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TT-Clean: 77.1 | TK BC-Selling: 78.1
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TT-Clean: 77.1 | TK BC-Selling: 78.1
TK OD-Sight: 76.88 TK | TC-Selling: 78.1 TK

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TT-Clean: 77.1 | TK BC-Selling: 78.1
TK OD-Sight: 76.88 TK | TC-Selling: 78.1 TK

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Rate last updated: 02/01/2014 11:15:04 AM

Important Business News Extracts February 11, 2018

Import orders double in first half of fiscal year

Import orders almost doubled in the first half of the fiscal year thanks to bulk purchase for the Rooppur nuclear power plant. In the first six months of fiscal 2017-18, $40.23 billion worth of letters of credit were opened, up 74.76 percent year-on-year, according to data from the Bangladesh Bank. The opening of LCs signifies import orders. Bangladesh Atomic Energy Commission opened LCs worth $11.38 billion through state-owned Sonali Bank in November to import different items to build the nuclear power plant, according to a BB official. “The LC has been opened under the ‘others’ category of the central bank’s import statistics,” he said. The import orders for the Rooppur power plant, which would be the highest in the country’s history, would not put any pressure on the country’s foreign exchange reserves at present. “The reserves, however, may come under pressure when the government starts to pay instalments for the loans,” he said. BAEC will settle the LCs using the Russian credit, which will have tenure of 30 years with a 10-year grace period. Bangladesh will have to start repaying the loans from March 2027. The Rooppur plant is expected to supply 2,400 megawatts of electricity to the national grid by 2024.

Source: http://www.thedailystar.net/business/import-orders-double-first-half-fiscal-year-1532965

Now NBFIs hike interest rates

After banks, non-bank financial institutions have now hiked their lending rates by two percentage points due to the sudden liquidity crisis in a development that will hit the SME sector. Although the NBFIs account for only 4 percent of the total outstanding loans in the economy, the industry has a big exposure — at least 20 percent of the total loans — to the small and medium enterprises. “The SMEs will be hit hard,” said Asad Khan, head of research of Prime Finance. Prime Finance now charges a minimum of 16 percent for SMEs and 15 percent for corporate borrowers. Both the rates are two percentage points higher than what they were in November last year. The liquidity crisis began from December last year as rumours started floating that the Bangladesh Bank will crack down on aggressive lending.

Source: http://www.thedailystar.net/business/now-nbfis-hike-interest-rates-1532971

Agent banking spreads in remote areas

Agent banking logged in stellar growth figures in 2017, just two years after full-fledged roll-out of the service, as people in remote areas embrace this innovative form of financial service. For instance, deposit collection through agent banking soared more than 5 times to Tk 2,000 crore and remittance disbursement more than 6 times to Tk 1,982 crore last year. The total number of accounts more than doubled to 12.14 lakh in 2017 from a year earlier, according to data from the Bangladesh Bank. Of the accounts, 62 percent were with Dutch-Bank Bank. At the end of 2017, the total number of agents stood at 2,577, up from 1,646 a year earlier.

Source: http://www.thedailystar.net/business/agent-banking-spreads-wildfire-remote-areas-1531948

Sonali Bank wants govt intervention to recover embezzled money

Sonali Bank called for government intervention to recover huge funds embezzled by Hall-Mark and five other entities as a latest reminder came from above. Recently, the Financial Institutions Division (FID) asked the state-run bank to report the recovery status of the forged loans, as there has been no progress since 2012, officials said. And the bank has sent a report to the division and sought necessary direction to retrieve the money from the entities, they added. Sonali Bank’s Ruposhi Bangla Hotel branch lent Hall-Mark Group and five other companies Tk 39.88 billion between 2010 and May 2012 allegedly through false documents. The little-known big borrowers embezzled the whole amount that belongs to depositors, in collusion with some dishonest bank officials, according to sources concerned.

