18-10-2018

ECONOMY & BUSINESS
BANGLADESHTODAY 10
THE
THURSDAY, OCTOBER 18, 2018
A school banking conference was held at Bagerhat Zila Parishad Auditorium under auspices of Islami
Bank Bangladesh Limited (IBBL) as lead bank on 13 October 2018 Saturday as part of Bangladesh
Bank's financial inclusion program. On this occasion, a procession led by Ashim Kumar Majumder,
General Manager of Bangladesh Bank, Khulna Office, also the chief guest of the conference and Abu
Reza Md. Yeahia, Deputy Managing Director of IBBL paraded the town. Md. Maksudur Rahman, Senior
Vice President and Head of Khulna Zone, IBBL, Mahatab Uddin, Officer In-charge of Bagerhat Model
Police Station and Rabiul Islam, Assistant Inspector of District Education Officer, Bagerhat attended
the conference as special guests. A H M Rafiqul Islam, Joint Director and Mohammed Atiqul Alam,
Deputy Director of Bangladesh Bank conducted session on financial education and school banking
activities. Md. Nazrul Islam, Deputy General Manager of Krishi Bank, Md. Mahmud Uddin, Assistant
General Manager of Sonali Bank, Manosh Kumar Pal, Assistant General Manager of Agrani Bank
addressed welcome speech. Md. Sadeque Ali, Head of Bagerhat Branch of IBBL, managers & representatives
of all scheduled banks in Bagerhat were present on the occasion. Students, teachers and
guardians from different schools and colleges of Bagerhat attended the conference. Photo: Courtesy
UK unemployment
rate holds at
43-year low
B r i t a i n ' s
unemployment rate
remained at 4.0 percent
in the three months to
August, the lowest point
since 1975, official data
showed Tuesday.
The jobless rate - the
proportion of the
workforce that is
unemployed -stood at the
same level in the three
months to July, the Office
for National Statistics said
in a statement.
The ONS also reported a
pick-up in wages growth
in upbeat economic data
published six months
before Britain is due to
leave the European
Union.
Average earnings
excluding bonuses grew
3.1 percent in the three
months to August
compared with a year
earlier.
That was the best level
since January 2009 when
the UK economy was
emerging from the
wreckage of the global
financial crisis.
Including bonuses,
wages increased by 2.7
percent in the year to
August.
Philip Smeaton, chief
investment officer at
Sanlam, argued that
employers were having to
increase salaries to
compete and recruit staff.
"Wages keep on going
from strength to strength,
as competition for
workers is finally feeding
through to pay," said
Smeaton.
"The Bank of England
will be keeping a watchful
eye on any upwards
pressure this puts on
inflation.
"However, until the
outcome of Brexit
becomes clearer,
(interest) rates are likely
to be placed on hold."
Tokyo shares rise after
Wall Street rally
Tokyo stocks ended higher
on Wednesday with investor
sentiment boosted by robust
corporate earnings that
triggered a rally on Wall
Street and lifted shares in
Asia.
The benchmark Nikkei
225 index rose 1.29 percent
or 291.88 points to 22,841.12
while the broader Topix
index added 1.54 percent or
25.96 points at 1,713.87.
Market sentiment
brightened across Asia, after
US and European shares
extended gains on a wide
range of factors including
solid US business earnings,
an apparent fading of
tensions between Italy and
the EU over Rome's
spending, and hopes that
Brexit talks may see some
progress.
Tokyo players also
embraced the dollar's
renewed strength.
Exchange rates sour Danone's
sales, but not target
Danone said Wednesday its
sales slid 4.4 percent in the
third quarter due to the
plunge in the value of
emerging market currencies,
although the French food
giant confirmed its annual
target of double-digit
earnings growth.
The sales figure of 6.2
billion euros ($7.2 billion)
was impacted by the
appreciation of the euro
compared to Argentina's
peso, Turkey's lira and
Brazil's real, all of which fell
by more than 20 percent.
When sales in those
countries were converted into
euros for global accounting,
they were considerably lower
The US unit kept its
ground at 112.25 yen in
Tokyo after reaching 112.26
in New York, higher than
111.95 yen seen at the start of
the week. "Investors cheered
gains of US shares on the
back of robust corporate
earnings, as well as the
relative stability of US bond
yields," Okasan Online
Securities said in a note.
