Dhaka Stock Exchange urged the government to allow unquestioned investment of undisclosed money in the capital market for the sake of a vibrant market in the country, as bourses usually go bearish.DSE officials made the plea at a pre-budget meeting with the National Board of Revenue (NBR) on Wednesday morning.
A press briefing at his office after the meeting, DSE president Md Rakibur Rahman said that if the government allowed question-free investment in the pre-IPO and placement or secondary market, then it would help develop the capital market and additional employment would be created through this measure.
The huge amounts of undisclosed money, stuck-up in private coffers, have to be brought in the mainstream economy of the country, and through this the liquidity crisis of the capital market would be solved, he suggested.
The chief of the premier bourse also said that big companies would get capital from the share market and invest for industrialization, which will create employment.
"There is no alternative other than capital market for industrialization and employment generation through utilizing undisclosed money to bring it in the mainstream economy," he said.
Wednesday, April 29, 2009
DSE asks govt to allow investment of undisclosed money in capital market
Global crisis has exposed flaws in int’l economic system: Ban
UN chief Ban Ki-moon yesterday said the current economic crisis has clearly exposed the flaws in the existing international economic system and asked institutions to become more "representative, credible, accountable and effective."
"The current global economic and financial crisis is exposing dangerous weaknesses and flaws in international economic system," Ban said in his address to a high-level meeting of the Economic and Social Council (ECOSOC), at the UN headquarters in New York.
"Recent events have proven that the current system of global economic governance is not adequate to today's challenges. Our institutions and governance structures must become more representative, credible, accountable and effective," he said.
Observing that faith in financial deregulation and market self-regulation has been diminished, to say the least, Ban said: "In its place, we are seeing a new commitment to effective regulation and supervision - not just nationally, but also internationally."
What began with financial turmoil in the third quarter of 2007 has escalated into a full-blown, global recession. The UN system, including the Bretton Woods institutions, foresees a shrinking global economy in 2009, he said.
All this, Ban said, will bring down people's average incomes in much of the world. "Global trade is collapsing. Hundreds of millions of people are losing their jobs, their income and their ability to survive. In too many parts of the world, frustration has erupted into violent protests, threatening stability and peace," he said.
The UN chief said development efforts are sagging under the weight of the crisis. "We expect negative effects in nearly every area covered by the Monterrey Consensus and the Doha Declaration on Financing for Development," Ban said.
The Secretary General argued the current system emerged through the 1944 UN Conference at Bretton Woods, and the world body, with its universal membership, must be fully involved in the reform process.
"We need to ensure that a large enough share of the additional resources will flow to developing countries, to help them cope with the crisis and preserve hard-won gains towards the Millennium Development Goals.At the very least, existing commitments to increase aid for the poorest countries must be fully met," Ban said, welcoming the decision of the latest G20 summit in London to allocate more resources to developing countries.
The London Summit was an important beginning. "But we must act urgently to keep the financial crisis and economic recession from evolving into a major humanitarian crisis and a breakdown in peace and security," Ban said.
Sunday, April 26, 2009
Global stock market movements
What is a global recession?
Many individual countries are now in recession, and the world economy is flagging badly. Leading economic organisations and business leaders are talking about "a global recession".
But it is not easy to define. BBC World Service economics correspondent Andrew Walker looks at the tricky business of working out whether we are in "a global recession".
It really depends what you mean.
Even for national economies the word "recession" has more than one meaning.
It can apply to two consecutive quarters of declining output (GDP), a decline in annual GDP, or in the case of the US, it is the judgement of a committee of economists at the National Bureau of Economic Research.
But although there is more than one, these definitions are are widely used and understood.
That is less true of global recessions.
Some people are talking about one now, and for what it's worth, I have little doubt that by the end of this episode most people will agree that we have been through one. But what is it?
Different thresholds
Quarterly data are a problem at the global level. The International Monetary Fund (IMF) has concerns about the consistency across countries so it doesn't publish any quarterly global aggregates.
So that brings us to annual figures and I have heard several different thresholds from IMF chief economists for judging whether a year counts as a recession.
Global output growth below 3%, 2.5%, and 2% have all been suggested.
Another idea is growth per capita of below zero. Global population grew at about 1.2% last year, which gives another, lower threshold.
