Muchai increases gas pressure by 22pc

Financial Express, 26 July 2012

The Muchai compressor station at Bahubal Upazilla in Habigonj district installed by the Chevron Bangladesh Limited has boosted the capacity of pipeline system by 200 million square cubic feet extra gas to the national transmission line, the Petro-Bangla Chairman said.

The Muchai has increased pressure by 22 per cent up to 1100 pounds from previous 900 pounds per square inch into new gas turbine-driven compressors, 15,000 horsepower each.

According to Chevron Bangladesh Media Officer, high-pressure of gas compressed in the Muchai is returning into the pipeline system where it is flowing to the south at a rate of over 1.1 billion cubic feet per day and meeting up with its eager customers at Ashuganj, Dhaka and Western Bangladesh.

At the same time, there are opportunities for much bigger increases in the pipeline system capacity that will support further expansion of Chevron’s gas production, the Chevron media source said.

The media source said “We are especially excited by the GTCL’s plans to construct the new Bibiyana-Dhanua pipeline. GTCL is also moving forward with new compressor stations at Ashuganj and Elenga that will add capacity similar to Muchai”.

Chevron Bangladesh has now worked over 30 million hours since the last serious injury. That’s equivalent to one person working 15,000 years without a serious injury.

“Here at Muchai, we had a peak workforce of over 750 during construction without even a single minor injury. we are proud to have overcome the many challenges of implementing such a complex facility like Muchai while achieving startup only 25 months after construction began”, the Chevron official said.

Govt moves to ban formalin imports

Financial Express, 26 July 2012

The government is set to ban or restrict import of formalin into the country due to widespread use of the chemical in food items posing a serous threat to human health.

The Commerce Ministry has initiated the step aiming to either ban the chemical or restrict its use and sought necessary information about it from authorities concerned.

“We have written letters to different agencies including the National Board of Revenue (NBR), Bangladesh Council of Scientific and Industrial Research (BCSIR), the Controller of Import and Export to know details about essence of the chemical and quantity of import,” Abu Siddik Khondokar, Deputy Secretary, Commerce Ministry told the FE Wednesday.

“Unless it is essential for industrial and medical reasons, we will not allow import and sale of the ‘injurious to human health’ chemical,” Khondokar said.

He said the ministry had already held a meeting with officials concerned and will convene another meeting soon after getting necessary information on it.

Although the government operated mobile courts, fined and jailed people and supplied kits to identify adulteration, the use of formalin continues unabated.

A chemist at the BCSIR said formalin is a colourless and flammable chemical normally used in making particle boards and plywood, industrial fungicides, germicides, disinfectants and mortuaries. It is also used in medical laboratories.

Formalin was prohibited in several countries of the world. In Australia, Japan and countries of Europe, its use is banned in agriculture, the official said who is carrying out a study on it.

The first movement against formalin was in USA in 1987. America’s Environmental Protection Agency (EPA) declared it as a hazardous subject. Then the International Agency for Research on Cancer (IARC) classified formalin as a human carcinogenic. In other words, this chemical was identified as a cause for cancer, the official added.

The experts confirmed that this was a cause of cancer. Prof Dr Hossain Uddin Shekhar of the Biochemistry and Molecular Biology Department of Dhaka University says, “Formalin can affect the nose, mouth and throat.”

He says, “We have an immune system in our bodies which destroys many diseases, but if a chemical like formalin enters our bodies, it can send out wrong signals. It can lead to cancer, an uncontrolled growth of cells. So formalin can cause cancer, brain cancer and blood cancer.”

Prof Dr Khurshed Jahan, former Director of Dhaka University’s Institute of Nutrition and Food Science, says, “The liver is most likely to be affected by formalin. Liver controls the metabolising system and it can be afflicted with cancer. Formalin can also cause distended abdomens, lack of appetite, vomiting and such other symptoms.”

She says, “Expectant mothers and children are the most vulnerable when it comes to formalin. So unless the adulteration of food with formalin is halted immediately, our next generation will be an unhealthy generation.”

Prof Dr Munir Uddin Ahmed, former Chairman of the Clinical Pharmacy and Pharmacology Department, Dhaka University, says, “Whatever we eat goes through a chemical process of the metabolising system. It is a natural process. But formalin cannot be metabolised. Thus it can cause harm to human organs.”