"The Nikkei index began
the day with buy orders
leading the way. The
dollar hovered just above
the 112-yen mark. The yen's
down swing also brightened
the sentiment," the
brokerage said. Strong gains
of US tech issues drove up
Tokyo-based IT shares.
IT investor SoftBank
Group added 2.13 percent to
9,790 yen, partly on news
that Uber was aiming at a
valuation above $100 billion
for its share offering.
than in the same quarter last
year, dragging down the
figure by an estimated 5.2
percentage points.
When the sales were
restated at constant exchange
rates, they grew by 1.4
percent.
Only the dairy and plantbased
unit in North America
saw sales growth at current
exchange rates, rising 1.4
percent to nearly 1.3 billion
euros. Elsewhere, they fell by
8.1 percent.
On a like-for-like basis, the
waters unit showed 6.4
percent growth, but its
specialised nutrition unit still
recorded a 1.5 percent
contraction.
Softbank has a 15-percent
stake in the ridesharing
service.
Softbank stock had taken a
hammering in recent days
due to the firm's links to
Saudi Arabia, which is under
intense international
scrutiny after a journalist
disappeared from its
consulate in Istanbul.
Sony jumped 2.23 percent
to 6,498 yen. Panasonic rose
1.26 percent to 1,250.5 yen.
Toyota gained 1.38 percent
at 6,612 yen while Sumitomo
Mitsui Financial Group
added 1.84 percent to 4,481
yen.
FujiFilm, which rose 1.66
percent to 4,890 yen,
announced that a US court
lifted an injunction that had
stopped the firm's merger
talks with US printer maker
Xerox. The Japanese firm
plans to continue the
discussion.
However, chief executive
Emmanuel Faber said in a
statement the company has
"the foundations in place to
navigate current emerging
market volatility and
currency headwinds, which
will enable us to continue to
deliver sustainable profitable
growth. The company
reaffirmed its guidance for
the full year, which is doubledigit
recurring earnings per
share using constant
exchange rates.
The company's share price
dropped 2.0 percent in early
morning trading in Paris, the
worst performer on the CAC
40, which was up nearly 0.3
percent overall.
Uber eyes valuation topping
$100b in IPO: sources
Uber is eyeing a valuation above
$100 billion for its much-anticipated
share offering due in 2019, which
would be the biggest-ever in the tech
sector, sources familiar with the plan
said Tuesday.
The sources told AFP the global
ridesharing giant is considering
speeding up its plans for an initial
public offering (IPO) to the first half of
2019, rather than the second half of
the year.
Uber, which operates in over 60
countries, is already the largest of the
venture-backed "unicorns" valued at
more than $1 billion, which until
recently was considered rare without
tapping stock markets.
Its most recent investment - a $500
million injection from Japanese auto
giant Toyota - was made at a reported
valuation of $72 billion.
Earlier Tuesday, the Wall Street
Journal reported that bankers were
proposing a valuation as high as $120
billion for Uber, which has been a
disruptive force in many cities where
regulators and taxi operators have
challenged its business model.
Uber offered no comment on the
IPO plans.
Sources told AFP the timing of the
IPO will depend on market conditions
and that Uber was in talks with
Goldman Sachs and Morgan Stanley
to be lead underwriters. The two firms
declined comment.
Uber is due to make a market debut
by the end of 2019 as part of an
investment deal with Japan's
SoftBank, which has a stake of some
15 percent.
The ridesharing group last year
hired a new chief executive, Dara
Khosrowshahi, who has vowed to
fix the company's work culture and
business
practices after a series of missteps
and scandals over executive
misconduct,
a toxic work atmosphere and
potentially unethical competitive
practices.
Under Khosrowshahi, Uber has
moved to boost transparency and
become more accountable. Last
month, it settle an investigation into a
2016 data breach with a payment of
$148 million, and earlier this year
reached a settled with former Google
car unit Waymo over allegedly stolen
trade secrets.
Uber reported a loss of $891 million
in the second quarter as revenues
jumped 63 percent to $2.8 billion,
with bookings hitting $12 billion.
