olli Rehn said, although the Portuguese finance minister stressed that his government could not be expected to sell it to its electorate.

The decision to act was taken after outgoing Portuguese premier Jose Socrates threw in the towel on the eve of scheduled talks at a Hungarian castle and formally requested financial aid.

Like Dublin and Athens beforehand the bailout was brought on by skyrocketing borrowing costs, with the Lisbon government collapsing last month after parliament rejected its attempts to impose stringent austerity measures to rein in its public deficit.

The decision on Portugal also comes as the EU is locked in controversial negotiations over a permanent rescue mechanism for wayward eurozone states.

The aim is to set down binding rules once and for all, and contain debt contagion that some believe now threatens Spain.

One-third funded by the International Monetary Fund, pending confirmation from Washington, the deal with Lisbon should be conditional on 'an ambitious privatisation programme,' as well as labour market reform and 'measures to maintain the liquidity and solvency of the financial sector,' Rehn said.

It will require 'strict conditionality negotiated with the Portuguese authorities, duly involving the main political parties,' added eurozone father figure and Luxembourg prime minister Jean-Claude Juncker.

A 'cross-party agreement' is to be 'adopted by mid-May and implemented swiftly after the formation of a new government' in June.

European Central Bank head Jean-Claude Trichet said it was 'essential' that structural budgetary adjustment lay at the heart of the plan, and that the 'hard work' should 'begin immediately.'

Rehn later told Portugal's squabbling politicians to show 'responsibility' and agree economic reforms, after Portugal's Fernando Teixeira dos Santos said it was not his outgoing government's job to sell the deal to voters.

'It's not for the government to negotiate with the opposition,' dos Santos said.

'It's not the government's job to promote this negotiation' to the Portuguese people.

Eurosceoptic English MEP Nigel Farage said Brussels had 'made it plain as a pikestaff what they expect from the Portuguese people.'

'You can vote for any political party you like — as long as it does what it is told,' he claimed.

Belgium's Reynders said the politics of the bailout 'complicates things because we are no longer negotiating with a government, but one going into elections.'

Swedish finance minister Anders Borg said the new bailout was not yet a foregone conclusion.

However, the EU has money in a fund raised on the back of national contributions to the bloc's annual budget that was used for Ireland and is again, according to Rehn, first in line to be dipped into here.

Friday's decision came after Spain was again forced to insist it could ride out its own debt problems, despite stubborn high unemployment and a stagnant economy struggling to climb out from under a property market crash.

Its finance minister Elena Salgado said it was 'completely out of the question' that Madrid should follow suit.

Despite successive credit-rating downgrades pushing Portugal into a replay of the Greek and Irish crises, the EU also sees the three bailouts as a freak constellation of circumstances: dodgy data in Greece, unregulated banks too big for Ireland and out-of-date economic modelling in Portugal.

Lisbon must repay some 4.2 billion euros of debt by April 15 and another 4.9 billion euros by June 15.

Source: New Age

Late budget deal avoids costly shutdown in US

President Barack Obama and congressional leaders struck a last-minute budget deal on Friday to narrowly avert a government shutdown that would have hit the economy and idled hundreds of thousands of workers.

With a little over an hour to spare before a midnight deadline, Obama's Democrats and opposition Republicans agreed to a bitterly fought compromise plan that will cut about $38 billion in spending for the rest of the fiscal year.

Congress then quickly approved a stopgap funding measure to keep the federal government running into next week until the budget agreement can be formally approved.

A shutdown — the first in more than 15 years — would have weakened the US economic recovery, forced furloughs for some 8,00,000 federal employees, closed national parks and monuments and even delayed paychecks for troops in Afghanistan and Iraq.

But the biggest incentive for a deal may have been the risks that failure would have posed for Obama, his Democrats and the Republicans just as the 2012 presidential election campaign gathers steam.

Public frustration over the budget fight had surged as Democrats and Republicans traded blame and a shutdown loomed.

'Tomorrow, I'm pleased to announce that the Washington Monument as well as the entire federal government will be open for business,' Obama said in a late-night appearance at the White House shortly after the agreement was reached.

It provides the largest spending cuts in US history, a victory for Republicans who won control of the House of Representatives in November on promises to scale back government.

House of Representatives Speaker John Boehner, who came under intense pressure from Tea Party conservatives inside his own Republican Party to take an even tougher stance, said the deal clears the way for bigger spending cuts in coming years.

But Obama and the Democrats were able to beat back a Republican effort to block birth control funding to the Planned Parenthood family planning organization, because it also provides abortions — though not with public money.

'Both sides had to make tough decisions and give ground on issues that were important to them,' Obama said. 'Some of the cuts we agreed to will be painful.'

Still, the fight did little to improve the view Americans have of their political leaders, and raised concerns about the ability of Obama and a divided Congress to deal with bigger issues, from raising the federal debt ceiling to reining in budget deficits.

Even some lawmakers said the bitter feuding had sent a bad message to the rest of the world.

