08-03-2018

ECONOMY & BUSINESS
THURSDAy,
THE
BANGLADESHTODAY
MARCH 8, 2018
10
The Monthly Business Review Meeting of Al-Arafah Islami Bank Ltd. held on 7 March 2018 at the Head Office of the Bank.
Chairman of the Bank Abdus Samad Labu inaugurated the conference as Chief Guest. Managing Director Md. Habibur Rahman
Presided over the meeting. Deputy Managing Directors Kazi Towhidul Alam, Md. Fazlul Karim, Muhammad Mahmoodul Haque
and S. M. Jaffar were present in the conference. Head Office Executives, Zonal Heads and Managers form selected branches
participated in the meeting.
Photo : Courtesy
China's manufacturing dev to
create more jobs worldwide
A number of countries have claimed that
China has been stealing manufacturing jobs
from them, but the facts tell a different story-
China is creating jobs for them.
Logically speaking, neither China nor any
country else can "steal" jobs from the other
countries, since each country creates its own
job opportunities for its citizens basing on its
economic development level.
China always abides by international trade
rules, no matter when it was economically
underdeveloped or now that it has grown
stronger. It has chosen to work with trade
partners to seek win-win results. As Chinese
manufacturing enterprises expand their
global presence, they hire more and more
local employees.
As a case in point, Fuyao Group, China's
leading manufacturer of automotive glass, had
employed more than 2,000 people at a near-
470,000-square-meter glass fabrication
factory in Moraine, Ohio, by November 2017.
The Fuyao facility, the largest Chinese
investment project in Ohio's history, has
been widely hailed as a silver lining for the
local community, as the closure of General
Motor's assembly plant in 2008 wiped out
thousands of jobs.
With Fuyao's further expansion in the
United States, the company expects the
employment number to grow by thousands.
Chinese companies invested over 20 billion
dollars in the nine U.S. states in the midwest
region as of 2016, creating over 45,000 jobs,
according to China General Chamber of
Commerce-U.S.A.
In Latin America, Chinese enterprises
created 1.8 million jobs between 1995 and
2016, according to data from the International
Labor Organization. The investment in sectors
like food, communication, and renewable
energy helped improve local infrastructure
and consumption.
Through the Belt and Road Initiative
proposed in 2013, China was adding jobs to
Asian, European and African countries along
the routes, while promoting infrastructure,
trade, financial and people-to-people
connectivity along and beyond the ancient Silk
Road trade routes.
Under the Initiative, Chinese enterprises
have invested roughly 50 billion U.S. dollars
and helped build 75 economic and trade
cooperation zones in 24 countries, generating
over 209,000 jobs by October 2017, according
to the Ministry of Commerce.
Exxon CEO struggles
to reverse Tillerson's
legacy of failed bets
Exxon Mobil Corp's (XOM.N) $200
million write-down last month on
abandoned ventures in Russia - once its
next big frontier - points to challenges
facing Chief Executive Darren Woods in
his second year leading the world's
largest publicly traded oil producer.
Some of the biggest bets taken by his
predecessor Rex Tillerson, now the U.S.
secretary of state, have resulted in
billions of dollars in write-downs amid
falling production and a stock price that
has long lagged peers.
That leaves Woods facing the prospect
of slow growth and billions of dollars in
new spending that could weigh on
results for years. In 2018, the company
plans capital spending of about $24
billion - up about a quarter since 2016 -
suggesting return on capital will get
worse before it gets better as the firm
waits for a payoff from new exploration
under Woods.
Rivals including Royal Dutch Shell
(RDSa.L) and Chevron (CVX.N), by
contrast, have capped or cut their
spending after finishing expansion
projects.
Exxon shares are down 18 percent
since Woods took over in January 2017.
Shell is up 2 percent and Chevron is
down about 3 percent during the same
period.
Woods is feeling the heat from
investors who could have made more if
they held shares in Exxon's rivals, as
well as activist investors who want to see
the company take renewable energy
more seriously. Analysts are pushing for
more transparency on operations, and
some have called for Woods to sell
assets.
European
stock markets
drop at open
European stock markets
dropped at the open on
Wednesday following
losses in Asia, which
came after the
resignation of US
President Donald
Trump's top economic
advisor.
London's benchmark
FTSE 100 index fell 0.4
percent to 7,117.49 points
compared with the
closing level on Tuesday.