As it expands its ridesharing
services, Uber is also seeking to
become a major player in
autonomous cars, and has agreed to
buy and adapt vehicles from Volvo to
begin operating self-driving taxis.
UCB Ltd opens
180th Branch
at Shyamoli,
Dhaka
The 180th Branch of
United Commercial Bank
Limited at Shyamoli, Dhaka
was opened on 17 October,
2018. Saifuzzaman
Chowdhury MP, State
Minister, Ministry of Land,
People's Republic of
Bangladesh inaugurated the
branch as Chief Guest.
Director of UCB Bazal
Ahmed was also present as
Special Guest.
Among others Managing
Director (Acting) of UCB
Mohammed Shawkat Jamil;
Additional Managing
Director of UCB Arif
Quadri, Additional
Managing Director of UCB
Mohammad Mamdudur
Rashid, Deputy Managing
Director of UCB Md.
Sohrab Mustafa, Deputy
Managing Director of UCB
Nabil Mustafizur Rahman,
Deputy Managing Director
of UCB Abul Alam Ferdous,
Deputy Managing Director
of UCB N. Mustafa Tarek
and Deputy Managing
Director of UCB Md.
Abdullah Al Mamoon along
with other senior officials of
United Commercial Bank
Limited were present at the
Branch opening ceremony.
Moreover
local
distinguished personalities
also graced the event with
their presence.
Asian markets stage
rally after strong
Wall St lead
Asian markets staged a
much-needed rally
Wednesday as investors
tracked Wall Street's best
performance in more than
six months thanks to a
healthy round of earnings
reports.
Bargain-buyers took
advantage of the strong
readings from some of the
world's top firms to step back
into the mix, with a dip in US
Treasury yields and
W a s h i n g t o n ' s
announcement of trade talks
with Japan, the EU and
Britain helping sentiment.
The news helped distract
from long-running worries
about the US-China trade
war which shows no sign of
abating.
Investors are now awaiting
the release later in the day of
minutes from the Federal
Reserve's most recent policy
meeting, hoping for some
insight into its plans for
interest rates in light of fresh
strong data on the US
economy.
All three main indexes in
New York piled on more than
two percent Tuesday, the
best daily performance since
March, in response to a
string of positive results from
the likes of Netflix, Goldman
Sachs, Johnson & Johnson
and UnitedHealth Group.
And the gains filtered
through to Asia, where Tokyo
ended 1.3 percent higher
thanks to a pick-up in the
dollar against the yen, while
Shanghai gained 0.6 percent.
Sydney, Seoul, Singapore,
Wellington and Manila each
put on more than one
percent.
Hong Kong was closed for
a public holiday.
In early European trade
London rose 0.4 percent,
while Frankfurt and Paris
both added 0.3 percent.
"The earnings that came
through overnight definitely
is something the market has
been waiting for to really
change the sentiment," IG
Asia market strategist Jingyi
Pan told Bloomberg TV.
Dollar dips -
But Stephen Innes, head of
Asia-Pacific trade at OANDA,
said: "Perhaps a bit
surprising is that local equity
markets are not exactly
knocking it out of the park
this morning.
"I suspected they would
take their lead from the US
equity froth. But again, local
dealers remain a better seller
of risk until a definitive shift
in US-China trade tensions is
offered up."
On currency markets the
dollar was down against
most high-yield and
emerging market economies
as traders came out of their
shells after recent selling.
Ray Attrill, head of forex
strategy at National Australia
Bank, suggested US
President Donald Trump's
latest outburst against the
Fed's rate hikes, which he
claims are excessive, were
weighing on the dollar.
"While such name calling
shouldn't mean anything in
terms of what the Fed
actually does, it is a factor
which
somewhat
undermines sentiment
towards the dollar," he said.
"We'd argue, (it) is a
contributory factor, albeit
minor, to recent poor
performance of the US dollar
in the face of first higher US
yields, then last week's sharp
turn for the worse in US
equity market."