Dr Golam Mowlah, PhD, Professor and Director General of Institute of Nutrition and Food Science, Dhaka University said, “The Good Manufacturing Procedure (GMP), which is usually used in manufacturing items, should also be used for food items and should be strictly followed as much as possible.”

“The Hazard Analysis Critical Control Point (HACCP) code which deals with maintaining microbial quality control should also be introduced to protect adulteration,” he added.

China economy to rebound in second half: IMF

AFP, 25 July 2012

China’s economy will rebound in the second half of 2012 to achieve annual growth of eight per cent as government policies to spur growth take effect, the International Monetary Fund said Wednesday.
‘Growth is expected to bottom out in the second quarter, and then accelerate in the second half of the year,’ the IMF said in an annual report on China’s economy, predicting China’s economy would expand by 8.5 per cent in 2013.
The Fund noted that Chinese authorities, whose views are included in the report, said they had been pursuing policies to achieve a more sustainable pace of economic growth.
‘This managed slowdown, however, has run into stronger-than-anticipated headwinds from the worsening of the euro area crisis,’ the IMF said.
‘Measures to support growth are now being given more prominence and the authorities are confident that growth will be at least 7.5 per cent this year.’

Oil up in Asia but eurozone fears cap gains

AFP, 25 July 2012

Oil rebounded from earlier losses in Asia Tuesday as investors picked up bargains but the underlying mood remained weak on concerns over the eurozone’s long-running debt crisis, analysts said.
New York’s main contract, light sweet crude for September delivery, gained 73 cents to $88.87 a barrel in afternoon trade and Brent North Sea crude for delivery in September was $1.10 higher at $104.36.
Investors are still worried over the eurozone’s ability to handle its debt crisis.
The Bank of Spain said the nation’s economy contracted 0.4 per cent in the second quarter, following a 0.3 per cent shrinkage in the first three months, citing the impact of the debt crisis on consumer spending and confidence.
Financial markets have turned against Madrid in recent weeks after an initially positive reaction to a massive 65-billion-euro ($53 billion) austerity package turned sour. Each new initiative has failed to hold the line.
The yield — the rate of return investors earn — on the benchmark Spanish 10-year government bond jumped to 7.498 per cent on Monday from 7.225 per cent on Friday.
The rate is well above the 7.0 per cent danger level for long-term funding and similar to those seen in Greece, Portugal and Ireland before they had to ask for a bailout.
‘Spain’s debt woes… had investors running.

SEC asks for investment information from 4 banks

New Age, 26 July 2012

The Security and Exchange Commission has asked four commercial banks to submit their stock market investment details after they published newspaper advertisements in the last few days announcing to investment Tk 1,200 crore in the market.
In separate letters the SEC on July 23 asked the banks to submit information about the names of brokerage houses which will handle their investment, whether the funds have already been submitted to any brokerage houses and in how many days the investment would be made.
The banks were instructed to provide the information by July 31.
The SEC in a statement on Tuesday asked companies not make any such investment decision public as such practice was out of securities law.
In the last few days, Pubali Bank announced to invest Tk 500 crore, National Bank Tk 300 crore and Exim Bank Tk 200 crore in the stock market.
The NCC Bank and Standard Bank also announced to invest Tk 100 crore each in the stock market.

