The Bangladesh Today (12-02-2018)

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ECONOMY & BUSINESS MONDAy, THE BANGLADESHTODAY FEBRuARy 12, 2018 10 The business review meeting-2018 of greater Comilla and Noakhali regions branch managers of Karmasangsthan Bank held on Saturday at Nazrul Institute, Comilla. Managing Director of the bank Md. Abul Hossain attended as chief guest.Bank's General Manager M H Md. Ali Karim was present in the meeting as special guest. Deputy General Manager Mohammad Shafiul Azam presided over the meeting. Photo: Courtesy China's January inflation eases on carryover effect China's consumer price index (CPI) rose 1.5 percent year-on-year in January, in line with economist forecasts. The index was down from December's 1.8 percent, driven largely by the carryover effect, National Bureau of Statistics (NBS) statistician Sheng Guoqing said Friday. "Food and non-food prices surged in January last year when the Spring Festival holiday formed a high base effect, help bringing the index down last month by 0.3 percentage points," said Lian Ping, chief economist with the Bank of Communications. Service and non-food prices climbed 2.3 percent and 2 percent year on year, respectively, according to the NBS. On a monthly basis, CPI was up 0.6 percent, higher than the 0.3-percent in the previous month. The month-on-month rise was mainly attributed to higher food prices, influenced by bad weather, according to Sheng. "The inflation in February would probably be the highest this year since the CPI was 0.8 percent during the same period last year, the lowest month in 2017," Lian said. However, the possible index hike in February will not bring much inflationary pressure to the whole year as it cannot last. Lian forecast that the CPI in 2018 might stand at 2 percent on average, higher than the 1.6 percent registered in 2017, but well below the government target of 3 percent. Consumer demand will not be strong enough to prop up a high-rising CPI, given that China has been stepping up efforts to deleverage and contain financial risks as it looks to move from high-speed to high-quality growth. The CPI figures came alongside the release of the producer price index, which rose 4.3 percent year-onyear in January, driven by fast price rises of raw materials and minerals. It was down from a growth of 4.9 percent recorded in December, according to the bureau. On a monthly basis, the index was up 0.3 percent, down from 0.8 percent the previous month. For the whole of 2017, the PPI climbed 6.3 percent compared with a 1.4-percent drop in 2016, ending declines for the previous five years. Looking ahead, Lian expects the PPI in 2018 to be around 3.5 percent, lower than last year, driven mainly by the carryover effect. Analysts say the mild inflation leaves ample room for the government's macro policy maneuvers. Tian Guoqiang, professor with Shanghai University of Finance and Economics, said that China would be able to make better use of monetary and fiscal policies to relieve the burden for the real economy. China will adopt a prudent and neutral monetary policy and a proactive fiscal policy this year, according to the central economic work conference in December. With a low inflation level, the country can continue to deepen supply-side structural reform, raise innovation capacity and competitiveness of the economy and push forward high-quality development, Tian said. High-quality development is the "fundamental requirement" for determining development, economic policies and macroeconomic regulation, according to policymakers. Oil majors strike it rich on rising crude prices The world's leading oil companies published a bumper crop in profits last year as rising crude prices helped turn their fortunes around, but they remain cautious and are unlikely to rush out on a new spending spree just yet. In a flourish of earnings reports over the past week, the picture painted by majors ranging from ExxonMobil and Chevron to BP, Royal Dutch Shell and Total has been a very rosy one. French giant Total saw its bottom line jump by more than a third, Shell's net profit tripled, ExxonMobil's fourth-quarter earnings rose nearly five-fold, Norway's Statoil swung back into the black and BP's profits soared. In fact, "2017 was one of the strongest years in BP's recent history," the British group's chief executive Bob Dudley told his annual earnings news conference. Key to this success was the steady rise in crude prices in recent months, driven by a landmark deal between oilproducing countries both inside and outside the OPEC cartel to reduce the worldwide glut in supply by throttling output. Correspondingly, after falling from $115 per barrel in 2014 to under $35 at the start of 2016, oil prices have been rising, from an average $44 in 2016 to $54 in 2017 to nearly $70 this month. Flush with their newfound profits, the oil majors have raised dividends and announced share buy-back programmes, eager to make it up to their shareholders who have become restive after having to do with meagre payouts for years. But it's still a far shot from the heady days of old. Companies have learned to live with low oil prices, slashing costs and investment to become leaner and fitter, and said they have little intention of abandoning that regime any time soon. Shell's CEO Ben van Beurden said he now always works on the assumption that oil prices would remain "lower forever". "We're