'They've got to be laughing at us right now' in China, said Senate Foreign Relations Committee Chairman John Kerry.

Fears that a government shutdown would hurt economic growth had pressured the dollar and US Treasury prices on Friday.

All sides agreed the debate had been long and painful.

'It has been a gruelling process. We didn't do it at this late hour for drama. We did it because it has been very hard to arrive at this point,' said Senate Majority Leader Harry Reid, a Democrat.

After the deal was finally reached, White House budget director Jack Lew told federal agencies to continue their normal operations.

But there will almost certainly be a much bigger showdown over the budget for the next fiscal year, which begins on October 1.

Republicans are already pledging to slash taxes and overhaul Medicaid and Medicare, government-run health programs for the poor and elderly. The Democratic-controlled Senate is likely to flatly reject those plans.

A government shutdown could have been a negative for Obama as he seeks re-election. But there were significant risks for Republican leaders, too, especially if they were seen as being under the thumb of Tea Party radicals.

The budget battle has dominated Obama's agenda even as he struggles to balance Americans' chief concerns — jobs and the economy — with foreign policy challenges topped by Middle East turmoil and US military involvement in the Libyan conflict.

Source: New Age

Spain PM heads to Asia in search of investment

Spain's prime minister Jose Luis Rodriguez Zapatero will visit China and Singapore next week in search of new investments to shore up his country's embattled economy, government sources said Friday.

Zapatero arrives in Beijing on Tuesday where he will meet premier Wen Jiabao, vice-premier Li Keqiang, Chinese financial authorities, bankers and investors.

He moves on to Singapore on Wednesday for talks with Prime Minister Lee Hsein Loong and investors before returning to China to attend the Boao Forum for Asia, an annual conference of government and business leaders and academia.

He returns to Spain on April 15.

The prime minister decided to make the trip 'taking into account China's weight as an emerging economy, Singapore's as a major financial centre and the Boao Forum's growing importance as a platform for Asian players,' one government source said.

'Several important economic agreements' will be signed in Beijing during that visit, he said.

'Strengthening our bilateral relations with China is crucial,' he said.

'China's investment in Spain is low for its size. As a holder of debt its position has been increasing, reflecting the confidence and interest in the Spanish economy.'

Zaparero's Socialist government has slashed spending and raised taxes to rein in a ballooning public deficit and ease market fears that Spain will need an EU bailout like the ones granted Ireland and Greece last year and that envisaged by Portugal.

And China's help could be important.

Li Keqiang offered to buy about 6.0 billion euros worth of Spanish public debt during a visit to Spain in January.

Concerns that eurozone debt troubles could spread to Spain pushed bond rates sharply higher last year, adding to the costs of servicing the country's sovereign debt.

Source: New Age

Japan’s stalled chip sector ‘to cost $470b’

The cost to the global economy of Japan's stalled computer chip industry remaining shuttered into May could be almost half a trillion dollars, a report said Saturday.

Manufacturers across Japan have closed down production lines or cut back their output because of direct damage or supply chain problems caused by the earthquake and tsunami that struck the northeast on March 11.

The Nikkei newspaper, citing a government estimate, said the knock-on impact on the global economy — caused by stalled production in companies that use Japanese-made parts as well as in related industries — could be 40 trillion yen ($470 billion).

Renesas Electronics Corp, the largest maker of microcontrollers, sustained damage to its plant in Ibaraki prefecture in the 9.0 magnitude quake.

Car manufacturers worldwide could take a 6.5 trillion yen hit if production of the key auto part does not resume until the end of April, the paper said.

One of the world's leading silicon wafer producers, Shin-Etsu Chemical Co, has a subsidiary factory in Fukushima prefecture, which was damaged by the disaster.

If that factory stays closed for six weeks, the damage to semiconductor production worldwide could reach roughly 1.5 trillion yen, the Nikkei said.

The hit to flat-panel television production is estimated at about 400 billion yen.

The impact on related industries, including the electronic machinery, telecommunications, Internet and broadcasting sectors, could reach about 32 trillion yen, it said.

Source: New Age

Sanofi-Aventis completes Genzyme takeover

Sanofi-Aventis said it has completed its takeover of US biotechnology company Genzyme Corp, whose shares will cease trading on the Nasdaq as of the market close on Friday.

The companies agreed in February on a deal worth about $20.1 billion. The acquisition gives Sanofi access to Genzyme's business in treating rare diseases and is expected to help the company combat sales erosion from drugs facing cheap generic competition.

Sanofi said more than 237 million Genzyme shares were tendered in the transaction, representing 89.4 per cent of outstanding shares. Sanofi then exercised a top-up option, resulting in ownership of more than 90 per cent of Genzyme's shares.

Sanofi is funding the deal with the proceeds of its $7 billion notes offering, about $7 billion raised through its US commercial paper program, a drawing of $4 billion on a bridge facility and available cash.

Sanofi shares closed up 0.57 per cent at 50.74 euros on Friday. Genzyme shares closed down 0.1 per cent at $76.25 on Nasdaq.

Source: New Age