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Bangladesh approves 1.2mn tonnes oil import plan
BANGLADESH will buy 1.2 million tonnes of crude oil at a budgeted
$1.1 billion to meet its demand for 2008, a senior energy official said
A government purchase committee, headed by Finance Adviser A.B. Mirza
Azizul Islam, approved the purchase on Wednesday, the official said.
State-run Bangladesh Petroleum Corporation (BPC) and Jeddah-based
Islamic Development Bank will finance the import, 50 percent from Saudi
Arabia and the rest from the United Arab Emirates.
BPC annually imports up to 1.4 million tonnes of crude oil from the
two countries under state-to-state deals and refines it at the state-run
Eastern Refinery Limited. The official said they feared crude oil price
in 2008 might hover around $110 a barrel and could even be higher,
forcing additional costs on the importers.
"The annual import cost of oils by the BPC may exceed $3.0 billion
next year," the official said. BPC, the country's lone importer and
distributor, incurred losses of around 2.5 billion taka ($36.4 million)
each month for price differences between buying and selling due to
subsidies, he said.
The company raised domestic oil prices by up to 21 per cent in April,
but since then prices have risen by up to $33 a barrel. Bangladesh's
fuel imports rose 19 percent to $2.5 billion for the fiscal year to June
2007, due to higher oil prices in international markets.
Strong euro helps Chinese firms cope with US weakness
The euro's strength against the yuan is stirring trade tensions but
for small Chinese consumer goods makers it also offers a chance to shore
up sales as they struggle with rising costs and the weak US dollar.
In southeastern Zhejiang province, Zhejiang Enchant Cosmetic Co Ltd
expects 30 per cent growth in shipments to Europe this year, offsetting
flat sales to the United States. "The strong euro is giving Europeans
more purchasing power and we are targeting Europe for sales growth,"
says Ran Jing, a manager at the firm.
Since the yuan was revalued in July 2005, it has fallen about 11
percent against the euro .
That contrasts with its 9 percent rise against the dollar, which, on
top of mounting labour and raw material costs and cuts in export tax
rebates, is squeezing Chinese manufacturers' profit margins,
particularly in the highly competitive U.S. market.
The strength of the euro and the British pound helped boost China's
exports to Europe by 37 per cent in the first nine months of this year
to $176 billion, for the first time exceeding exports to the United
States, which grew 16 percent to $170 billion.
In October, China's trade surplus with the European Union hit $13.9
billion, nearing its $15.4 billion surplus with the United States.
Robust European business should help Chinese exporters withstand an
expected US slowdown, but it is also inflaming trade tension with the
Brussels is now joining Washington in calling for a stronger yuan to
address the trade imbalance and has taken the unprecedented step of
sending a high-level delegation to Beijing this week to press its case.
"Political pressure is building, from the United States and Europe,
and China will have to accelerate the pace of exchange rate
flexibility," Fred Hu, managing director of Goldman Sachs, told a
conference in Hong Kong this month.
As sales to Europe increase, the EU expects the continent's trade
deficit with China to jump nearly 30 percent this year, and the planned
lifting of EU textile quotas in 2008 will likely drive it even higher.
Beijing is resisting pressure for more rapid currency revaluation,
fearing it would destroy export jobs with dire social consequences.
However it has let the yuan rise faster since last month's Congress
of the ruling Communist Party and Prime Minister Wen Jiabao said on
Wednesday China would gradually make its currency more flexible. "It's
the biggest market in the world," said Yue Lian Hu, the company's vice
Philippine GDP growth slows in Q3
Philippine annual economic growth eased in the third quarter after a
sterling first six months, but was still on course for full-year
expansion of seven per cent, the highest in over 30 years, the
government said on Thursday.
The economy grew 6.6 per cent in the third quarter from a year
earlier, lower than the median forecast of 6.9 per cent in a Reuters
poll as weak exports weighed. In the second quarter, it grew 7.5 per
cent from a year earlier, a 20-year-high, and 7.1 per cent in the first
Unperturbed by the slowdown, the government said the Philippines was
still on course for its best economic performance since 1976.