Source: http://today.thefinancialexpress.com.bd/public/last-page/sb-wants-govt-intervention-to-recover-embezzled-money-1518111385

OBUs’ NPLs soar four times in last Jan-Sept

The classified loans of the offshore banking units (OBUs) of different banks swelled more than four times or Tk 3.18 billion in the first nine months of the last calendar year (2017). The non-performing loans (NPLs) that were provided in terms of foreign currency rose to Tk 4.19 billion as on September 30, 2017, from Tk 1.01 billion as on December 31, 2016, according to the central bank’s latest statistics. However, the amount of such classified loans came down to Tk 4.19 billion in the third quarter (Q3) covering July-September period of 2017 from Tk 4.21 billion in the preceding quarter (Q2). “The classified loans of OBUs increased significantly during the Jan-Sept period, as a substantial amount of foreign currency loan of a first-generation private commercial bank (PCB) turned into NPLs,” an official of the Bangladesh Bank (BB) told the FE on Thursday.

Source: http://today.thefinancialexpress.com.bd/public/first-page/obus-npls-soar-four-times-in-last-jan-sept-1518110842

Most banks not using risk tools

Almost two-third of the country’s banking entities are not using risk tools in their decision making procedure, according to a recent survey conducted on the chief risk officers (CROs) of the banking institutions. At the same time, a large portion of the bank governing bodies are ‘not leading by example’, the survey also revealed. Bangladesh Institute of Bank Management (BIBM) conducted the survey on CROs as part of its study on the prevailing risk culture in the country’s banking sector. The survey has touched upon a number of issues related to risk culture from the point of tone at top, accountability as well as effective challenge and incentivisation, and has revealed a number of ‘surprising’ and ‘not so encouraging’ findings regarding the banking industry.

Source: http://today.thefinancialexpress.com.bd/public/first-page/most-banks-not-using-risk-tools-1518197084

Liquidity shortage hits ICB as banks withdraw deposits

The Investment Corporation of Bangladesh (ICB) has sought assistance of the Financial Institution Division (FID) of the Ministry of Finance to help meet its liquidity shortage. The Corporation has sought FID intervention to ensure investments by different state entities in its term deposit scheme. Funds, thus received, will help keep the country’s bourses vibrant and stable, officials claimed. The ICB, according to sources, is facing shortage of liquidity necessary to keep its investment operations unhindered. Withdrawal of investments in deposit schemes by banks to meet the single borrower exposure limit is responsible for the liquidity shortage, they added. Recently, the ICB has requested the FID to initiate necessary steps and ask the ministries, divisions and state entities to invest in the former’s term deposit scheme. Since the 2010 stock market debacle, the ICB has been trying to reduce financial losses of small investors. It has invested a significant amount of funds in the capital market to help keep it stable, active and sustainable, according to the ICB letter.

Source: http://today.thefinancialexpress.com.bd/first-page/liquidity-shortage-hits-icb-as-banks-withdraw-deposits-1518280860

Sonali gets Tk 200m as commission on hefty LC

Sonali Bank will get Tk 200 million as commission on a hefty letter of credit (LC) opened for Rooppur Nuclear Power Plant (RNPP), after the trimming down of its bigger demand in a trade-off. Officials said the state-owned Sonali Bank Ltd (SBL) had sought Tk 7.0 billion as commission on the US$11.38 billion LC opened for importing equipment and services for the country’s maiden nuclear-power station. Of the total sum, Tk 100 million will be given in fiscal year 2018-19 and the rest Tk 100 million later by amending the development-project proposal.

Source: http://today.thefinancialexpress.com.bd/public/last-page/sonali-gets-tk-200m-as-commission-on-hefty-lc-1518197705

MIDAS Financing Limited has signed an agreement with Bangladesh Bank

MIDAS Financing Limited has signed an agreement with Bangladesh Bank to extend loans among the small and medium entrepreneurs under SMEDP-2, a Refinancing Scheme of Bangladesh Bank. Shafique-ul-Azam, Managing Director of MIDAS Financing Limited, signed the agreement on behalf of the company recently in Dhaka.

Source: http://today.tefinancialexpress.com.bd/trade-market/midas-financing-limited-has-signed-an-agreement-with-bangladesh-bank-1518276989

StanChart coming up with new strategy for Bangladesh

Standard Chartered Bank is preparing its new strategy to carry on its growth momentum in the country, which it deems one of its core markets, said the chief executive of its Bangladesh operations. The Bangladesh franchise had formulated a strategy in 2010 that has served its purpose, said Naser Ezaz Bijoy, who took its helm in November last year, becoming the third Bangladeshi to do so. “We are revising our strategy and it will be finalised within the next month or so. I don’t think the next five years will be the same as the previous five years,” he told The Daily Star in an interview last week. The strategy would be all-encompassing, with equal focus on corporate and institutional banking, commercial banking and retail banking.

