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Growing investors’ confidence pushed up stock prices and average turnover significantly on the Dhaka Stock Exchange in the last week.
   Amid a rally, market capitalisation on the prime bourse on Thursday crossed Tk 40,000 crore mark, the highest ever at the country’s stock market.
   ‘Investors made huge demand for shares in the last week as their confidence level increased recently,’ said Abu Ahmed, professor of economics of Dhaka University and a stock market expert.
   Ahmed, also former chairman of state-owned Bangladesh Shilpa Bank, said, ‘A number of factors including the announcement of good corporate results and perceived ease down of political tension have brought the investors back to the trading floor in larger number.’
   The market expert said investors’ move helped the market to come out from downtrend for months adding ‘more good quality government or private companies’ shares should be offloaded and floated soon to sustain the uptrend.’
   The daily average turnover on the DSE increased by 66.67 per cent to Tk 72.74 crore in the last week from the previous week’s Tk 43.64 crore.
   The three-day last week saw trading of Tk 218.22 crore while it was also Tk 218.22 crore for the previous week which had five trading days.
   The DSE general index gained 44.76 points or 2.61 per cent in the last week to close at 1762.36 on Thursday, while the blue chips index, DSE20, advanced by 54.38 points or 3.98 per cent to close at 1419.66.
   Total market capitalisation stood at Tk 40,452 crore on Thursday, while the figure was Tk 39,113 crore on the closing day of the previous week.
   DSE vice-president Sharif Ataur Rahman said the market went up amid increased participation of the investors.
   Sharif, also the managing director of SAR Securities – a brokerage house, said, ‘Investors made increased demand for the shares of companies with good fundamentals to avail lower prices of the stocks after the months of downtrend.’
   A total of 14 companies declared dividends during the last week, DSE statistics shows.
   The Power Grid Company Bangladesh topped the turnover leaders with total sales of Tk 24.91 crore which was 11.41 per cent of the total turnover of the bourse last week.
   Other turnover leaders were BRAC Bank, Summit Power, Prime Bank, Southeast Bank, Dhaka Electric Supply Company, Shahjalal Islami Bank, Exim Bank, UCBL and Agni Systems.
   The top ten leaders accounted for 53.39 per cent of total turnover of the bourse last week.
   Information Services Network topped the gainers of the week with 25.15 per cent rise in its share prices while Beach Hatchery was the worst loser witnessing 14.29 per cent fall.

The heat wave and power supply disruption have boosted sales of cooling and luminous electronic equipment including air conditioner and instant power supply devices in the market.
   High income group along with middle class are the main buyers of air-conditioning appliances, said sellers of the products. Sales of alternative power supply equipment such as instant power supply and charger lights have increased significantly because of acute crisis of power supply, the sellers said.
   Nazrul Islam, a private company service holder, said he bought an air conditioner to get relief from unbearable heat at the top floor of his rented apartment in Dhanmondi.
   He said, ‘This is an extra cost for me but I have to buy it as I stay at my office in the air-conditioned room and at night it becomes unbearable for me at home without air conditioner.’
   Dealers and electrics company market researchers said only five years back, air conditioner was a luxury equipment and the buyers were high income group people. But buying capacity of the people has gone up and now even middle class can afford air conditioners, they said.
   Wahidul Huq, an importer and wholesaler of air conditioner of different brands at Elephant Road said demand for room air conditioner increased and the middle income group is the main buyers.
   ‘We mainly import brand air conditioners like General, Career and Hitachi and sells to retail market across the country,’ he said.
   Anwar Hossain, owner of an electronic goods shop at the Stadium Market, said on an average 12 air conditioners of different brands were sold at his showroom in the last week.
   Air conditioners of different sizes, designs and brands are selling between Tk 24,990 and Tk 70,000 and electric fans between Tk 600 and 12,000.
   Singer sales manager at Karwan Bazar showroom said they have two kinds of air conditioners. Of them, 1.5-tonne window-style air conditioner is selling at Tk 33,500 and 1.5-tonne split air conditioner at Tk 45,000. Singer has also different sizes of table and ceiling fans selling between Tk 1,700 and Tk 4,000, he added.
   Butterfly Marketing Limited is offering different kinds of LG air conditioners with special discount in case of cash purchase, and free installation system for the customers.
   Sources at RahimAfrooz said that demand for economy ranges of IPS of the company has increased significantly. This IPS is used for household purposes.

Sri Lankan children are being encouraged to raid their piggy banks in a bid to end a serious shortage of loose change in a country where inflation is making coins worth more than their face value.
   State-owned banks are offering colour pencils, felt pens, drawing paper and books to children who part with their savings in exchange for bank notes, promising the gifts will be worth 20 per cent more than the coins handed in.
   ‘If children break their piggy banks and bring the coins back to circulation we will give exercise books and pens in addition to returning the money in bank bills,’ said deputy finance minister Ranjith Siymbalapitiya.
   The offer of an extra 20 per cent in the form of gift coupons coincided with the traditional new year last month and followed a major shortage of coins essential for the cash-reliant transport and retail sectors.
   Minting cheaper steel coins plated with copper and nickel has not helped, according to the Central Bank of Sri Lanka.
   The central bank tried in 2001 to coax people to put unused coins back into circulation by urging students to break into their piggy banks, but the scheme flopped.
   The finance ministry expects the added incentive this time round will pay off.
   The 20 per cent premium has a resonance as prices have surged by that amount in the past year and the island nation which imports many consumer goods as well as commodities has seen older coins made with copper and nickel snapped up for the metal.
   The economy has also been hit by decades of ethnic war that has claimed more than 60,000 lives in the past 35 years including an upsurge in fighting between Tamil rebels and government troops in the past year that has hit tourism, a mainstay of the economy.
   Even commemorative gold and silver coins had been snapped up by foundries to melt and make jewellery as the precious metals in the coins was worth more than the face value of the coins themselves.
   The Central Bank got wiser in July 2004 and briefly withdrew the coins from sale before repricing them at the market value of the precious metals. Yet, the 5,000 gold coins and 25,000 silver tokens had been a sell out.