BB decision may deepen liquidity crisis

New Age, 26 July 2012

Bangladesh Bank’s decision asking 25 non-primary dealer banks to hold 40 per cent of treasury bills and bonds on a mandatory basis would deepen liquidity crisis in the banking sector because of further increase in government’s bank borrowings, said bankers and economists.
The BB on Tuesday issued a circular to the commercial banks saying that from now on 60 per cent government T-bills and T-bonds would be disbursed among the primary dealer banks and 25 non-PD banks would hold rest of 40 per cent bills and bonds.
A BB official told New Age on Wednesday that the central bank took the decision virtually to ensure that the government could borrow more from the banking channel and the non-primary dealer banks could also take the burden along with the PD banks.
He said that the 12 PD banks had been facing an acute liquidity crisis for the last few months due to their large investment in the treasury bills and bonds to facilitate government borrowings.
BB data showed that the 15 primary dealer banks and NBFIs had an investment of Tk 22,550.76 crore in bonds and bills till April 2012 which was higher by 22.83 per cent, or to Tk 4,192.02 crore from that of December 31, 2011.
The government, on the other hand, projected to take Tk 23,000 crore from the banking sector this fiscal year.
The managing director of a commercial bank said that the liquidity situation and the profit condition of the non-PD banks might fall due to such decision of the central bank.
He said the highest interest rate on treasury bond was 12 per cent while the maximum interest rate on treasury bill is 11.25 per cent.
‘The rate on deposits is 12.5 per cent. If a non-PD bank buys government bonds with 11-12 per cent interest, its profit will definitely fall,’ he said.
For this reasons, the profit and liquidity conditions of the banks will decrease in the coming months, he added.
He said that liquidity support facility that the banks got from the BB against the T-bills was not adequate. ‘Banks get only 25 per cent of the demand they place for the liquidity support,’ he said.
The official said that although BB claimed that the decision was taken to ease the burden of PD banks, ultimately their burden might not be reduced because of excessive government borrowings.
Former BB governor Saleuddin Ahmed said that the government’s borrowing from the banking source would be expanded due to such type of decision.
He said the government had drastically borrowed from the banking source in the last financial year 2011-12.
The financial sector would fall into a harmful situation if the government continued borrowing from banks, he said.
In the present context, the invested treasury bills and bonds have turned into idle assets as the banks failed to resell the bills and bonds to individual persons or other institutions because of the absence of a secondary bond market.
He said, ‘The liquidity crisis in the banking sector may fall in a negative situation as more banks have been attached in this process.’
He, however, said the liquidity crisis in the PD banks would relax through implementing the BB decision, but the pressure on overall financial sector would not calm down.

NBR earnings rise 19pc, beat target

Daily Star, 26 July 2012

The National Board of Revenue exceeded its target of Tk 92,370 crore for the fiscal 2011-12, recording Tk 94,447 crore in tax receipts.

“We are happy that this is the third year we have registered higher than targeted revenue,” said NBR Chairman Dr Nasiruddin Ahmed at a press meet yesterday.

The revenue collection was 18.95 percent higher than previous fiscal year’s Tk 79,403.11 crore, Ahmed added, thanks to huge growth in value-added and income tax collection.

Over the past decade, NBR has been registering increased tax collection, allowing the government to reduce dependence on foreign finance.

The ratio of tax revenue to GDP, indicator of a country’s strength to finance its expenditures, increased to 10.32 percent in the fiscal 2011-12, from 8.3 percent of fiscal 2002-03’s, according to Bangladesh Economic Review.

“The rising tax collection indicates the dynamism of our economy. Our collection from domestic sources will increase in line with the economic growth,” said Ahmed.

VAT collection from domestic sources soared by 23 percent from previous fiscal year’s Tk 28,023 crore, to Tk 34,458 crore.

Income tax, too, rose by nearly 23 percent from a year ago to Tk 28,261 crore.

However, tax receipts from customs did not fare as well in the face of sluggish growth of international trade.

The NBR Chairman said the declining contribution of taxes from customs might be a trend given the liberalised global trading regime, therefore to counteract, efforts have been stepped up to augment collections from domestic sources.

“The impressive VAT receipts of the last two quarters of the past fiscal year are due to the increased efforts of the officials, such as intensive monitoring and stimulating mass awareness programmes” said the NBR chairman.

Over the past several years, the tax authority has been organising various events, such as VAT Day and income tax fair, to encourage people to pay taxes for the sake of country’s development.

This year, the income tax fair will be held on September 16-22 in Dhaka and large districts simultaneously.

Work is underway to make the tax administration process fully digital to curb tax evasion, he informed.

Digital facilities such as online tax payment and e-filing have already been introduced, the NBR chairman said, hopeful of attaining the 18 percent higher target of Tk 112,259 crore for the fiscal 2012-13.

“We are strengthening ADR (Alternative Dispute Resolution) system to settle tax-related disputes swiftly,” said Ahmed, adding that the mechanism has been introduced in all income tax zones and VAT commissionerates to boost collections.

Other steps the NBR is undertaking to meet the fiscal year’s target are: increase in manpower, increased monitoring of advanced income tax at source, strengthening audit and intelligence of Central Intelligence Cell to arrest tax-dodging.

Ahmed, also secretary of Internal Resources Division, said taxes on stamps have been raised in the current fiscal, which is expected to bring in over Tk 5,000 crore, doubling that of the past fiscal year.

SEC asks four banks to submit investment info

Daily Star, 26 July 2012

The Securities and Exchange Commission has asked four listed commercial banks to submit information on investment in the stockmarket that they announced through newspaper advertisements a few days ago.