Source: http://www.thedailystar.net/business/banking/stanchart-coming-new-strategy-bangladesh-1532935

Govt to borrow another $450m hard-term WB loan soon

Bangladesh is poised to borrow $450 million worth of loan from the Scale-up Facility Fund (SUF) of the World Bank (WB) soon, accepting the terms and conditions almost identical to those of the Bank’s hard-term lending window – IBRD (International Bank for Reconstruction and Development), according to officials. Bangladesh has been one of the highest concessional-loan recipients of the Washington-based multilateral global lender. Officials at the Ministry of Finance (MoF) said Saturday since Bangladesh has become a lower-middle-income-country (MIC) and would shortly graduate to a non-LDC (least-development country), the global lender is gradually hardening its lending terms and raising interest rates. The officials said the Power Grid Company of Bangladesh (PGCB) would borrow this fund for use in strengthening power gridlines in the eastern zone.

Source: http://today.thefinancialexpress.com.bd/first-page/govt-to-borrow-another-450m-hard-term-wb-loan-soon-1518280671

VAT collection from LTU surges 19pc in six months

Revenue collection under the Large Taxpayer Unit (LTU) of Value Added Tax (VAT) witnessed a 19 per cent growth in the first six months of the fiscal 2017-18. During the July-December period of FY18, LTU collected Tk 198.74 (19874 crore), up Tk 31.36 billion from the same period of the previous fiscal year (2016-17), reports BSS. “There was fear of a shortfall in revenue collection due to non-implementation of the VAT law but we’ve been able to remove this concern. LTU usually collects 56 percent of the total revenue collected target,” said VAT LTU commissioner Md Matiur Rahman.

Source: http://today.thefinancialexpress.com.bd/trade-market/vat-collection-from-ltu-surges-19pc-in-six-months-1518276829

ICT exporters get 10pc cash incentive

The government has granted 10 percent cash incentive to the ICT industry against their exports – a move that could be a game-changer for the country’s export scenario. Bangladesh Bank issued a circular to this effect on Thursday, and the incentive will be retrospectively effective from July 2017. The measure meets a long-time demand of the entire information communication technology sector of Bangladesh. Industry people said this would help attain the target of export earnings of $5 billion from the ICT sector by 2021. Mustafa Jabbar, minister of telecom and ICT, called the development a great achievement for the digital industry as a whole. He said it would help increase the export earnings from the technology-related industry.

Source: http://www.thedailystar.net/business/ict-exporters-get-10pc-cash-incentive-1532974

Govt to appoint 30 cos to source spot LNG

The government will sign LNG import deals with 30 global suppliers to source the ‘expensive’ fuel from spot market. State-run Rupantarita Prakritik Gas Company Ltd (RPGCL) has already prepared a draft of master sales agreement (MSA) to purchase lean liquefied natural gas (LNG) from the suppliers, said RPGCL managing director Md Quamruzzaman. The draft of the MSA would be sent to all the 30 LNG suppliers soon to facilitate the deals, he said. He, however, did not disclose the quantity of LNG to be imported from the spot market. The RPGCL, a wholly-owned subsidiary of Petrobangla, earlier had selected the firms from US, UK, France, Qatar, Australia, Italy, Spain, Switzerland, Japan, Singapore, Hong Kong, Malaysia, Bermuda, Malaysia and their consortia to purchase LNG on spot basis, following a competitive tender.

Source: http://today.thefinancialexpress.com.bd/public/trade-market/govt-to-appoint-30-cos-to-source-spot-lng-1518186764

Agro machinery mkt reaches $ 1.2b in 2017: BAU study

Bangladesh imports roughly 68 per cent of agro-machinery amounting to Tk 65.28 billion annually out of its demand, a study by the Bangladesh Agricultural University (BAU) Saturday revealed. Tractors, power tillers, reapers, shallow machines are among 200 farm machinery imported from India, China and Taiwan, said the study. The report was based on data of financial year 2016-17 (FY’17). The study suggested the government policy support for the private sector to help minimise imports by boosting farm machinery production, which ultimately could reduce output costs. The report titled ‘Passage of Agro Machinery in Bangladesh and Government Initiatives’ was unveiled at a seminar on the eve of the three-day Agro Machinery Fair 2018 that kicked off in the city aiming to raise mechanisation in agriculture. The farm mechanisation project of the Department of Agriculture Extension (DAE) organised the fair at the Krishibid Institution Bangladesh (KIB) in Dhaka themed ‘Use agro machinery, save money, time and labour.’ A total of 21 companies, both from the private and public sector are exhibiting over 200 modern farm machinery at the fair.