The Asian Development Bank, under pressure to overhaul its operations, opened its annual meeting Friday to warnings of growing wealth inequalities, economic imbalances and pollution in the region.
   Development experts gathered for a four-day meeting to try to tackle a growing rich-poor gap and alleviate chronic pollution in much of developing Asia, which is enjoying rapid but increasingly uneven economic growth.
   ‘Despite much progress, the gap between the rich and the poor is widening with hundreds of millions still living in poverty,’ ADB president Haruhiko Kuroda told reporters at a conference centre in a leafy Kyoto suburb where a handful of protestors gathered outside waving placards saying, ‘ADB Go Home.’
   The ADB also came under attack from non-governmental campaigns led by Greenpeace which slammed the development bank’s financing of coal-fired power projects in Asia that it said was contributing to global climate change. The ADB said it would invest 900 million dollars in clean energy projects in 2007 and slightly more in the following two years, with the priority on China, India, Indonesia, Pakistan, the Philippines and Vietnam.

Malaysians have been urged not to panic over a shortage of cooking oil caused by soaring crude palm oil prices, reports said Friday.
   Crude palm oil has risen some 50 per cent since October last year to 2,200 ringgit (643 dollars) per tonne and reports said cooking oil manufacturers were suffering losses because of government-imposed ceiling prices.
   Domestic Trade and Consumer Affairs Ministry deputy secretary-general Mohamedsha Mislam said panic buying could aggravate the situation, much like a sugar shortage seen in Malaysia last year. ‘Don’t resort to panic buying or hoarding the commodity. We don’t want a repeat of the sugar shortage,’ Mohamedsha was quoted as saying by the state news agency Bernama.
   Officials from the ministry could not be immediately reached for further comment.
   Cooking oil based on palm oil is a price-controlled item in Malaysia, selling at 2.50 ringgit per kilogramme (2.2 pounds).
   States are facing shortages because manufacturers will not produce small one kilogramme packets of oil used by households, claiming there is little profit to be made due to higher palm oil and transportation costs, Bernama said.
   ‘Whatever their excuses are, I hope these packaging companies will not victimise consumers,’ Lau Chiek Tuan, an official with northern Penang state’s domestic trade and consumer affairs committee, told Bernama.
   The New Straits Times reported Friday that Plantation Industries and Commodities Minister Peter Chin Fah Kui had proposed government subsidies for cooking oil manufacturers to ease their burden.

The nation’s unemployment rate edged up to 4.5 per cent in April as cautious employers added the fewest new jobs in more than two years, signaling that the labor market is starting to feel some of the strain of the sluggish economy.
   The fresh employment picture provided by the Labor Department on Friday showed that payrolls grew by just 88,000 last month as job losses spread beyond manufacturing and construction and into retailing and financial services. Workers’ paycheck also grew more slowly.
   The new tally of jobs added to the economy was the fewest since 65,000 jobs were added in November 2004. The rise in the unemployment rate, however, was slight compared with March’s 4.4 per cent rate — which had matched a five-year low. Taken together the figures suggest the labor market may be cooling a bit — but not collapsing — as the national economy makes its way through a soft patch.
   Given the housing slump, rising energy prices and slowing overall economic activity, ‘companies are being conservative when it comes to their new hiring,’ said Lynn Reaser, chief economist at Bank of America’s Investment Strategies Group. ‘Job seekers will need to have good resumes,’ she added.

GSP Finance Company (Bangladesh) Ltd, a joint venture of Hong Kong, Thailand, Republic of Vanuatu and Bangladesh, has applied to the Securities and Exchange Commission to float initial public offerings, said a release.
   The Bangladesh Bank has already given permission to the financial institution to float IPOs of Tk 5 crore.
   GSPB has appointed AAA Consultants and Financial Advisers as manager to the issue and the company has been awarded credit rating of ‘A2’ by the Credit Rating Agency of Bangladesh Ltd.
   Incorporated on October 29, 1995 as a public limited company, GSP Finance Company Bangladesh’s foreign and local shareholding stood at 61.78 per cent and 38.22 per cent respectively as on December 31, 2006.
   Although the company has attained the required share and equity capital of Tk 25 crore in December 2003 (the amount stands at Tk 35.63 crore as of December 31, 2006), IPO will be floated to strengthen capital market in line with the policy pursued by Bangladesh Bank and SEC.
   The company will issue IPO shares on receipt of permission from SEC in the first half of the year 2007. Prospectus will be published within the time frame portraying the company’s financial strength.
   GSPB is presently dealing in loan/lease financing for capital machinery, medical equipment, construction equipment, office equipment, marine and road transport, electrical equipment, loan to property developers, construction of roads, bridges, highways, SME’s and factoring.

The total revenue of mobile phone operator Grameenphone slowed down to 33 per cent to Tk 1,283 crore or NOK 1,152 million (Tk 1 = 0.0898 krone) in January-March period of 2007, the company said Friday.
   Grameenphone recorded 69 per cent revenue growth to Tk 1,063 crore or NOK 955 million in the first quarter of 2006, said the first quarter report of the Telenor ASA, a Norwegian telecommunications service provider which owns 62 per cent of the Grameenphone, the largest mobile operator in Bangladesh.
   The Q1 report released Friday attributed increased competition and reduction in prices of tariff and connection as the major reasons for the fall of revenue growth.
   ‘In Bangladesh, increased competition and price reductions have led to lower growth,’ said Jon Fredrik Baksaas, chief executive officer of Telenor.
   During the period, number of subscriptions increased by about 1.4 million.
   However, despite the steady increase of subscriber base, Grameenphone’s estimated market share declined by 2 percentage points to 61 per cent from the previous quarter.
   The report also said the Grameenphone was currently working on launching initial public offering in capital market.
    ‘Grameenphone is currently investigating opportunities for an initial public offering in Dhaka,’ said Baksaas.