sticking to the costcutting programmes, despite the rise in crude prices," said Total chief executive Patrick Pouyanne. Such prudence is evident in the only modest uptick in investment in upstream exploration and production activities. Globally, these investments rose by four percent to $389 billion last year and should increase by a modest two-to-six percent again this year, according to estimates published by IFP Energies Nouvelles this week. By comparison, the amount totalled $683 billion in 2014. Developments vary from region to region, and the anticipated growth this year is driven almost entirely by independent companies and US shale firms, whose overheads are much lower. The majors, for their part, expect to cut investment in exploration and production by 16 percent this year. "There's been a sigh of relief across the boardrooms of the global oil and gas companies as higher prices have boosted results significantly," said David Elmes, energy specialist at the Warwick Business School. "But there's also a hesitancy and uncertainty about the longer term which is tempering any return to full speed ahead," he said. Companies are holding back because oil prices look set to remain volatile and vulnerable to fluctuation. Demand for oil from energy-hungry economies, such as China and India, is expected to remain robust. But the market's muchneeded rebalancing could be jeopardised by increased production by US shale companies. "I'm certain that US independents will again invest a lot to profit from a price of $60 per barrel and ramp up shale production, so the market is going to remain volatile," said Total's Pouyanne. China central bank skips open market operations for 13th consecutive working day China's central bank suspended open market operations for the 13th consecutive working day Sunday, citing sufficient liquidity in the banking system. The move is to offset the influence from factors such as the use of Contingent Reserve Arrangement (CRA) and fiscal expenditure to maintain stable liquidity in the banking system, said the People's Bank of China (PBOC) on its website. Wall Street's plunge this week has brought scrutiny to complex niche products to trade on volatility that market experts believe were poorly structured and exacerbated swings in stocks. Only days before markets began to go haywire, Barclays chief executive Jes Staley warned about the risky investments at the World Economic Forum in Davos. Many investors were using the exchange-traded products to place bets that volatility would stay low or go down, a "very smart" wager during a period of persistently low volatility, Staley said. "But if this thing turns, hold on to your hat," he added. That change took place on Monday as the Dow Jones Industrial Average was in the midst of a more than 1,000 point drop that included a violent 800-point dive in the blue-chip index over 10 minutes. During that period, the CBOE Volatility Index, known as the "VIX" index, also shot higher. That shift spelled instant losses for "short-vol" trading vehicles, including exchange traded products by Japanese bank Nomura and Credit Suisse that had predicted volatility would go down, known as a "short" investment. Because the VIX is known unofficially as Wall Street's "fear" index over possible bad future outcomes, a sudden surge likely S.Korea's exports fall in early February on less business days South Korea's exports fell in the first 10 days of February due to less business days, the customs office data showed Sunday. Exports, which account for about half of the economy, reached 14.8 billion U.S. dollars during the Feb. 1-10 period, according to the Korea Customs Service. It was down 1.8 percent from the same period of last year as the number of working days reduced to eight days from 8.5 days a year earlier. The daily average exports, however, gained 4.4 percent to 1.85 billion dollars in the cited period. The country's export kept an upward contributed to the brutal losses in the equity markets. Short bets on volatility had become a popular stance, outnumbering trades that anticipated a rise in volatility and in one case earning a return of almost 200 percent in 2017, according to a note from Goldman Sachs. "Hedge funds, prop traders, retail investors... everybody was on the same exposure," said Brett Manning, senior market analyst at Briefing.com. "It worked really well for a long time." But the investment suddenly went south when markets turned sharply on February 2, when a surprisingly strong US jobs report sparked worries about inflation. "Everybody was on the same side of the trade," said Manning. "Hedge funds started to move out and people started to panic to cover these investments." Conditions worsened this week, leading both Credit Suisse and Nomura to liquidate their funds amid heavy losses. In the aftermath of the turbulence, Fidelity Investments halted trading on exchange traded funds that bet on low volatility. While it's impossible to know the exact losses, the market was estimated at between $3 billion and $4 billion, a small part of the overall market for exchange traded products, a growing type of investment that is momentum for 15 months through January, but it was widely forecast to fall in February as the number of working days reduce due to the Lunar New Year's holiday next week. Demand for semiconductors kept a double-digit expansion this month, with exports for oil products and cars