The stockmarket regulator has sent four separate letters to the managing directors of the banks, instructing them to submit the information within July 31.

The banks will have to inform the market regulator whether the disclosed amount that is to be invested in the stockmarket has been deposited with the concerned stockbrokers and when the investment will be completed.

The SEC also directed the four banks to inform the regulator within seven days of completing their investment.

Earlier, Standard Bank, Pubali Bank, EXIM Bank and NCC Bank advertised that they would invest Tk 100 crore, Tk 500 crore, Tk 200 crore and Tk 100 crore respectively in the stockmarket in the next two months.

On July 24, SEC asked listed companies, including banks, to not put up unauthorised advertisements in print media to influence investment decisions.

The instruction came a few days after the four banks publicised their intention to invest, through advertisements and press releases.

As per SEC rules, listed companies are supposed to inform the regulator and the stock exchanges from beforehand their plans to broadcast information that might influence investment decisions.

The advertisements had an immediate positive impact on the market, with the benchmark index of the Dhaka bourse, DGEN, rising by more than 250 points in the last one week.

Dealer banks to shake off liquidity strains

Daily Star, 26 July 2012

Smaller banks are likely to be relieved of liquidity pressure with the central bank’s new rules to devolve investment in government securities to all banks from primary dealer (PD) banks alone.

Bangladesh Bank issued a circular on Tuesday introducing a new policy that says PD banks will have to receive 60 percent of the notified amount of investments in government treasury bills and bonds from earlier 100 percent.

The non-PD institutions must accept the remaining 40 percent, according to the circular to be effective from August 1.

“PD banks, especially smaller ones, were suffering a lot as they have to equally invest in government bills and bonds,” said Anis A Khan, managing director and chief executive officer of Mutual trust Bank Ltd.

Sonali Bank with about Tk 60,000 crore in deposits participates equally in the government investment tools with Mutual Trust Bank that has only one-tenth of Sonali’s deposits.

Like Mutual Trust Bank, NCC, Jamuna and Mercantile face limitations in commercial investments as a big portion of their money goes to government bills and bonds. But banks with a big deposit base, such as Sonali, Janata, Agrani and Prime, do not face the same pressure.

“Our profitability has gone down as we cannot lend enough because of a liquidity shortage,” said Khan. To cash in on the opportunity, he said some banks earned profits by lending in the call money market.

A senior treasury official at NCC Bank echoed Khan. “Our investable fund has shrunk due to our investment in government bills and bonds,” said the official, hailing the new policy. “It’ll help ease our liquidity pressure.”

The central bank’s latest move came against the backdrop of liquidity pressure on the commercial banks.

Of the 60 percent quota for the PD banks, they will have to underwrite 30 percent of it at the primary auction as per their Total Demand and Time Liabilities (TDTL), generally known as the size of their balance sheets.

The remaining 30 percent will be distributed equally among the 12 PD banks without any auction.

The cut-off price of the total notified amount will be fixed on the basis of primary auction, according to the central bank circular.

The other 40 percent of the notified amount of investments in government securities will be distributed, without any auction, among 25 non-PD banks as per their TDTL.

However, a treasury official of a non-PD bank said liquidity pressure on them might intensify due to the new rules.

The central bank has selected 15 PDs — 12 banks and three non-bank financial institutions — to deal with the government-approved securities in the secondary market.

Currently, three treasury bills (T-bills) — 91-day, 182-day and 364-day T-bills — are being transacted through auctions to adjust the government borrowing from the banking system. Four government bonds with five-year, 10-year, 15-year and 20-year tenures are also being traded in the market

Ford warns of deep Europe cuts as profits take hit

AFP, 25 July 2012

Ford Motor Company warned of major cuts to its European operations Wednesday as heavy losses there cut into the second largest US automaker’s profits.

Chief executive Alan Mulally said Europe’s troubles run deeper than the current economic crisis and cautioned that all automakers must address the region’s serious problems with overcapacity.

“This is a structural issue, not a cyclical issue. It’s not going to come back fast and we’re not going to be saved by volume,” Mulally said in a conference call discussing Ford’s second quarter results.

“I think you’re seeing the same viewpoint from most of the automotive companies.”

Ford’s second quarter profit fell by more than half to $1.0 billion following a $404 million loss in Europe.

It forecast that the troubled European unit will post a loss of $1 billion this year, dragging total profits significantly below the 20.2 billion Ford posted in 2011