Microsoft Corp has intensified its pursuit of a deal to take over Yahoo Inc, asking the company to re-enter formal talks, the New York Post reported on its Web site on Friday.
   While the two companies have held informal deal talks over the years, the latest approach signals a new urgency on Microsoft’s part, the paper said, citing unnamed sources.
   The approach follows an offer Microsoft made to buy Yahoo a few months ago, the Post reported, but Yahoo spurned the advances.
   The Post said Wall Street sources put a roughly $50 billion price tag on Yahoo.
   Microsoft and Yahoo could not immediately be reached for comment.

Australia’s central bank cut its inflation forecast for the year on Friday, easing fears of interest rate increases in the immediate future.
   But the Reserve Bank of Australia’s stance on monetary policy remained unchanged with a tightening bias evident in its policy statement, economists said.
   They said the RBA remains concerned that the Australian economy, now in its 16th consecutive year of expansion, is operating at close to full capacity, which could lead to higher inflation.
   Interest rates were likely to remain on hold for the rest of 2007 because of the bank’s lower inflationary forecast for the next few quarters but hikes remain on the agenda for early next year, the economists said.
   The bank said in its quarterly statement on monetary policy that it expected underlying inflation to fall back to about 2.5 per cent within the year, down from 2.75 per cent over the year to March 2007.
   The central bank had previously forecast inflation to be at about 2.75 per cent by the end of 2007. It has an overall inflation target of 2.0-3.0 per cent.
   ‘Since late last year, the bank’s assessment has been that inflation in underlying terms would decline gradually from the peak of around 3.00 per cent reached in the September quarter 2006,’ it said.
   ‘In recent months, the decline appears to have been a little faster than originally expected and it now seems likely that underlying inflation will be about 2.5 per cent, or possibly a little lower, during 2007.’
   The bank said headline Consumer Price Index inflation will fall below 2.00 per cent over the next couple of quarters.
   In the longer term, however, the bank said it was unlikely that inflation would continue to decline.
   ‘All available data suggest high capacity utilization, a tight labour market and strong demand growth. Based on these trends, inflation is forecast to return to the top half of the target during 2008,’ it said.
   Underlying inflation was expected to rise to about 2.75 per cent in 2008 and 2009, with headline CPI inflation following a similar path.
   The RBA hiked rates by 25 basis points three times in 2006, with the last increase in November taking the official cash rate to 6.25 per cent.
   HSBC Australia chief economist John Edwards said the central bank had plainly signalled its readiness to hike interest rates if necessary, but his firm remained of the view that no increase is likely this year.
   Westpac Banking Corp chief economist Bill Evans said the RBA’s forecast of higher inflation in 2008 was a clear signal that it has not relaxed its tightening bias.
   He said the recent lull in inflation pressures would prove temporary as stable monetary policy and a substantial fiscal stimulus expected in next Tuesday’s federal budget would only accelerate economic momentum.
   ‘Eventually the stresses on limited capacity will signal that higher rates are required,’ Evans said.
   He said Westpac’s forecast is for two 25 basis points rate hikes in February and May 2008 to extend the current tightening cycle to six years and 250 basis points.

Rupert Murdoch would take steps to maintain the Wall Street Journal’s editorial independence and invest in journalism if Dow Jones & Co approves News Corp’s $5 billion bid to buy the company, according reports of his plans published on Thursday.
   In an interview published in the New York Times, Murdoch suggested his reputation as an interloper owner was overstated, and said he would propose the Bancrofts—Dow Jones’ controlling shareholders—set up a separate board for the Wall Street Journal to ensure its editorial independence.
   In a separate report, the Wall Street Journal said News Corp. was planning to take its case for buying Dow Jones to the Bancrofts and the newsroom of the flagship newspaper.
   Murdoch is considering making its case to Wall Street Journal’s journalists detailing the company’s plans for capital investment, the paper reported, citing unidentified sources.
   News Corp. would address several issues such as increasing staffing in international bureaus and putting more capital behind the company’s electronic properties, the Journal said.
   In his interview in the Times, Murdoch also said he won’t meddle in the Journal’s journalism or cut staff.
   ‘We’re not coming in with a bunch of cost-cutters,’ the paper quoted him as saying. ‘I’m not saying it’s going to be a holiday camp for everybody.’
   But News Corp. plans to let some time pass before it begins any serious outreach to the Bancrofts, hoping to let the family sort out its own viewpoints first, the Journal reported.
   Murdoch told the Times that he had no intentions of breeding dissent among Bancroft family members to land the deal.
   ‘I don’t want to be in a position of putting one Bancroft against another Bancroft. I’m not in the business of stirring up trouble in the family,’ the Times quoted him as saying.
   Dow Jones has said the Bancrofts planned to vote shares constituting slightly more than 50 per cent of the outstanding voting power against the bid.

Starbucks Corp reported an 18.5 per cent rise in quarterly earnings on Thursday, helped by hundreds of new stores and demand for new products including hot breakfast sandwiches and a sugar-free version of its popular Cinnamon Dolce latte.
   The company also reported improved operating margins and backed its 2007 earnings forecast, sending shares up 1.4 per cent in extended trading.
   Second-quarter net income was $150.8 million, or 19 cents per share, in-line with Wall Street analysts’ average estimate, according to Reuters Estimates. In the same period last year, Starbucks earned $127.3 million, or 16 cents per share.
   ‘Starbucks reported a solid, in-line quarter and reaffirmed guidance which should be reassuring to investors,’ said Mike Koskuba, analyst with Victory Capital Management.
   ‘In the recent past, operating margins were lower than some investors had anticipated due to higher labor costs, commodity costs and costs associated with store openings. Now, it appears that there should be improvement in margins as we move through the year,’ he said.
   Revenue rose 19.6 per cent to $2.26 billion. Analysts were expecting about $2.3 billion, according to Reuters Estimates.
   Same-store sales, a key retail measure that tracks sales at coffee shops open at least 13 months, rose 4 per cent, in-line with the company’s long-term goal.
   Chief Executive Jim Donald said in an interview that a sale of brewing equipment, the expansion of hot breakfast sandwiches to several new markets, and strong demand for the sugar-free Cinnamon Dolce latte had helped boost sales at older stores.
   Operating margin was 10.7 per cent of total revenue, matching the margin the company recorded in the same period last year. In the first quarter, Starbucks’ operating margins had decreased from year-earlier levels.
   Donald said that lower store operating and general and administrative expenses had helped offset higher occupancy costs and added that he expected margins to continue to improve later this year.
   ‘We said we were going to continue to see some improvement and we did,’ he said.
   The Seattle company opened 560 stores during the quarter and plans to open a total of 2,400 this year. It currently has about 13,700 coffee shops worldwide.
   The company also announced a new share buyback authorization of 25 million shares.

