At Capital Weekly 08 September 2008

Key themes in this issue are: Bangladesh: • We discuss the dispute between Prof Yunus and Telenor on Grameenphone’s control that will undoubtedly give many foreign investors significant concerns. • Dr Yunus continues to claim that Telenor refused to honour an agreement sealed in 1996 to transfer its majority holding to his Grameen Telecom by 2002 • However the battle in the court of public opinion runs a number of risks for the IPO. • One potential investor fear is event risk of future bad news/unforeseen accusations if Professor Yunus continues to attack GP’s business practices/ ethics in the press. • Another question will be: What is the business model a GP majority owned by Grameen is likely to follow in the future. Will act more like an NGO with a not-for-profit ethos at the expense of other shareholders? • There is also potential uncertainty over not only the potential distribution of dividends but also whether a greater emphasis on social responsibility might come at the expense of profit-maximization. • We would argue that it is in the interest of both Telenor and Prof Yunus to reach an agreement behind closed doors and publish a binding statement as to their intent to reassure prospective investors. Otherwise they risk short-circuiting what is undoubtedly a seminal event in the evolution of Bangladesh’s capital markets. Global Markets: • US August unemployment rate spikes • GSE Semi-Nationalization imminent • PIMCO's Bill Gross on need for broader government intervention • Roger Lowenstein on lessons not learnt after LTCM