rising. The shipments of smartphones continued to fall as local manufacturers increased production in overseas factories. Imports advanced 17.6 percent to 16.6 billion dollars in the cited period, sending the trade balance to a deficit of 1.84 billion dollars. Stocks' drop brings scrutiny of complex low-volatility bets traded on exchanges and based on assets, such as stocks, commodities or indices. The investments were widely known in the financial world as failure-prone because of the tendency of markets to eventually become volatile. Credit Suisse even warned in its prospectus that the "long-term expected value" of the investment is "zero." "The main purpose was to be an insurance but people started buying and selling it in sort of a casino fashion," said FTN Financial chief economist Chris Low. Regulators are now looking more closely at the vehicles. Swiss regulators are following up with Credit Suisse, and New York Federal Reserve President William Dudley pledged more scrutiny of the products. Asset manager BlackRock called for a "regulatory classification system that would label levered and inverse exchange traded products differently than plain-vanilla (ones) in order to clarify for both regulators and investors the risks associated with those products." One consequence of this week's shakeout is that the products in question have been "significantly defanged," making a repeat peformance of the February 5 chaos unlikely anytime soon, said a note from Bank of America Merrill Lynch. First Security Islami Bank sponsored 'FSIBL 3rd Diplomat Cup Tennis Tournament-2018 has been inaugurated recently. Md. Shahriar Alam, MP, State Minister, Ministry of Foreign Affairs, People's Republic of Bangladesh and President, Bangladesh Tennis Federation was present as chief guest and Mr. Syed Waseque Md. Ali, Managing Director, First Security Islami Bank Ltd was present as special guest on the program. Among others, Golam Morshed, General Secretary, Bangladesh Tennis Federation, Shahajada Basunia, Head of Public Affairs and Brand Communication Division, First Security Islami Bank Ltd and other officials were present on the program. Photo: Courtesy Over 20 m new companies registered in China in past 5 years Some 21.6 million companies were registered in the past five years in China, thanks to the government's push for entrepreneurship and innovation to bolster growth. Since China introduced mass entrepreneurship and innovation policies in 2014, more than 4,200 new hackspace companies have been created, serving over 120,000 start-up businesses and raising over 5.5 billion yuan (870 million U.S. dollars) In 2017, online sales increased by 28 percent and express delivery volume grew by nearly 30 percent. A string of new growth engines such as sharing and digital economies have been established. The government has cut red tape, reduced taxes and slashed fees for enterprises. Mass entrepreneurship and innovation has been an effective driver for both economic growth and the consistent transition between traditional and new growth engines. Crude oil futures to boost China's pricing power, cautiously : Economic China will launch crude oil futures on March 26, as the world's second largest economy moves to gain pricing power over commodities. After years of false starts, the crude futures contract will make its debut at the Shanghai International Energy Exchange (INE), the China Securities Regulatory Commission (CSRC), the country's top securities regulator, announced Friday. Preparations for the launch of the oil futures have almost been completed, Chang Depeng, spokesperson for the CSRC, told a press conference. China set up a petroleum exchange in the early 1990s but soon ceased trading due to reform and market factors. The contract will enable China to develop its own benchmark for oil pricing in addition to current global benchmarks. The Asia-Pacific region has surpassed America and Europe in crude consumption, but a benchmark with high recognition is still missing. China is the world's second largest oil consumer after the United States. Demand is likely to soar in the future as the country is thirsty for the source of energy to fuel its economic boom. In the absence of a crude benchmark in the region, Asian countries pay more than Europe and America for imported oil. It is an additional two billion U.S. dollars a year in the case of China. The WTI and Brent futures contracts are not accurate reflections of oil prices in Asia. China's crude contract offers companies in the real economy a hedging tool which better reflects market conditions in Asia, said Wu Jian, a senior researcher with the Bank of Communications. The new move will also boost yuan's global use through increasing the trade of yuandenominated oil. Currently, the main global benchmarks for crude oil are priced in U.S. dollars, threatening China's energy and economic security. The yuan-denominated contract means the Chinese currency will play a greater role in trade between China and other oil-producing countries. But analysts said it could take time before China's new oil futures challenge the dominance in oil trading of the two current global benchmarks, or the prominence of U.S. dollar in the global financial system. Bai Ming, a researcher with China's Ministry of Commerce, said it is natural that competition arises after long time of development, but challenge will not necessarily happen in the end.