The Philippine business community Friday welcomed a billion dollar investment by Texas Instruments as a positive move that may signal a rebirth in the country’s benign manufacturing sector.
   The US-chip maker on Thursday announced it will invest one billion dollars expanding its Philippine operations in what President Gloria Arroyo described as ‘one of the single biggest investments’ in the country’s economic history.
   The plant, which will be located in the Clark Freeport Zone north of Manila, will effectively double its operations in the country that began 28 years ago in the northern mountain city of Baguio.
   Texas Instruments will build a 77,000 square-meter (828,520-square-foot) assembly and test operations facility in a 32-hectare (79-acre) site at the former US Air Force Base.
   Regarded as a world leader in digital signal processing and analog technologies, Texas Instruments is a Fortune 500 company with revenues that amounted to 14.3 billion dollars last year.
   ‘Its a good sign,’ Robert Sears the executive director of the American Chamber of Commerce of the Philippines told AFP.
   ‘It will send a great message to foreign investors and particularly American investors that the Philippines can be considered for large scale investment.’
   Michael Clancy, CEO of the Philippine Business Leaders Forum, said: ‘the move is positive for the Philippines and for the manufacturing sector which has been in the doldrums for years.’
   The deal came just days after Arroyo signed a new executive order granting major tax and economic concessions to promote the Clark Freeport Zone as an ‘economic haven in the Asia - Pacific region.’
   Raffy Galvez, marketing manager for the Clark Development Corporation, told AFP that one of the incentives is a flat tax of five per cent on gross income earned as opposed to the normal tax rate of 32 per cent.
   He said companies will also be able to import capital equipment and raw materials duty free.
   ‘Companies will also be exempted from paying property tax for the duration of their contract,’ he said.
   He would not comment specifically on the Texas Instruments deal but added that companies in the economic zone will also benefit from easy access to working visas for foreigners and a ‘one-stop’ centre for processing import, consignment and export permits.
   One of the biggest complaints from foreign businessmen doing business in the Philippines was the time taken tied up with bureaucratic red tape.
   A power plant will also be built for the facility’s exclusive use, though the main electrical grid will still be tapped.‘The Philippines can be productive and cost effective,’ Clancy said.
   ‘Incentives to attract foreign investment is not a problem and long overdue. You have to give something away to get the money coming in.’
   ‘This will give a major boost to the economy especially to the semi-conductor industry,’ Lawrence de Leon an analyst with Accord Capital Equities Inc.
   ‘And there is a good chance that we will see a major spillover into the economy as a result.’
   Although businessmen have complained about the country’s neglected infrastructure and obsession with politics, de Leon says the investment shows that Texas Instruments ‘is looking beyond the regular problems in the Philippines.’
   ‘They believe that issues will be addressed. They’re looking at the long-term picture,’ he said.
   Last year the Philippines attracted 2.35 billion dollars in foreign investment, much less than its Southeast Asian neighbors.
   However, a survey by Hong Kong-based Political and Economic Risk Consultancy recently found the Philippines to be one of the most corrupt countries in Asia to do business in.
   According to the Philippine Trade Secretary, Peter Favila, the investment of Texas Instruments could be as much as 1.7 billion dollars over the next 10 years.
   Kevin Ritchie, senior vice president for Texas Instruments, told a press conference on Thursday that the quality of the workforce, incentives offered by Philippine government and power supply were crucial in the decision.
   Texas Instruments began operating in Baguio in 1979, becoming the first multinational corporation to locate in the Philippines under the Philippine Economic Zone Authority.
   Investment in the company’s existing facilities and equipment has totalled 711 million dollars and it employs 2,500 people.
   Texas Instruments last year exported 3.5 billion dollars worth of products made and assembled in the Baguio facility, accounting for 35-40 per cent of the company’s revenues worldwide, Ritchie said.

China recorded 19 million new cellphone users, equivalent to the entire population of Scandinavia, in the first three months of the year, the government said Friday.
   At the end of March, the number of Chinese mobile phone users hit 480.7 million, up from 461.1 million at the end of last year, the Ministry of Information Industry said.
   Fixed-line users increased to 371 million from 367.8 million during the period, the ministry said in a statement on its website.
   The telecommmunications industry earned revenue of 165.1 billion yuan (21.4 billion dollars) in the first three months, up 8.4 per cent year-on-year, according to the ministry.

