17-01-2019

ECONOMY & BUSINESS
BANGLADESHTODAY 10
Rumee A Hossain, Chairman, Executive Committee of the Board, Bank Asia Ltd. inaugurated 49th Foundation Training
Course (FTC) for 42 Management Trainees of the Bank as Chief Guest Md. Arfan Ali, President & Managing Director and other
senior officials were present in the program held at Bank Asia Institute for Training & Development (BAITD) in Lalmatia,
Dhaka, yesterday.
Photo: Courtesy
Hundreds of flights axed as fresh
strike hits German airports
The coordinated industrial action
marks a major escalation in Verdi's
dispute with employers, following
previous walkouts at Berlin, Stuttgart,
Cologne/Bonn and Duesseldorf
airports
At least 220,000 travelers will be hit
by cancelations and delays
Germany's flagship carrier Lufthansa
accused Verdi of ramping up tensions
'to an unacceptable extent'
Hundreds of flights will be canceled
at eight German airports Tuesday,
including at the nation's busiest travel
hub Frankfurt, as security staff walk off
the job in a deepening row over pay.
Germany's powerful Verdi union said
the strike would last from 02:00 a.m.
until 8:00 p.m. at the airports of
Frankfurt, Munich, Hanover, Bremen,
Hamburg, Leipzig, Dresden and Erfurt.
At least 220,000 travelers will be hit
by cancelations and delays, the ADV
airport association said, in a calculation
that includes knock-on effects in other
airports.
Frankfurt airport operator Fraport,
which has axed 570 out of 1,200
scheduled flights, has urged passengers
not to come to Europe's fourth-busiest
airport during the strike hours.
The coordinated industrial action
marks a major escalation in Verdi's
dispute with employers, following
walkouts at Berlin's airports last
Monday and in Stuttgart,
Cologne/Bonn and Duesseldorf last
Golden opportunity'
exists for investment
in Saudi renewables
Saudi Arabia plans to
generate some 59
gigawatts (GW) of
electricity from solar and
The sun is shining on Saudi
Arabia's renewable energy
sector - with plans for
dozens of contracts over
the coming years posing a
"golden opportunity" for
investors, according to
delegates at the Abu Dhabi
Sustainability Week
(ADSW).
Speaking at the cleanenergy
conference, Saudi
Energy Minister Khalid Al-
Falih on Tuesday outlined
ambitious plans for solar
and wind power, as the
Kingdom plans to create "a
global hub of renewable
energy capability" over the
coming decades.
Saudi Arabia plans to
generate some 59
gigawatts (GW) of
electricity from solar and
wind by 2030, and
eventually produce upward
of 200 GW from renewable
sources, Al-Falih said,
according to AFP.
Under Saudi Arabia's
clean-energy program, Al-
Falih said Riyadh would
tender dozens of renewable
energy projects every year,
with at least 12 such deals
slated for 2019, it was
reported.
The news follows a string
of renewable-energy deals
struck by the Kingdom,
which last week signed a
deal to establish a 400-
megawatt (MW) wind
farm, following an
agreement last year to
build a 300-MW solar
plant.
On Monday, plans were
announced to develop a $2
billion solar and carbon
black integrated complex
in the heart of the
Kingdom.
The deal was struck
Thursday.
Germany's flagship carrier Lufthansa
accused Verdi of ramping up tensions
"to an unacceptable extent."
The ADV airport association blasted
the wave of strikes as "irresponsible."
"Verdi is unjustifiably carrying out
these strikes on the backs of travelers,
airlines and airports," ADV head Ralph
Beisel said in a statement.
Verdi, which represents some 23,000
aviation security workers, said it was
forced to ramp up pressure because
talks with the BDLS employers'
association were deadlocked.
"Employers did not respond to last
week's warning strikes at all, they
haven't come up with an improved
offer," Verdi board member Ute Kittel
told public broadcaster ZDF.
The union wants to see wages raised
to €20 ($23) per hour for workers
carrying out passenger, freight,
personnel and goods checks at all
German airports.
Rates currently vary nationwide, with
staff in some airports in eastern
Germany earning around €14 hourly,
compared with just over €17 for their
peers in the capital and western parts of
the country.
