Business & Finance News

Sunday, August 08, 2004

Compiled by SDNP

Head Lines


Non-government teachers miss govt. benefits for 2 months



The government has not disbursed salary benefits among about 2.5 lakh non-government teachers for the last two months to their utter misery.

The non-government teachers did not get the benefits for the months of June and July. They get 95 percent salary benefits from the government exchequer.

"Many teachers in the flood-hit areas are living an inhuman life," Prof MA Bari, general secretary of Bangladesh College-University Teachers Association (BCUTA), told The Daily Star yesterday.

The government usually disburses funds for the non-government teachers by the first week of a month but the teachers did not get salary benefits of June and July even in the first week of August.

The BCUTA in a statement has urged the government to disburse the benefits immediately.

When contacted, Education Secretary Faruq Ahmad Siddiqi said the delay occurred due to the end of the fiscal year.

"Orders in this regard have been issued and the teachers are expected to get their salaries in two days," he added.

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Private fish sector loses Tk 990cr in floods



The flooding has damaged fish resources of 1.66-lakh acre water bodies in the private sector worth Tk 990.78 crore, the rehabilitation of which depends on the government aid, sources in the Department of Fisheries said.

The floods have washed away about 120.44 crore fries and 63,493 tonnes of fish worth Tk 295.12 crore from ponds and canals at the private sector in 43 districts. The loss of water body infrastructures is yet to be measured.

The Chittagong division witnessed the highest loss of Tk 118.87 crore, Dhaka Tk 102.01 crore, Rajshahi Tk 25.46 crore, Sylhet Tk 46.41 crore, Barisal Tk 2.30 crore and Khulna 0.7 crore.

Fisheries department officials said the washed-away fries will remain in the fresh water bodies and fear that unscrupulous fishermen will catch those. "This is the most crucial point the people must be aware of," said Md Shahidul Islam, deputy director of the department.

The department has assessed that Tk 138.05 crore needed for rehabilitation of the affected farmers. It will distribute fry, fertiliser, fish food, medicines among marginal farmers owning ponds or water bodies measuring 0.5 acre or less and will provide infrastructure support.

The department has also asked the government, international aid agencies and NGOs for a loan of Tk 191.44 crore for the farmers for breeding, hatching and repair of infrastructures.

The officials said the agriculture sector always gets top priority in the post-floods rehabilitation. But the fish sector experienced such a loss as government must consider it seriously, they added.

Fresh water fish may be affected by diseases as water has been seriously contaminated due to city's sewage and chemical ingredients, said Abul Kashem, chairman of a fish cooperatives union in the city's Mohammadpur area.

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Interest rates, oil to write script for US stocks



Wall Street's focus will be squarely on the Federal Reserve's interest-rate decision next week after weak jobs data raised questions about the pace of future hikes, while concerns about oil prices near $45 a barrel are likely to keep US stocks under pressure.

Earnings releases will slow to a trickle as the second-quarter reporting season comes to a close. But a few key companies are still set to report, such as Cisco Systems (CSCO.O: Quote, Profile, Research) and Wal-Mart Stores Inc.

The economy will get most of the attention, with the centerpoint of the week the Federal Reserve's interest-rate decision on Tuesday. Retail sales data for July on Thursday and the University of Michigan's August consumer sentiment survey on Friday also will be eyed.

However, analysts see little relief from the market's current malaise, as investors fret about oil prices at 21-year highs, geopolitical worries and the economy losing steam.

US stocks closed at the lowest levels of the year on Friday after weaker-than-expected data from the July jobs report stirred investors' fears that the U.S. economic recovery may be weak.

For the week, the Dow Jones industrial average fell 3 percent, closing on Friday at 9,815.33, while the Standard & Poor's 500 Index also dropped 3 percent, ending at 1,063.97. The tech-heavy Nasdaq sank 6 percent during the week, finishing Friday's session at 1,776.89.

Despite this, Fed officials are still expected to add to June's quarter-point increase in interest rates and hike its fed funds rate target by another quarter percentage point to 1.5 percent on Tuesday afternoon, in order to ward off longer-term inflationary pressures.

While Friday's disappointing July jobs data made a rate increase less of a done deal, analysts think the main gray area is about the pace of rate hikes in the future.

"There's uncertainty about where the Fed will be at the year's end and whether it will skip a meeting, but as far as next week goes, the market expects a quarter-point rise. It would really be a stunner if the Fed didn't do that," said John Shin, U.S. economist at Lehman Brothers.

"The main debate is not about next week - it's about September."

The uncertainty means Wall Street will be scrutinizing the Fed's statement, which in June said rate rises should be at a "measured" pace.

"If they keep in the 'measured' phrase and they don't make any significant comments, it could turn out to be, from the markets' perspective, a bit of a non-event," Shin added.

Rising interest rates are generally bad news for stocks because of the impact on companies' borrowing costs and consumer spending. A full 1 percent rate increase would translate into an additional $3.1 billion pre-tax expenditure by S&P 500 companies, according to Howard Silverblatt, market equity analyst at Standard & Poor's.

While rising interest rates are a dampener, investors are more worried by stubbornly high oil prices. U.S. crude futures hit historic peaks last week -- rising as high as $44.77 a barrel before settling at $43.95. That leap near $45 took the price of U.S. crude to its highest in the 21 years that oil futures have been traded on the New York Mercantile Exchange.

Crude oil is a factor in almost every aspect of production and transportation of goods and services, and affects the profits of almost all companies. As a consequence, stocks have closely mirrored the change in crude oil futures, with the stock market falling when oil futures rise.

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