Venezuelan president Hugo Chavez threatened Thursday to nationalize the country’s largest steel company and private banks unless they make national interests a priority.
   In a nationally televised speech, the leftist president said he would nationalize steel maker Sidor if it continued to sell its products abroad instead of selling them to domestic industries, particularly in the oil sector.
   He also announced plans for a law to force the private banking sector to give top priority to the financing of domestic companies.
   If the banks flout the law, he warned, ‘they should leave.’
   The outspoken champion of ‘21st century socialism’ and leader of the world’s fifth-largest oil exporter holds the power to rule by decree for 18 months, granted in January by parliament.
   Chavez said that Sidor—a multinational steel maker that makes 60,000 tons of tubes for the oil industry—’had created a monopoly through its relationships with other companies and they only supply the raw material to these companies, leaving us to import these tubes from China.’
   ‘That is unacceptable. If Sidor, which was privatized, does not accept from now on to change this way of operating, then they will force me to nationalize it the same way we did with CANTV,’ the state telecommunications firm.
   Sidor was privatized in 1997 and acquired by the Latin American consortium Orinoquia, which groups Siderar of Argentina, Mexican firms Tenaris Tamsa and Hylsamex, Usiminas of Brazil and Venezuelan firm Sivensa. The Venezuelan state owns 10 per cent of its shares.
   The leftist governments of Venezuela, Argentina and Brazil are driving an integration process in South America, guided by their shared principles.
   ‘A number of time we have talked about the Sidor case; some urged me to nationalize it, I said that it was Latin American investments, let’s talk. There is Argentine, Brazilian capital, let’s see if they can behave differently from transnationals,’ Chavez said.
   Chavez said he had instructed his industrial and mining minister, Jose Khan, to come back with a recommendation on the steel sector within 24 hours.
   The president dismissed any potential counter-proposals from the companies: ‘It must be done immediately.’
   Sidor not only must assure steel supply to Venezuela, it also must do it at ‘a low price,’ not the international price, he said.
   Chavez’s latest nationalization threats came two days after the government finalized control of privately run installations in the Orinoco River basin, possibly the world’s richest oil fields.
   The key oil move was authorized by a law that obliges transnational companies operating in the vast region to hand over 60 per cent of their assets to the Venezuelan state.
   After his landslide re-election in December for another six-year term, Chavez, who has been in power since 1999, has stepped up state control of strategic sectors such as oil exploration, electricity and telecommunications.
   On Monday Chavez announced he was withdrawing Venezuela from the International Monetary Fund and the World Bank, calling them ‘tools of imperialism’ to exploit poor countries.
   Chavez warned banks Thursday they were expected to support his program.
   ‘I invite the private banking sector to join in this effort. In any case, we are preparing a law to oblige them to do it, in case they refuse,’ Chavez said.
   ‘If private banks don’t want to be involved, then they should leave.’

Indonesia will distribute gas stoves to more than four million poor households this year in an attempt to soften the blow of a planned cut in the kerosene subsidy, a report said Friday.
   The government has announced it will cut the subsidy, costing 40 trillion rupiah (4.4 billion dollars) annually, in 2008 to reduce its enormous fuel subsidy bill amid recent record global oil prices, the report said.
   The resulting price jump is expected to impact on millions of impoverished Indonesians who use kerosene for cooking, and could trigger protests.
   State oil and gas company Pertamina has commissioned the production of 4.5 million small stoves, each with a filled bottle of gas, to be rolled out to households in stages this year, state Antara news agency said.
   ‘In the initial step, we will distribute 380,000 units to households in Jakarta and surrounding areas on May 8,’ Pertamina director Ari Sumarno said.
   Another one million households in Central and East Java will receive, later this month, the same package.
   At six dollars each, the packages are expected to cost the government 27 million dollars.
   A government study late last year found 39.05 million people out of a population of 220 million live below the poverty line. Many of those use wood as fuel for cooking.
   Increases in the price of fuel are politically sensitive in Indonesia.
   The government triggered nationwide protests in 2005 when it implemented an average 29-per cent increase in the price of fuel to relieve some of the pressure caused by crippling state subsidies after then high global oil prices.

Russian state-run oil major Rosneft bought key assets belonging to bankrupt oil group Yukos on Thursday for 6.8 billion dollars (5.0 billion euros) in a deal that analysts said made the firm Russia’s biggest oil producer.
   The deal is a further boost for Rosneft, whose chairman Igor Sechin is the deputy head of the Kremlin administration, and confirms the company’s status as the main beneficiary from the auctioning off of the once mighty Yukos empire.
   A Rosneft spokesman said the company was ‘very happy’ with auction.
   ‘The purchase of assets in eastern Siberia will help us strengthen our position in this region. It’s a strategically important region for us,’ Nikolai Manvelov said.
   The auction took place at Yukos headquarters in Moscow and included the sale of Tomskneft, the East Siberian Oil and Gas company and other major production and refining units in eastern Siberia, auction officials said.
   Chris Weafer, chief strategist at Alfa Bank in Moscow, cited production figures from April showing that Rosneft capacity would now be 1.86 million barrels per day, over Lukoil’s 1.8 million barrels per day.
   ‘It’s no surprise. Rosneft has made it very clear that they want to acquire the production assets ... from Yukos because they want to become Russia’s biggest oil producer,’ Weafer said.
   Neft Aktiv, a Rosneft subsidiary, and Unitex, a company linked by Russian newspapers to state-controlled gas giant Gazprom, were the two bidders in the auction and the starting price was 6.4 billion dollars.
   The two state-run giants have been fighting over control of Yukos assets.
   Weafer said the fact that Rosneft was awarded the sale meant that Gazprom was more likely to win control over Samaraneft, another key Yukos production asset, which is due to be auctioned off on May 10.
   The sale was arranged by Russia’s state property agency in order to pay tax debts owed by Yukos to the state after a series of fraud inquiries that have dismembered the oil empire.
   ‘The price is acceptable ... It’s a considerable sum that will go towards paying creditors,’ said Nikolai Lashkevich, a spokesman for Yukos’ court-appointed bankruptcy administrator.
   Yukos was once Russia’s largest oil group and its CEO, Mikhail Khodorkovsky, the richest man in the country. But, starting in 2003, the group came under a slew of fraud inquiries and it has since been bankrupted.
   Critics have seen the fate of Yukos as a Kremlin-controlled campaign to win back energy assets for state companies and block the politically ambitious Khodorkvosky, who is now serving an eight-year prison sentence in Siberia.
   Only a few years ago, Rosneft was a little-known state oil firm.
   In 2004, Rosneft bought Yuganskneftegaz, a key Yukos production asset, in an opaque transaction and at a fraction of the price for the asset estimated by independent experts.