"Security is not worth less in the east,
and the employees are not worth less,"
said Kittel.
The BDLS has baulked at the
proposed wage hike, instead offering
pay bumps of up to 6.4 percent.
A Tokyo court on Tuesday rejected a request
by former Nissan chief Carlos Ghosn for bail
following fresh charges, dashing his hopes
for an early release from his Japanese jail
cell.
The decision means the 64-year-old auto
tycoon is likely to stay in custody until his
trial, which even his own defense lawyer has
admitted could take six months to begin.
The Tokyo District Court said in a
statement that "a request filed by lawyers for
his bail release was rejected today."
On Friday, prosecutors pressed formal
charges against Ghosn over two more
allegations of financial misconduct - all of
which the Franco-Brazilian-Lebanese
businessman denies.
In a dramatic courtroom appearance on
Tuesday, Ghosn denounced the allegations
against him, saying he had been "wrongly
accused and unfairly detained."
He has been indicted on two counts of
allegedly under-declaring his income by
more than nine billion yen ($83 million) in
total over eight fiscal years in documents to
shareholders.
Ghosn also stands charged with
"aggravated breach of trust" over a complex
alleged scheme in which he is said to have
tried to transfer foreign exchange losses to
Nissan's books. His ongoing detention has
prompted some international criticism of
The next round of talks is slated for
January 23.
Lufthansa, among the airlines worsthit
by the strikes, said Verdi "has no
interest in making its contribution to
improving Germany as an aviation
location."
"We already have the lowest quality
security checks at the highest costs,
compared to Europe and other
countries around the world," said
Lufthansa board member Detlef
Kayser.
The dispute is the latest upheaval for
air travelers in Germany, after a series
of strikes by Ryanair cabin and cockpit
crew in the second of half of 2018,
including two pan-European walkouts,
caused huge disruptions.
The union wants to see wages raised
to €20 ($23) per hour for workers
carrying out passenger, freight,
personnel and goods checks at all
German airports.
Rates currently vary nationwide, with
staff in some airports in eastern
Germany earning around €14 hourly,
compared with just over €17 for their
peers in the capital and western parts of
the country."Security is not worth less
in the east, and the employees are not
worth less," said Kittel.
The BDLS has baulked at the
proposed wage hike, instead offering
pay bumps of up to 6.4 percent.
The next round of talks is slated for
January 23.
Tokyo court denies ex-Nissan
chief Ghosn's bail request
Japan's legal system, which permits
prosecutors to hold suspects while they
investigate an allegation, and also allows
lengthy pre-trial detention once charges
have been filed.
Carole Ghosn, his wife, has alleged her
husband is being held in "harsh" conditions
and subjected to round-the-clock
interrogations intended to extract a
confession. In a letter to Human Rights
Watch, she sought to "press the government
to reform its draconian system of pretrial
detention and interrogation."
But deputy chief prosecutor Shin
Kukimoto has defended Japan's
investigative procedures, saying he had
anticipated overseas criticism.
"We expected various reactions since it is a
criminal investigation into a globally famous
person," he said."We are acting
appropriately in accordance with the existing
laws."However, some local media have
expressed understanding of the criticism
from overseas. The Asahi Shimbun daily said
in an editorial that the country "needs a
debate toward improvement" of its
controversial legal system.Ghosn's lawyer
has acknowledged his client is unlikely to be
freed before a trial, and that the case could
take six months to come to court given its
complexity and the need to translate
documents into Japanese and English.
Hamdard Laboratories (WAQF) Bangladesh arranged annual Sell
Conference-2018 which was held at Framgate Krishibid Institution
Bangladesh Complex.
Photo: Courtesy
Demand for oil
is strong, says
Saudi energy
minister
Saudi Arabia's Energy
Minister Khalid Al-Falih:
The global economy is
strong enough,
Saudi Arabia's Energy
Minister Khalid Al-Falih
said that oil demand
remains strong and that he
sees no impact from US-
China trade tensions.
"The global economy is
strong enough, I'm not too
concerned. If a slowdown
happens, it will be mild,
shallow and short," he told
reporters in Abu Dhabi on
Monday.