Saifuzzaman Chowdhury MP, State Minister, Ministry of Land, People's Republic of Bangladesh is
inaugurating the 180th Branch of UCB at Shyamoli, Dhaka. Bazal Ahmed, Director of UCB and
Mohammed Shawkat Jamil, Managing Director (Acting) of UCB were also present along with other senior
officials of the Bank.
Photo: Courtesy
Trump calls
Federal
Reserve his
'biggest
threat'
President Donald Trump
reignited his controversial
criticism of the central bank
Tuesday, calling the Federal
Reserve his "biggest threat."
Trump followed up
previous strong attacks on
the Fed by complaining
again that interest rates are
rising too quickly.
"My biggest threat is the
Fed, because the Fed is
raising rates too fast," he
told Fox Business television.
Trump acknowledged that
the central bank is
independent, "so I don't
speak to them," but then
leveled direct criticism at
Fed Chairman Jerome
Powell, who he said should
be slower on interest rate
rises.
"It's going too fast, because
you look at the last inflation
numbers -they're very low,"
he said.
Trump appointed Powell
but told Fox, "maybe it's
right, maybe it's wrong."
"There are a lot of other
people there I'm not so
happy with," he said.
The Fed has raised interest
rates three times this year as
it seeks to prevent a vibrant
economy from overheating.
US presidents usually
remain silent on such issues
in respect toward the Fed's
independence. Trump has
previously called Fed
policies "crazy."
China's RRR cut to increase
support for real economy :
Economic Watch
China's central bank has
lowered the level of cash
that lenders must hold as
reserves for the fourth time
this year in its latest effort to
support stable credit growth
and shore up the economy.
Effective Monday, the
reserve requirement ratio
(RRR) was reduced by 1
percentage point, according
to the People's Bank of
China (PBOC).
Part of the liquidity
unleashed, worth around
450 billion yuan (around 65
billion U.S. dollars), was
used to pay back the
medium-term lending
facility maturing Monday,
while the other 750 billion
yuan would be pumped into
the market, the PBOC said
in a statement.
Compared with previous
cuts in January, April, and
June, Monday's move is
bigger in terms of the
amount of money
unleashed for lenders, said
Zou Hengchao with China
Merchants Securities.
The primary goal is to step
up capital support for the
real economy and stabilize
economic growth and
market expectations,
analysts said.
It also came as part of a
government campaign to
ease financing strains for
cash-starved small- and
medium-sized enterprises
(SMEs) which have been
affected by a domestic
clean-up in the financial
sector and escalated trade
friction.
"The RRR cut has
provided cheaper and
stable long-term funding
for banks, and we think it
could help stabilize broad
credit growth," said a
research note from Morgan
Stanley.
The investment bank's
chief China economist
Robin Xing said the total
social financing (TSF) has
shown signs of stabilization,
the growth of new loans
have picked up the pace,
and bill financing has
returned to the positive
territory. "Better lending to
SMEs could support exportoriented
enterprises."
The cost of funds is
retreating. The overnight
Shanghai Interbank Offered
Rate, which measures the
cost at which banks lend to
one another, fell 0.4 basis
points to 2.373 percent
Tuesday, significantly down
from five-day, 10-day, and
20-day averages.
Analysts agreed that the
funds directed into the
economy will not boost the
property sector, which
usually rallies on such progrowth
policies, as home
purchase restrictions still
bite, and the impact on the
Chinese yuan, which is
under a weakening trend,
will also be limited.
China has reduced the
RRR for banks by 2.5
percentage points year to
date, and further moves are
on the cards, which,
however, does not mean a
shift in China's stance on its
monetary policy.
PBOC governor Yi Gang
on Sunday said the
monetary policy
maintained prudent and
neutral, neither too loose
nor too tight, at the G30
International Banking
Seminar 2018, responding
to concerns that credit
supply is being eased.
The broad money supply
growth was well-matched
by nominal GDP growth,
and the TSF expanded at an
a r o u n d - 1 0 - p e r c e n t
reasonable pace, Yi said,
adding that the country still
has plenty of policy tools.
China's policymakers
have carried out a raft of
measures to ensure the
economy could hold steady
against increasing global
uncertainties, while also
striving for progress in
areas including industrial
restructuring and financial
deleveraging.
The economy has shown
strong resilience with
steady factory activity and
robust consumption.