Southeast Asian states and the European Union agreed Friday to launch free trade negotiations, setting aside differences over alleged human rights violations in army-ruled Myanmar, an official said.
   EU trade commissioner Peter Mandelson reached the agreement with Association of Southeast Asian Nations economic ministers during a meeting in Brunei, ASEAN Secretary General Ong Keng Yong told AFP.
   ‘Yes, we agreed to launch the ASEAN-EU free trade negotiations,’ Ong said from the Brunei capital Bandar Seri Begawan.
   ‘We will set up a joint working committee to follow through this announcement ... The understanding is that we are talking to the EU as a group of 10 member countries and Myanmar is a member of ASEAN. No one will be excluded from the negotiating process.’
   ASEAN’s diplomatic ties with the EU has been strained over European concerns over Myanmar’s poor human rights record, including the continued detention of democracy icon Aung San Suu Kyi. The EU last month voiced new concern at ‘serious violations of human rights’ in Myanmar and extended its sanctions against the military regime there for another year.
   EU foreign ministers expressed ‘deep concern on the lack of tangible progress on the promised transition towards a legitimate civilian government’ and called for Aung San Suu Kyi’s release.
   The sanctions were first introduced in 1996 after Yangon failed to meet EU demands for greater democracy.
   Renate Nikolay, a member of Mandelson’s cabinet, told AFP on Thursday from Brunei that the EU remains aware of the political situation in Myanmar.
   ‘We never made it a secret that there is a political issue involved. What we are trying to avoid is to make this a stumbling bloc for the negotiations,’ she said.
   An independent analysis carried out by CEPII, France’s leading institute for research on the international economy, and Copenhagen Economics showed a free trade agreement would boost EU exports to ASEAN by 24.2 per cent.

Embattled World Bank president Paul Wolfowitz has strongly rebutted criticisms that he oversaw an improper pay and promotion deal for his partner, according to a letter released Thursday.
   Wolfowitz also said that he acted within World Bank rules in requesting pay hikes and promotions for Shaha Riza, his partner who also worked at the international development lender.
   ‘It is grossly unfair and wrong to suggest that I intended to mislead anyone, and I urge the committee to reject the allegation that I lack credibility,’ Wolfowitz said in a letter to a World Bank investigatory panel. The letter, released to the media Thursday, was dated Wednesday.
   ‘I vehemently deny that I went beyond what I understood to be the guidance I received’ from bank officials, Wolfowitz said.
   The World Bank chief was responding to claims by bank officials that he was never directed to personally order guaranteed promotions and a lucrative pay deal worth nearly 200,000 dollars for his Libyan-born companion.
   The spat between the World Bank president and key high-level staffers has pitched the institution into crisis and sparked an internal inquiry into Wolfowitz’s actions.
   The investigatory panel is due to report its findings to the bank’s board soon although it is unclear what course of action the board may take despite mounting calls for Wolfowitz’s resignation.
   The simmering standoff is threatening to hobble the World Bank’s development activities.
   The New York Times reported Thursday that some bank donors have indicated they would refuse to approve new donations to loans for some of the world’s poorest states as long as Wolfowitz remains at the helm.

South Korea, preparing to open free trade talks with the European Union, said Friday an agreement would bring it major benefits including a cut in a mounting trade deficit with Japan.
   ‘A free trade agreement with the EU will provide important economic and strategic benefits to South Korean companies,’ said deputy foreign and Trade Minister Kim Han-Soo.
   Asia’s third-largest economy will hold the first round of negotiations with the EU from next Monday to Friday, one month after wrapping up a landmark deal with the United States.
   Trade minister Kim Hyun-Chong and EU Trade Commissioner Peter Mandelson will formally launch the round in Seoul on Sunday.
   No deadline was set but South Korea hopes to complete talks with the EU within one year, Kim Han-Soo was quoted by Yonhap news agency as saying.

Wal-Mart Stores Inc said on Thursday it contributed $1.1 billion to US hourly associates through profit sharing and 401(k) accounts, stock purchase plans and merchandise discounts in its last fiscal year.
   It was the first time that Wal-Mart, which faces criticism from labour groups and politicians for its pay and health-care practices, disclosed the contributions. Spokeswoman Sarah Clark said the retailer was not providing previous figures.
   Earlier this year, Wal-Mart said it was paying almost $530 million in bonuses to hourly US store employees, marking the first time the retailer had released the bonuses.
   Wal-Mart said that historically it has contributed 2 per cent of an employee’s pay to a profit-sharing plan and 2 per cent to a 401(k) retirement plan.
   The retailer said employees do not have to contribute their own money to the plans to get the company contribution.
   For its fiscal year ending January 31, Wal-Mart said it contributed $667 million to 815,629 hourly associates in profit-sharing and 401(k) contributions; $51.4 million to 706,389 hourly associates toward its associate stock purchase plan; and $397 million in discounted merchandise.
   Wal-Mart shares rose 14 cents to $48.42 in afternoon New York Stock Exchange trading.

Nickelodeon, the US children’s television network, plans to create its own theme park in the booming Gulf emirate of Dubai, developers announced on Thursday.
   The theme park is due to open in 2011 and will form part of the Al Ahli Park leisure development under construction in Dubai, the Al Ahli Group group said in a statement.
   The developers did not state the cost or size of the theme park, but said it would feature attractions based on popular Nickelodeon cartoon characters such as SpongeBob SquarePants and Dora the Explorer.
   Last month, the US film studio Universal announced it was setting up a 2.18-billion dollar theme park in the affluent city-state, which wants to position itself as a global tourist destination.
   Dubai, one of seven emirates making up the UAE, is in the midst of a construction frenzy, with resorts, malls, sport installations and residential complexes sprouting up across it desert sands.

Australia’s trade deficit ballooned out to 1.62 billion dollars (1.34 billion US) in March, official figures showed Friday.
   The deficit in goods and services was well above the revised 728 million dollars of February, the Australian Bureau of Statistics said.
   The market consensus forecast was for a 1.0 billion dollars deficit.
   The figures showed that exports fell 4.0 per cent while imports rose 1.0 per cent.
   Analysts said resource exports were held back by infrastructure bottlenecks while an appreciation in the Australian dollar was hurting export competitiveness.
   ‘The data reveals a worse export performance, heavily impacted by likely temporary resource infrastructure bottlenecks and delays, after a moderate improvement over the prior two months,’ UBS economist George Tharenou said.
   ‘The decrease in exports largely reflected lower metals ores, gold and mineral fuels, with cereals also down again.