Source: http://today.thefinancialexpress.com.bd/trade-market/agro-machinery-mkt-reaches-12b-in-2017-bau-study-1518276556

RFL Electronics signs agreement with CDC

CDC, the UK’s development finance institution, will provide 15 million dollars to RFL Electronics Limited, a sister concern of PRAN-RFL Group, says a press statement. The loan will be used to acquire equipment for producing consumer electronic goods for the local market. The loan agreement was signed between RFL Electronics and CDC at a city hotel on Wednesday. Uzma Chowdhury, Corporate Finance Director of PRAN-RFL Group, and Richard Palmer, CDC’s Head of Corporate Debt, signed the agreement. CDC is investing alongside Standard Chartered Bank Bangladesh who are providing an additional three million dollars, for a total financing package of USD 18 million. RFL Electronics is now producing television, refrigerator, air-conditioner, rice cooker, blender, microwave oven, electric kettle, infrared cooker, roti maker, room heater, iron and fan under the Vision brand in Bangladesh. The investment will support the creation of 1500 manufacturing jobs.

Source: http://today.thefinancialexpress.com.bd/public/stock-corporate/rfl-electronics-signs-agreement-with-cdc-1518106811

Tata may make passenger vehicles in Bangladesh

Indian automotive giant Tata Motors Ltd plans to set up a passenger vehicle manufacturing plant in Bangladesh for domestic customers as well as markets in northeast India, said a top official of the company. “Currently, we are conducting a feasibility study for setting up the manufacturing plant,” said Sujan Roy, head of the international business in the passenger vehicle business unit of the industrial conglomerate. He was talking to The Daily Star on the sidelines of the Auto Expo-The Motor Show 2018, the biggest Indian car show that began on Wednesday at the India Expo Mart at Greater Noida in Uttar Pradesh. “We are the leader in commercial vehicle segment like heavy trucks in Bangladesh. We also want to be the leader in the passenger vehicle segment in vibrant Bangladesh,” said Roy. Tata Motors has an assembly plant for small trucks or pick-ups in Jessore. Currently, it can sell 30 to 50 passenger vehicles in Bangladesh every month at an average price of Tk 20 lakh each.

Source: http://www.thedailystar.net/business/tata-may-make-passenger-vehicles-bangladesh-1531942

Medicines sales reach $ 2.6b

A three-day, regional pharmaceuticals exposition began in city Thursday to display latest pharmaceutical products, manufacturing and packaging machinery by both local and international companies. The Bangladesh Association of Pharmaceutical Industries (BAPI) in collaboration with GPE Expo Pvt Ltd organised the Asia Pharma Expo-2018, 10th of its kind, at International Convention City, Bashundhara in Dhaka. Health and Family Welfare Minister Mohammed Nasim inaugurated the expo as the chief guest.

Source: http://today.thefinancialexpress.com.bd/public/trade-market/medicines-sales-reach-26b-1518104912

Local and Global Stock Indices *

Index Name Close Value Value Change Percentage Change
DSEX 5,965.63 ↑29.28 ↑0.49%
DJIA 24,190.90 ↑330.44 ↑1.38%
FTSE100 7,092.43 ↓78.26 ↓1.09%
Nikkei 225 21,382.62 ↓508.24 ↓2.32%

World Commodities *

Commodity Close Value Value Change Percentage Change
Crude Oil (WTI) $ 59.20 ↓1.95 ↓3.19%
Crude Oil (Brent) $ 62.79 ↓2.02 ↓3.12%
Gold Spot $ 1,316.65 ↓2.11 ↓0.16%

Major Currencies Exchange Rates Movement in Last Seven Days *

Exchange Rates
USD 1 BDT 83.20
GBP 1 BDT 115.04
EUR 1 BDT 101.94
INR 1 BDT 1.29

*CURRENCIES AND COMMODITIES ARE TAKEN FROM BLOOMBERG.