In the eurozone,
Frankfurt's DAX 30 shed
0.4 percent to 12,060.09
points the Paris CAC 40
lost 0.4 percent to
5,151.69.
Hong Kong
stocks hit as
trade fears trump
N. Korea hope
Hong Kong stocks
tumbled on Wednesday
as the early boost from
North Korea's offer of
denuclearisation talks
were overshadowed by
fears of a global trade war
after Donald Trump's top
economics advisor
resigned.
The Hang Seng Index
dived 1.03 percent, or
313.81 points, to end at
30,196.92. The
benchmark Shanghai
Composite Index lost 0.55
percent, or 17.97 points, to
3,271.67 and the Shenzhen
Composite Index, which
tracks stocks on China's
second exchange, fell 0.77
percent, or 14.35 points, to
1,837.87.
EU's Tusk to lay down Brexit
trade red lines
European Union President Donald
Tusk will on Wednesday unveil
draft guidelines for future ties with
Britain, which are expected to warn
London it cannot have completely
free trade after Brexit.
Days after British Prime Minister
Theresa May made a long-awaited
speech setting out London's terms,
Tusk will present his plans at a
press conference with Luxembourg
premier Xavier Bettel.
The leaders of the remaining 27
EU states must then approve the
guidelines at a Brussels summit on
March 22, setting the template for
EU negotiator Michel Barnier in
trade talks that could start as soon
as April.
Tusk warned last week that
Britain's self-imposed conditions
for leaving the European Unionthat
it must quit the single market
and customs union-made
"frictionless" trade impossible.
"Everyone must be aware that the
UK red lines will also determine the
shape of our future relationship,"
Tusk said, adding that the EU
viewed Britain's restrictions
"without enthusiasm and without
satisfaction".
"I want to stress one thing clearly.
There can be no frictionless trade
outside of the customs union and
the single market. Friction is an
inevitable side effect of Brexit, by
nature," the former Polish premier
added.
May used her speech last week to
call for a wide-ranging free-trade
deal with the EU, while
acknowledging it was time to face
"hard facts" about the economic
consequences of Britain's shock
2016 vote to leave.
She said she wanted the "broadest
and deepest possible agreement,
covering more sectors and cooperating
more fully than any free
trade agreement anywhere in the
world today".
But the remaining 27 EU
countries have vowed to resist all
British attempts at "cherrypicking"-getting
special treatment
for Britain's financial services and
car industries-without the
obligations and costs of
membership.
A political declaration on future
relations will be attached to the
Brexit divorce agreement between
Britain and the EU, which Barnier
wants in place by November at the
latest.
Any actual trade deal will have to
wait until after Brexit day on March
29, 2019.
The EU's free trade agreements
with Canada, South Korea and
Japan are the most likely model,
Barnier said.
But huge hurdles lie ahead.
The Brexit withdrawal treaty is
itself mired in difficulties, with
London saying the EU's official
legal text of the preliminary divorce
agreement they made in December
makes unacceptable demands on
the Irish border.
Barnier meanwhile warned that a
planned post-Brexit transition
period lasting until the end of 2020
-- which leaders had been expected
to approve at the March summitwas
also at risk due to
disagreements with London.
Britain would follow EU law
during the transition in exchange
for access to the single market,
although losing its decision making
powers.
Islami Bank Bangladesh Limited inaugurated its Agent banking outlet at College Gate Sohag
Shopping Complex of Shibpur Upazila, Narsingdi on Monday, 5 March 2018. Md. Harunur Rashid
Khan, former Chairman, Shibpur Upazila was present in the program as Chief Guest while Md.
Shamsuzzaman, Additional Managing Director of the Bank as Guest of Honor. Presided over by
Dr. M Kamal Uddin Jasim, Senior Vice President and Head of Dhaka East Zone Shamsul Alam
Bhuiyan Rakhil, Social Worker and Nur Uddin Mohammad Alamgir, Headmaster, Shibpur Model
Pilot High School were present as Special Guests. Md. Nasir Uddin, First Assistant Vice President
and Head of Monohordi Branch addressed the welcome speech.Quazi Ismail Hossain Pavel,
Senior Principal Officer of the Bank along with Businesspersons, Professionals and social elites
were present on the occasion.
Photo : Courtesy
Asian markets swing as Trump trade
worries offset North Korea hopes
Asian markets and the dollar were jolted
Wednesday as news that Donald
Trump's top economics adviser had
resigned revived trade war fears, while
early excitement at North Korea's
denuclearisation talks offer fizzled out.