Asia must step up financial cooperation to cope with large capital inflows that are putting the squeeze on the region’s most open economies, the head of the Asian Development Bank said Friday.
   Many Asian nations are seeing an appreciation of their currencies as low interest rates in countries such as Japan and Switzerland encourage investors to borrow cheaply there to invest in fast-growing developing economies.
   ‘Small open economies in Asia like Thailand or Malaysia, certainly their economies are affected by a large inflow of capital from outside,’ ADB president Haruhiko Kuroda said ahead of the bank’s annual meeting in Kyoto.
   ‘This is a real challenge for any small, open economy. One way (to cope) is financial cooperation among small open economies to mitigate the impact of fluctuations of capital flows,’ he said.
   Regional currencies such as the Thai baht, Indonesian rupiah, Singaporean dollar and Philippine peso have all appreciated sharply against the dollar recently, making life tougher for exporters in the region.
   Thailand has taken some of the most draconian steps to curb the baht’s rise, imposing capital controls in December which required 30 per cent of all incoming investment to be withheld for up to one year.
   Kuroda also urged China to embrace further currency flexibility to allow an appreciation of the yuan.
   ‘I think the Chinese authorities have made the currency gradually more flexible and I think this trend would and should continue. Greater exchange rate flexibility would be in the interest of the Chinese economy,’ he said.
   The ADB’s governors meet this weekend to assess the health of the Asian economies a decade after a regional financial crisis as well as prospects for further financial integration and the development bank’s own future.
   Finance ministers from the Association of Southeast Asian Nations (ASEAN) as well as China, Japan and South Korea also meet here Saturday to discuss ways to bolster their defences against another regional financial crisis.
   Meanwhile, the ADB’s chief economist said Asia’s emerging economies should spend some of their huge foreign exchange reserves to improve the lives of their people and underpin future growth.
   Asian finance ministers meeting here Saturday will discuss ways to further bolster their defences against a possible repeat of the 1997 regional financial crisis by improving their system of currency swaps.
   But ADB chief economist Ifzal Ali said that guarding against possible speculative attacks on currencies should no longer be the priority.
   ‘The challenge facing Asia is in fact too much reserves and the long term negative effects of this,’ he told AFP in an interview ahead of the ADB’s annual meeting in Kyoto, Japan this weekend.
   ‘While it is not as dramatic as a crisis, over time it does eat away at opportunities for higher rates of growth, higher investments. This is particularly true for the Southeast Asian countries where investment never recovered to pre-crisis days,’ he said.
   Developing Asia should now be considering ‘investing in the countries, the people, the environment, energy (and) infrastructure so that there is a better tomorrow for everybody,’ he added.
   The ADB estimates that developing Asia’s foreign exchange reserves are together worth almost 2.3 trillion dollars.
   Ali said some of the reserves—which are believed to be invested mostly in US-dollar instruments—could be channeled into higher yielding assets or spent on infrastructure or other worthwhile projects.
   One country that already has a policy of actively managing its reserves is Singapore, which set up an investment management company in 1981.
   But better returns would not improve standards of living unless the money was actually spent, Ali said.
   ‘What is happening now with the build up of reserves is that if you export for the sake of exports, the people living in these countries don’t benefit. In the long term that is what has to be really the focus of attention,’ he said.
   Ali said the outlook for the Asian economies was generally upbeat although the US economy seems to be cooling more than expected.
   ‘From the US it seems that there is going to be a sharper slowdown than had been anticipated. The US housing market problem seems to be more acute than had been anticipated,’ he said.
   ‘Particularly, the early signs that there would be no contagion from the ‘subprime’ mortgage market probably was over-optimistic,’ Ali said, referring to failures in mortgages held by people with below-average credit histories.

General Motors reported a 90 per cent drop in quarterly profits Thursday as losses at its lending arm due to weakness in the housing market offset improved results in automotive operations.
   The net profit for the Detroit auto giant amounted to 62 million dollars, down from 602 million in the first quarter of 2006.
   The results excluding special item were 17 cents per share, well below market expectations of 84 cents per share. GM shares plunged 4.13 per cent to 31.16 dollars in morning trade.
   Automotive operations produced a net profit of 272 million dollars in the quarter as GM showed some progress in pulling out of a slide that has allowed Japan’s Toyota to overtake the Detroit firm as the world’s biggest automaker.
   GM’s auto operations in North America lost 85 million dollars, narrower that the 251-million-dollar deficit a year earlier as the automaker began to reap the benefits of a massive restructuring program. ‘The first quarter of 2007 marked another quarter of continued progress in GM’s global automotive operations,’ said GM chairman and chief executive Rick Wagoner.
   ‘We were able to expand vehicle sales and improve automotive profitability based on the progress in our turnaround initiatives in North America and Europe and our expansion strategy for key growth markets like China, Russia and South America.
   ‘We continue to see progress on the automotive bottom line as we implement the strategies laid out two years ago.’
   GM’s chief financial officer said he was ‘quite confident’ the automaker would achieve its goal of reducing operating expenses by nine billion dollars this year and said further cost cuts could be achieved in the future.
   ‘We do expect to see continued year-on-year savings related to attrition and hourly retiree health care,’ Fritz Henderson said in a conference call with analysts.
   He forecast GM would achieve ‘improved automotive earnings and improved by negative cash flow and strong revenue growth outside of North America’ in the second quarter of this year.
   Henderson noted that GM had seen a significant improvement in revenue per vehicle which rose to 21,072 dollars in the first quarter of 2007 from 20,008 dollars in 2006 and 18,938 dollars in 2005.
   However, he cautioned that GM’s results could be impacted by volatile fuel prices should consumers continue to shy away from GM’s more profitable line of trucks and sports utility vehicles in favor of more fuel-efficient cars.
   The key area of weakness for the company was the GMAC financial arm, of which the automaker now holds 49 per cent of GMAC after selling a majority stake last year.
   GMAC was initially set up to finance car purchases but later expanded to mortgages, and now the unit is hurting from the weakness in so-called subprime or nonprime loans to people with weak credit histories.
   ‘The decline in reported GM earnings is more than accounted for by losses in the residential mortgage business of GMAC Financial Services, driven by continued weakness in the US nonprime mortgage sector,’ GM said in a statement.
   GMAC suffered a loss of 305 million dollars compared with a profit of 495 million a year earlier.
   The GMAC unit Residential Capital LLC (ResCap) alone suffered a loss of 910 million dollars ‘due to continued pressures in the US mortgage market,’ GM said.