Or some people just take recession to mean a very sharp slowdown in global growth.
There is also a wrinkle when it comes is adding up national output figures, in different national currencies.
The obvious thing to do is to use actual exchange rates, but that tends to make items produced in a developing country count for less than a similar item made in a developed one.
You can adjust for that by using made-up conversion rates known as Purchasing Power Parities, or PPPs.
If there is a global recession, it will be this year - let's hope no more than that.
So there are no real data. All we have to go on is forecasts.
The most recent one from the IMF is growth of 0.5% using PPPs, and minus 0.6% using market exchange rates.
If the forecast is right it's a recession by all those measures.
Political banana skin
But does it matter? For a journalist, it is more convenient to know for sure one way or the other.
Many people called 2001 a global recession, but the IMF decided it was a near miss. For the sake of balance I felt obliged to take account of that in how I wrote.
Whatever label we choose though, the underlying reality matters a great deal to people who lose their jobs, have their incomes cut or whose business fails.
It is also worth asking whether the word itself makes things worse, by depressing confidence.
It is arguable that when the National Bureau announced the current US recession, it added to the gloom on Wall Street - though it was a bad day for investors anyway.
There certainly is a history of wariness about using the R-word.
Last year the US Treasury Secretary Henry Paulson invented a new term - "down-climb".
It was such an odd choice that it really only succeeded in showing he was trying to avoid a nastier one.
In the more distant past, there's a story about a senior official in Jimmy Carter's US administration, an economist by the name of Alfred Kahn.
He was told off for frightening people by talking of recession and even depression.
So what did he do? Was he chastened?
No. He was witheringly sarcastic. He decided, the story goes, to substitute another word - banana.
The US was in danger of experiencing the worst banana in 45 years.
In a way it was a case of turning on its head a famous line from Shakespeare's Romeo and Juliet: "That which we call a rose by any other name would smell as sweet".
But this time it's not a rose that we can smell. It's an increasingly rotten banana.
Facebook users say yes to changes
Facebook members were invited to vote on the changes
Facebook users have voted to back changes which give them control over data and content they post on the site.
Early results suggest 75% of those who voted support the proposals.
The vote was triggered by changes Facebook made to its terms and conditions in February.
The move drew fire because it appeared to hand the social network site ownership of images, videos and data that users posted on profile pages.
Low turnout
In response to the criticism, Facebook withdrew the changed terms, wrote a new set and invited its 200 million members to make their views known.
The new terms return control of what is done with data put on the site to users and give them the right to ask for it to be deleted if they stop using Facebook.
In total about 600,000 people took part in the week-long vote. Initially, Facebook said it would only adopt those new terms if 30% of its members voted in support of them.
However, writing in a blog posting on Facebook announcing the early results, Ted Ullyot, Facebook's legal chief, said it would adopt them anyway.
"You can expect to see the new documents on the site in the coming weeks," wrote Mr Ullyot.
He said a preliminary count suggested 74.4% backed the new Facebook Principles and Statement of Rights and Responsibilities.
The results are now being assessed by an external auditor to produce a final count.
Mr Ullyot expressed disappointment that there was not a bigger turnout but acknowledged that the exercise was a first for both Facebook and its members.
Future votes on changes to how the site operates, which are enshrined in the new terms, will have a threshold of less than 30% for any alterations to be made binding.
"We are hopeful that there will be greater participation in future votes," he wrote.
FBCCI redesigns stimulus demand
Annisul Huq, president of the apex trade body, also urged the government to arrange funds in a 'block allocation' from its internal resources.
The FBCCI will submit a proposal revised with new demands to Finance Minister AMA Muhith today.
Huq spoke to reporters yesterday to reveal the new proposal after a meeting with businessmen, trade body leaders, chamber leaders, exporters and importers at the Federation Building.
The proposal says Bangladesh Bank will roll out loans from the block allocation to the entrepreneurs of the affected sectors at a 6 percent bank interest rate in line with the central bank's guideline.
The borrowers will repay the loans within five years from 2011, according to the proposal. "Giving stimulus packages to the affected sectors in this system will be more effective," Huq said.
The FBCCI also suggested the issuance of power fund bonds with a seven-year term and 7 percent interest rate.
Huq also suggested the government purchase power from captive power plants, as many businessmen are ready to sell electricity to the government from their plants.