"Easily we can reach seven per cent for the full year," Augusto
Santos, the government's economic planning chief, told reporters.
"Barring any sudden changes in the external environment, the economy
is set for further strong growth in the fourth quarter."
But economists cast doubt over an uptick in the final three months of
the year, undermining hopes for full-year expansion of seven percent as
high oil prices, weak exports and financial turmoil take a toll.
"High crude prices are seen pressuring growth in the fourth quarter,
and of course we still have to bear in mind that the risk of another
credit/liquidity squeeze looms," said Vishnu Varathan, economist with
Forecast Pte Ltd.
"On its own, that's not disappointing but given that countries such
as Malaysia, Indonesia and Singapore have delivered upside surprises in
Q3 results, it is somewhat of a disappointment."
Malaysia's economy grew 6.7 per cent in the third quarter from a year
ago, beating expectations for a 5.8 per cent jump while Indonesia rose
6.5 per cent in the July-Sept period from the previous year, ahead of
forecasts of 6.2 per cent.
The Philippines grew a seasonally adjusted 0.3 per cent in the third
quarter, slowing from the previous quarter's revised 1.8 percent growth.
Exports rose just 4.85 per cent in the first nine months of the year
over the same year-earlier period as U.S. demand for mobile phone chips
and microprocessors shrank.
South Korea to inject cash as bonds plunge
South Korea's central bank pledged on Thursday to inject 1.5 trillion
won into the bond market and the Finance Ministry vowed to put the
brakes on freefalling local bond prices, hit by a severe dollar funding
The move comes as a dollar shortage sharply widened the spread
between currency and interest rate swap rates, igniting a chain of
stop-loss sales and pushing the benchmark 5-year treasury bond yield to
a 5-year closing high on Wednesday.
December treasury bond futures trimmed losses, after having briefly
turned into positive territory, buoyed by the Bank of Korea's plan to
buy 1.5 trillion won ($1.61 billion) of treasury bonds from the market
"It is partly aimed at stabilising the bond market, although we can't
say exactly how effective it will be," said an official at the central
bank, which will use the purchased bonds as underlying assets for its
repurchase agreement deals.
Vice Finance Minister Kim Seok-dong also told a weekly news
conference authorities would take measures, including an extra cash
injection, if necessary to help markets regain stability.
Analysts said the cash injection itself would give only a limited
boost to the market suffering from a dollar shortage but would help
stability by showing that the authorities would not stand idly by.
"The most direct solution will be supplying more dollars into the FX
swaps market, but the central bank must be worried about any
counter-effect from its active intervention," said Ryu Seung-sun, an
economist at Mirae Asset Securities. "It doesn't mean that the won
injection would fail but the injection shows investors that the
authorities are no longer looking on with folded arms.
Joint Venture to promote FeliCa cards
Sony Corp said on Thursday that it and four other Japanese companies
would set up a joint venture to promote the use of FeliCa noncontact
cards, used for ticketing and electronic money transactions.
The joint venture, which includes trading house Mitsui & Co Ltd and
printing and electronics components company Dai Nippon Printing Co Ltd,
will be established in January with capitalisation of 400 million yen
($3.63 million). Sony will take a 60 per cent stake, it said.
Plastic cards equipped with Sony's FeliCa chips, which can be scanned
for data transfers, are widely used in Japan and other Asian countries
including China and Singapore.
Sony has shipped more than 250 million FeliCa chips since 1996. In
Japan, electronics makers put the chips in mobile phones, turning
handsets into e-wallets and e-tickets.
Other partners in the venture are Gourmet Navigator Inc, which has an
online restaurant guide, and Tanseisha Co Ltd, which designs displays
for commercial facilities. Shares of Sony were up 1.5 per cent to 6,030
yen at 0536 GMT, while Mitsui rose 3.7 per cent and Dai Nippon Printing
rose 2.7 per cent.
The benchmark Nikkei average was up 2.4 per cent.