British American Tobacco posted a near 10.0-per cent rise in first-quarter profit thanks to cost savings and an ‘excellent’ performance by its operations in emerging markets, the group said on Thursday.
   The data lifted the share price of BAT, the world’s second-biggest cigarette maker, to a record high in London trade, dealers said.
   BAT, the maker of Dunhill, Kent and Lucky Strike cigarettes, said net profit climbed to 495 million pounds (725 million euros, 986 million dollars) in the first three months of 2007 compared with the same period a year earlier.
   Group revenue dropped 3.0 per cent to 2.232 billion pounds, but cost savings meant BAT posted a profits rise.
   ‘The first quarter has been somewhat flattered by excellent performances in Brazil and South Africa,’ BAT chairman Jan du Plessis said in comments accompanying the earnings release.
   However BAT cautioned that the performance was unlikely to be repeated during subsequent quarters this year.
   The global tobacco industry is undergoing a shake-up following several takeover approches and mergers.
   Britain’s Imperial Tobacco has made a 12-billion-euro bid (16.4 billion dollars) for Franco-Spanish cigarette maker Altadis and is deciding whether to hike its offer.
   And last month, Japan Tobacco Inc completed its 2.25-trillion-yen (19.0 billion dollars) acquisition of British rival Gallaher Group.
   But analysts at broker JP Morgan said that BAT was unlikely to participate in further European consolidation.
   ‘We see the first-quarter results as evidence that BAT’s portfolio, with its high exposure to emerging markets and improving mix, is already attractive.’
   Investors cheered BAT’s earnings news, sending its share price to a record high of 1,620 pence.

The dollar fell in Asian trade Friday on consolidation after better-than-expected US economic data, easing fears the world’s biggest economy was slowing too fast, dealers said.
   They said the market was now waiting for the key US employment report due later Friday for its next lead on the US economic outlook.
   At 2:25 pm (0625 GMT), the dollar was at 120.29 yen, down from 120.41 yen in New York late Thursday.
   The euro rose to 1.3562 dollars from 1.3549 and to 163.1433 yen from 163.60.
   Markets in Japan were closed Friday and will reopen Monday, making for a quieter day Friday.
   Dealers said players were adjusting positions after better-than-expected US data and are looking to Friday’s US non-farm payrolls report, seen as one of the best indicators for further clues on the health of the US economy.
   ‘Today is all about US non-farm payrolls,’ said Jan Lambregts, head of Asia research at Dutch lender Rabobank in Hong Kong.
   The market is expecting the report to show 100,000 new jobs created but a weaker figure might lead to a fresh sell-off in the dollar, dealers said.
   US data this week has been generally stronger than expected, lessening the chances for an early US interest rate cut and so helping the dollar.
   ‘So far this week, the US data has been better-than-expected and the dollar has been supported by it,’ said Thomas Lam, a treasury economist with Singapore’s United Overseas Bank.
   The Institute for Supply Management (ISM) reported that the US service sector expanded at a faster-than-expected rate in April.
   The ISM non-manufacturing business index rose to 56.0 from 52.4 in March, higher than the 54.0 economists had expected.
   A reading above 50 indicates growth in the sector, while a reading below 50 indicates contraction. The survey followed a stronger-than-expected survey on the manufacturing sector from the ISM.
   Another report showed US labor productivity rose 1.7 per cent in the first quarter.
   Against key Asian units, the dollar fell to 47.49 Philippine pesos from 47.62 on Thursday, to 33.273 Taiwan dollars from 33.306, to 1.5226 Singapore dollars from 1.5228, and to 9,012.5 Indonesian rupiah from 9,042.5.

Southeast Asia’s biggest lender DBS Group said Friday its first quarter net profit rose 19 per cent from a year earlier to 617 million dollars (409 million US), driven by record interest and fee income.
   Compared with the previous three months to December, net profit was up 11 per cent, DBS said in a statement. Total income jumped 21 per cent from last year to 1.54 billion dollars.
   Net interest income—the difference between interest paid and interest earned—rose 15 per cent from a year ago and 5.0 per cent from the last quarter to 974 million dollars, a quarterly record.
   Customer loans climbed 20 per cent over the last year, led by corporate borrowing in the Singapore market and the region.
   Driven by a strong local economy and a robust property market, Singapore housing loans expanded for a third straight quarter, the bank said.
   ‘Our Asia customer franchise delivered yet another quarter of consistent growth, even in the face of strong margin pressure,’ DBS chief executive Jackson Tai said.

SilkAir to hike
fuel levy
Singapore Airlines’ regional unit SilkAir will raise its fuel levy by at least two US dollars from next week to cope with higher fuel prices, the carrier said in a statement Friday. The fuel levy for tickets from Singapore to Southeast Asia will rise from 18 dollars to 20 dollars from May 9 onwards, SilkAir said in a statement. For destinations to other parts of Asia, the surcharge will increase from 54 dollars to 58 dollars, it said. SIA had announced Thursday its own fuel levy will increase by two to seven dollars from May 9 to absorb part of the costs of rising jet fuel prices. The hikes by SIA and SilkAir came less than two months after the last increase.
— AFP

Apple getting greener: Steve
Apple chief executive Steve Jobs on Thursday responded to attacks by environmental groups accusing the famously hip maker of iPod MP3 players of not being green enough. ‘Apple has been criticized by some environmental organizations for not being a leader in removing toxic chemicals from its new products, and for not aggressively or properly recycling its old products,’ Jobs said.
— AFP

Taiwan forex reserves fall
Taiwan’s foreign exchange reserves totalled 266.54 billion US dollars at the end of April, down 945 million dollars from the 267.49 billion dollars recorded in the preceding month, the central bank said Friday. The decline came mainly due to an increase in foreign assets held by domestic investors, it said.
— AFP

Hong Kong gold closes higher
Hong Kong gold prices closed higher Friday at 680.50-681.00 US dollars an ounce, up from Thursday’s close of 674.60-675.10 dollars. The market opened at 681.00-681.50 dollars.
— AFP