"The fundamentals of oil
demand are sufficiently
strong and the oil market
will not be impacted. On the
supply side, we are vigilant
to take appropriate
response if there is an
impact on demand."
Al-Falih said earlier that
the oil market was "on the
right track" and there was
no need for an
extraordinary OPEC
meeting before its next
planned gathering in April.
Oil prices tanked in the
last quarter of 2018 but
have since partially
recovered.
Brent prices slipped to
around $60 a barrel on
Monday after data showed
weakening imports and
exports in China, the
world's second-largest oil
consumer.
"The fundamentals of oil
demand are sufficiently
strong and the oil market
will not be impacted. On the
supply side, we are vigilant
to take appropriate
response if there is an
impact on demand."
World leaders are preparing to head to
the annual meeting of the World
Economic Forum (WEF) in Davos,
Switzerland, amid the riskiest global
backdrop in years, according to a report
from the event organizer itself.
As the WEF announced the names of
some of the 3,000 participants set to
attend the meeting and details of the
four-day agenda, it also
published a gloomy outlook
on international politics,
economics, the environment
and technology.
Rising geopolitical and
geo-economic tensions are
the most urgent risks in
2019, with 90 percent of
experts surveyed expecting
further economic
confrontation between
major powers, according to
the WEF's annual Global
Risks Report.
"The world's ability to
foster collective action in the face of
urgent major crises has reached crisis
levels, with worsening international
relations hindering action across a
growing array of serious challenges.
Meanwhile, a darkening economic
outlook, in part caused by geopolitical
tensions, looks set to further reduce the
potential for international cooperation
in 2019," it added.
Although political and economic
worries were top of the immediate
agenda for the 1,000 experts polled by
the WEF, the environment and climate
change are also a cause for concern, as
are "rapidly evolving" cyber and
technological threats, the WEF said.
THE
Oil prices rose 1 percent on Tuesday amid
supply cuts led by producer club OPEC and
Russia, although a darkening economic
outlook capped gains.
International Brent crude oil futures were at
$59.64 per barrel at 0257 GMT, up 65 cents, or
1.1 percent, from their last close.
US West Texas Intermediate (WTI) crude
futures were at $51.09 per barrel, up 58 cents,
or 1.2 percent.
"The impact of OPEC+ (OPEC and others
including Russia) cuts, Iran sanctions and
lower month-on-month growth in US
production should help to support oil prices
from current levels," US bank J.P. Morgan said
in a note.
The Middle East-dominated producer club
of the Organization of the Petroleum
Exporting Countries (OPEC) and some non-
OPEC allies, including Russia, agreed in late
2018 to cut supply to rein in a global glut.
Meanwhile, the US last November reimposed
sanctions against Iran's oil exports.
Although Washington granted sanctions
waivers to Iran's biggest oil customers, mostly
in Asia, the Middle Eastern country's exports
have plummeted since.
"Iranian exports have already fallen sharply
and are likely to remain at around 1.3 million
barrels per day (bpd) in 2019, 1.3 million bpd
down vs their 1H18 average," HSBC said in its
THuRSDAY, JANuARY 17, 2019
Oil rises 1% on supply cuts,
but economic slowdown
weighs on outlook
The German economy, Europe's largest, likely
recovered slightly in the fourth quarter of 2018,
avoiding a technical recession after negative
growth in the third quarter, national statistics
body Destatis said Tuesday.
"There were signs of a slight rebound at the
end of the year," Destatis expert Albert
Braakmann told reporters. The office will
release its preliminary fourth quarter growth
figure on February 14.
German output shrank by 0.2 percent from
July to September, dragged down by problems
in the crucial car sector.
Uncertainty about Brexit and weaker
Chinese growth as a result of US-led trade
tensions have further rattled nerves in exportreliant
Germany.
But many economists have been quick to
stress that Germany's underlying
fundamentals remain strong, powered by
healthy domestic demand.
"Even if it happens a technical recession
should not leave any marks on the labor market
but should be the very final wake-up call to step
up investments and structural reforms," said
ING Diba bank analyst Carsten Brzeski.
Economy Minister Peter Altmaier, who
expects German growth of around 1.5 percent
for 2018 compared with 2017's 2.2 percent, has
also rebuffed the doomsayers.