MISCELLANEOUS 11 MoNDAY, FebruArY 12, 2018 Abbas tells India PM he seeks multi-country peace mediation Palestinian President Mahmoud Abbas told visiting Indian Prime Minister Narendra Modi on Saturday that he is counting on India's support for a multicountry sponsorship of any future Israeli-Palestinian negotiations, reports CNN. Such a framework would ostensibly replace Washington's long-standing monopoly as mediator. Abbas rejected the traditional U.S. role after President Donald Trump recognized contested Jerusalem as Israel's capital in December. Trump's pivot upset Palestinians who seek the city's Israeliannexed eastern sector as a capital. European leaders have criticized Trump's dramatic policy shift on Jerusalem, but appear unwilling to confront Washington over its handling of more than two decades of failed efforts to broker an Israeli-Palestinian partition deal. Modi's visit to the city of Ramallah was the first by an Indian prime minister to an autonomous Palestinian enclave in the Israelioccupied West Bank. The Indian leader pledged $41 A rare invitation to Pyongyang for South Korea's president marked Day Two of the North Korean Kim dynasty's southern road tour, part of an accelerating diplomatic thaw that included some Korean liquor over lunch and the shared joy of watching a "unified" Korea team play hockey at the Olympics, reports CNN. Nothing has been settled on any trip north by South Korean President Moon Jaein. But the verbal message on Saturday to come at a "convenient time" from GD-225/18 (10 x 3) million for a hospital, three schools and other projects in the West Bank. He said India remains "committed to Palestinian national rights," but stopped short of offering support for Abbas' political agenda. Modi's West Bank visit was seen, in part, as an attempt to compensate the Palestinians after he hosted Israeli Prime Minister Benjamin Netanyahu for six days last month, in a reflection of warming ties between Israel and India. Modi flew to Ramallah from Jordan by helicopter Saturday and laid a wreath at the grave of Abbas predecessor Yasser Arafat, located in Abbas' walled government compound. Modi then toured the Arafat museum, which is also part of the compound, before holding talks with Abbas. Abbas said after their meeting that he remains committed to negotiations with Israel as the path toward Palestinian independence. Palestinians seek a state in the West Bank, Gaza Strip and east Jerusalem, lands Israel captured in 1967, but no meaningful talks on statehood through dictator Kim Jong Un, delivered by his visiting younger sister, Kim Yo Jong, is part of a sudden rush of improving feelings between the rivals during the Pyeongchang Olympics. The result: a heady, sometimes surreal, state of affairs in a South Korea that has seen far more threat than charm out of the North. Still, it wouldn't be South Korea if people weren't asking the perennial question when it comes to North Korea changing gears and showering its rival with apparent affection: What's in it for Pyongyang? Past "charm offensives" have been interpreted as North Korea trying to recoup from crippling sanctions on their nuclear program, or trying to drive a wedge between Seoul and its U.S. ally. A massive military parade in Pyongyang on the eve of the just-opened Pyeongchang Games has been used as Exhibit A by skeptics. In it, Kim Jong Un highlighted several huge intercontinental ballistic missiles, which were successfully flight tested three a partition deal have been held for almost a decade. "We never have and never will reject negotiations," said Abbas. "We consider a multi-lateral mechanism that emerges from an international peace conference as the ideal way to sponsor the negotiations." Israel staunchly opposes any international framework for negotiations, arguing that only the U.S. can be a fair broker. The Palestinians have criticized Trump's shift on Jerusalem as a sign of blatant pro- Israel bias by Washington. The Indian leader arrived late Saturday night to Abu Dhabi, the capital of the United Arab Emirates. Abu Dhabi's powerful crown prince, Mohammed bin Zayed Al Nahyan, met Modi on arrival at the airport and had talks with him, according to the state-run WAM news agency. In honor