Investors already on edge over expected
US interest rate rises have been rattled
further since the US president last week
unveiled plans for controversial tariffs on
steel and aluminium imports as part of his
"America First" agenda.
Equities initially plunged on Thursday's
announcement, which has been condemned
by business leaders and foreign
governments, before rebounding this week
as dealers bet that the final measures would
not be as bad as initially thought.
However, analysts said news that Gary
Cohn-who had fought against the tariffshad
stepped down could leave the field
open for protectionist hawks to dictate
policy, ramping up the chances of a
global trade war.
"His resignation increased the risk
tenfold that President Trump will follow
through with far-reaching trade tariffs
given that Cohn was said to be
remaining in his role to convince Trump
to reverse his trade policy views, or at
least temper them," said Stephen Innes,
head of Asia-Pacific trading at OANDA.
"While the world appears to be in a safer
place this morning due to the
denuclearisation olive branch offered by
North Korea, the market is no less safe
from the wrath of Trump's trade policies."
US bond yields sank as traders rushed
into safe assets, with the dollar falling
against its major peers as well as highyielding
currencies as traders bet that
any trade war would hurt the US unit.
"Policy uncertainty has underpinned a
lot of the market's recent volatility,"
Stephen Wood, chief market strategist for
North America at Russell Investments in
New York, told Bloomberg News.
"This speaks to the instability. He's
(Cohn) an advocate for free-trade policy
so there would be expectation that
protectionist voices would be more
representative in the administration."
Regional equities swung through the
morning, with sentiment improved by
Pyongyang's olive branch to South
Korea and the US-saying it was open to
discussing its nuclear programme.
Seoul announced the two Koreas
would hold a historic summit next
month-and that the North's leader Kim
Jong Un was ready to suspend
provocative missile and nuclear tests
while sitting down for dialogue.
Trump, who has said the US would not
talk unless Kim was prepared to give up his
weapons, welcomed the breakthrough offer.
"It's important for markets for a
number of reasons," said Greg
McKenna, chief market strategist at
AxiTrader. "It reduces a point of tensions
between the US and China and could
lead to more... cooperation as President
Trump seeks to rebalance the US-China
trade deficit."
However, investors were unable to
maintain the positive momentum and
Seoul reversed its morning course to end
0.4 percent down, though the won held
its gains.
Tokyo closed down 0.8 percent, with
Kobe Steel plunging 7.4 percent a day
after its CEO resigned-leaving no
successor-after the firm revealed
widespread submission of false strength
and quality data for products shipped to
hundreds of clients worldwide.
Hong Kong shed one percent in the
afternoon and Shanghai closed down
0.6 percent, with Taipei 0.4 percent off.
Sydney dropped one percent as data
showed Australia's economic growth
slowed in the final three months of last
year and missed expectations. Singapore
also shed one percent, while Bangkok,
Jakarta and Mumbai tumbled.
Canada, Mexico exempt from tariffs
once NAFTA deal signed: US official
Canada and Mexico will be exempt from the
steel and aluminum tariffs President
Donald Trump will unveil this week once a
new North American Free Trade
Agreement is reached, US Treasury
Secretary Steven Mnuchin said Tuesday.
Acknowledging the fears that Trump's
surprise announcement last week could
spark a trade war, Mnuchin also hinted that
the final implementation may address
some of the issues.
In testimony before a House
appropriations subcommittee, the Treasury
secretary said he has been in contact with
his counterparts on the specifics of the tariff
proposals and "we're trying to deal with this
on a case by case basis."
The president "does understand the
potential impact it has on the economy, and
I think we have a way of managing through
this."
Trump last week announced that he
would be imposing tariffs of 25 percent on
all imported steel and 10 percent on
aluminum to protect domestic industries,
citing a rarely-invoked national security
section of US trade law.
That sparked global outrage and threats
of retaliation, including from the European
Union, and NAFTA-partner Canada which
has the most to lose as the main provider of
steel to the US market.
Trump said he would not back down,
even for the closest US neighbors, unless
and until a deal to revamp NAFTA that is
"fair" for US business and workers was
signed.
Many observers read that as a softening
of his stance to have no exemptions, and
that sent global financial markets roaring
back Tuesday.
Mnuchin was even more definitive saying
that with Canada and Mexico "our objective
is to have a new NAFTA and once we do
that-which I'm cautiously optimistic on-the
tariffs won't apply to them."