Huq did not mention the amount of the revised stimulus package and the allocation for "Bangladesh Power Fund".
But he said: "The size of both funds will be as big as possible as all the affected sectors have been included in the proposed package."
Earlier, in a meeting with Prime Minister Sheikh Hasina, the FBCCI president proposed Tk 6,000 crore in a stimulus package for the affected sectors, but it was critised by different quarters.
Huq yesterday called for initiatives to get funds from the International Monetary Fund, the World Bank and Asian Development Bank as those organisations have recently launched a bailout package of $850 billion.
"Bangladesh as an LDC should be able to receive an allocation from this fund," he said.
Huq urged the government to keep the interest rate spread between the cost of fund and the interest on deposits at 2.5 percent.
The FBCCI boss urged the government to keep the revenue collection target at Tk 55,000 crore in the budget for fiscal 2009-10 with an estimated growth rate at 6 percent.
The apex trade body also called upon the government to bring down the import duty to 1-2 percent by 2016 to speed up rapid industrialisation.
Crisis traps more in poverty, hunger
The global economic crisis means up to 90 million more people will remain trapped in extreme poverty this year while the chronically hungry could top one billion, a World Bank/IMF report said Friday.
The report, entitled "A Development Emergency," says the crisis was putting in danger attaining the United Nations' 2015 Millennium Development Goals which focus on poverty reduction, especially in Africa.
Most of the eight goals -- which also include reducing child and maternal mortality, improving education and fighting malaria and HIV/AIDS -- "are unlikely to be met,' it said. "It is estimated that an additional 55 to 90 million people will be trapped in extreme poverty in 2009 due to the worldwide recession. "The number of chronically hungry people is expected to climb to over one billion, reversing gains in fighting malnutrition," a statement on the report said.
The report said efforts to cut poverty and hunger levels by half between 1990 and 2015 had gotten off to a good start but were now at risk as overseas markets dry up, and foreign investment and aid flows come under pressure. Before the sharp rise in food prices starting from 2007, some 850 million people suffered from chronic hunger but this had risen to 960 million in 2008 and would be above one billion this year, it said.
"The situation is extremely serious," said John Lipsky, first deputy managing director at the International Monetary Fund, describing the problems facing the poor as the "third wave" of a global crisis unprecedented since the 1930s Great Depression.
"With simultaneous recessions striking all major regions, the likelihood of painfully slow recoveries in many countries is very real, making the fight against poverty more challenging and more urgent," Lipsky said.
World Bank officials also warned that the situation in Eastern Europe and Central Asia was very serious, with recent development gains that had taken 90 million people out of poverty in the region put at risk by the crisis.nShigeo Katsu, the World Bank's vice president for Europe and Central Asia, stressed the human dimension, urging authorities to bear in mind the need for a social welfare net besides measures to help banks and companies.
Meanwhile Antoinette Sayeh, the IMF director for Sub-Saharan Africa, one of the world's most vulnerable regions, said countries there need more direct aid to get through the crisis. "Africa will need more international support," Sayeh told a news briefing, calling on developed countries to live up to their 2005 commitment to double aid by 2010.
Sub-Saharan Africa will grow just 1.5 percent this year, down from 5.5. percent in 2008, but recover to 4.0 percent in 2010, according to the IMF. "Risks are mostly on the downside," Sayeh said, adding that the "the crisis is now in full force in Africa." She stressed that more aid should be given outright as grants so as to avoid these poorest countries from being saddled with fresh debt.
Gem producer Botswana cuts output
Debswana produces close to quarter of the world's diamond outputDebswana, jointly owned by the Botswana government and De Beers, said it would produce 15 million carats of diamonds, against 33.6 million carats last year.
It came after state diamond trading firm DTCB said it could only sell between 18 and 20 million carats.
In February, Debswana had said it would close two mines for the rest of 2009.
"If there are indications that demand will improve quickly, then we will increase production," said DTCB corporate affairs manager Esther Kanaimba.
She said there was some inventory left from poor sales in November and December last year.
DTCB was set up in 2008 by Botswana's former president, Festus Mogae, in a move designed to boost local business and create jobs.
The mining industry in Botswana has cut 4,500 jobs as global demand for diamonds has fallen. Debswana produces close to a quarter of the world's output.