of Modi's visit, the Burj Khalifa, the world's tallest building in Dubai, displayed the Indian flag on its massive LED light display. Abbas is scheduled to meet Monday with Russian President Vladimir Putin in Russia's Black Sea town of Sochi. Come visit: South Korea’s leader invited to North Korea times last year and could reach deep into the U.S. mainland when perfected. Kim Yo Jong was to have lunch Sunday with South Korean Prime Minister Lee Nak-yon, the country's No. 2 official, and return to Pyongyang on Kim Jong Un's private jet later in the day. The lunch Saturday at Seoul's presidential mansion between Moon and Kim Yo Jong was the most significant diplomatic encounter between the rivals in years. The night before, Kim and other North Korean delegates attended the opening ceremony of the Olympics, watching a "unified" Korean team march under a banner showing an undivided Korean Peninsula. In a surreal mixture of dignitaries, the Olympic Stadium's VIP box included Kim Yo Jong and North Korea's nominal head of state, Kim Yong Nam, sitting above and behind U.S. Vice President Mike Pence and fellow hard-liner Shinzo Abe, Japan's prime minister. Pence and the Kims seemed to go out of their way not to acknowledge each other. That was not the case with Moon - either at the games, when he enthusiastically reached up to shake Kim Yo Jong's hand, or at the lunch the next day. South Korean television showed its smiling president entering a reception room Saturday and shaking hands with the North Koreans. The opening part of the talks was mostly about the weather: Pyeongchang was colder than Seoul, it was agreed. At the luncheon proposed a toast, calling for peace and "mutual prosperity" for the two Koreas. He then recalled his past visit to the North's Diamond Mountain resort, where he and his mother met his North Korean aunt during a temporary reunion of families separated by the 1950-53 Korean War. After meeting with Moon, the North Korean delegates boarded a bullet train to Gangneung, a coastal city hosting some Olympic events. Later Saturday night, they all joined the chief of the International Olympic Committee to watch the debut of the inter-Korean team in the women's ice hockey tournament. The Koreans were crushed by Switzerland, 8-0. Pence's office didn't directly address Kim's invitation to Moon. "The vice president is grateful that President Moon reaffirmed his strong commitment to the global maximum pressure campaign and for his support for continued sanctions," Pence spokeswoman Alyssa Farah said when asked about the developments. There's worry, too, that the proposed summit in Pyongyang may come with preconditions. Annual general meeting of Narsingdi Diabetic Association held NARSINGDI: The 23rd annual general meeting of Narsingdi Diabetic Association (NDA) was held at Zonal Co-operative training institute in the town on Saturday, reports BSS. State Minister for water resources Lt. Col. (Retd) Muhammad Nazrul Islam, (Bir Protik), attended the function as the chief guest with Deputy Commissioner (DC) and President of NDA Dr. Shubash Chandra Biswas in the chair. Narsingdi Police Super and Vice president of the Diabetic Association Amena Begum BPM attended the GD-224/18 (8 x 4) meeting as the special guest while Vice President of the Association Abdul Moman Sarker delivered the welcome speech. The meeting was also addressed by Residential Medical Officer (RMO) of Narsingdi Zilla Hospital Dr Mijanur Rahman and General Secretary of the NDA Mohammad Nural Amin. The state minister in his speeches said Bangladesh already achieved laudable success in health sector. The present government led by Prime Minister Sheikh Hasina has been implementing massive programmes for further development in the health sector to ensure quality medi-care services for every citizen. The meeting was also addressed by Residential Medical Officer (RMO) of Narsingdi Zilla Hospital Dr Mijanur Rahman and General Secretary of the NDA Mohammad Nural Amin. He said diabetic patients should maintain disciplined life. They will have to take balanced food and conduct regular physical exercise for controlling the silent killer disease. Date : 11-02-2018
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