"Germany is not at the beginning of a
recession, even if there are unresolved
2019 oil market outlook.
While OPEC and Russia cut supply and Iran
is restrained by sanctions, crude oil production
in the US hit a record 11.7 million bpd late last
year.
The surging output increasingly allows US
oil producers to export crude, including to top
importer China.
Three cargoes of US crude are currently
heading to China from the US Gulf Coast, the
first departures since late September and a 90-
day pause in the two countries' trade war that
began last month.
The tankers are scheduled to arrive at
Chinese ports between late January and early
March, according to shipbrokers and vessel
tracking data.
Looming over oil and financial markets,
however, is an economic slowdown.
Tuesday's oil price increases came after
crude futures fell by more than 2 percent the
previous session, dragged down by weak
Chinese trade data which pointed to a global
economic slowdown.
"The outlook for the global economy
continues to be highly uncertain," HSBC said.
The bank said it had cut its average 2019
Brent crude oil price forecast by $16 per barrel,
to $64 per barrel, citing surging US production
and an "increasingly uncertain demand
backdrop."
German economy likely saw
'slight rebound' in the fourth
quarter: statistics body
Børge Brende, the WEF president,
said: "With global trade and economic
growth at risk in 2019, there is a more
urgent need than ever to renew the
architecture of international
cooperation. We simply do not have the
gunpowder to deal with the kind of
slowdown that current dynamics might
lead us toward. What we need now is
coordinated, concerted action to
sustain growth and to tackle the grave
threats facing our world today."
The leaders who will begin to arrive
in Switzerland in the next week include
Shinzo Abe, prime minister of Japan;
Jair Bolsonaro, president of Brazil;
Angela Merkel, chancellor of Germany;
and Wang Qishan, vice president of
China.
With US President Donald Trump
pulling out of the meeting to deal with
the partial government shutdown, the
American delegation is expected to be
led by Steven Mnuchin, Treasury
secretary, and Mike Pompeo, secretary
of state.
problems in international trade with Brexit and
the United States," Peter Altmaier told
Handelsblatt last week.
Europe's powerhouse "has a strong
reputation globally, the mood is good among
businesses and many order books are full," he
said.Altmaier, of Chancellor Angela Merkel's
center-right CDU, however acknowledged the
government could do more to give businesses
"a tailwind" at a time of sluggish global
expansion.
"It makes sense right now to set incentives
for growth," he said, including through "tax
relief for companies."
That puts him on a collision course with
Finance Minister Olaf Scholz of the center-left
Social Democrats, who has said he sees no need
for corporate tax cuts and recently warned that
"the fat years are over" when it comes to
Germany's run of tax revenues overshooting
expectations.
In 2017 federal, regional and municipal
governments took in €36.6 billion ($42 billion)
more than they spent, helped by record-low
unemployment, high wages and the European
Central Bank's ultra-low interest rates.
Germany, which also boasts a massive trade
surplus with the rest of the world, frequently
faces calls from abroad to spend more of the
proceeds of its wealth to encourage
consumption at home - which would indirectly
benefit trading partners.
World leaders prepare for Davos
amid gloomy forecasts
The Middle East is well represented
at the meeting, with at least nine heads
of state or government from the region,
including Palestine, Iraq, Egypt,
Jordan and Lebanon. Saudi Arabia will
be represented by a team of senior
policymakers and business leaders.
The risk report will give them all food
for thought in the Alpine resort.
Asking whether the world
is "sleepwalking into a
crisis," the report
responded: "Global risks are
intensifying but the
collective will to tackle them
appears to be lacking.
Instead, divisions are
hardening. The world's
move into a new phase of
strongly state-centered
politics continued
throughout 2018.
"The idea of 'taking back
control' - whether
domestically from political
rivals or externally from multilateral or
supranational organizations - resonates
across many countries and many
issues."
Macro-economic risks have moved
into sharper focus, it said.
"Financial market volatility increased
and the headwinds facing the global
economy intensified. The rate of global
growth appears to have peaked," the
report said, pointing to a slowdown in
growth forecasts for China as well as
high levels of global debt - at 225
percent of global gross domestic
product (GDP), significantly higher
than before the financial crisis 10 years
ago.