ADB to help fight bad loans

Asian Development Bank is poised to provide financial support to the government to form a public asset management company (PAMC) with a view to arresting the upward trend of defaulted loans. A PAMC purchases non-performing loans (NPLs) from banks and sells them off to individuals or corporate entities. The company will take the NPLs off banks’ hands in exchange for special bonds that would have certain maturity, enabling lenders to keep provision for bad loans. The outcome from the ongoing conference will help reduce the NPLs and the ADB is fully committed to ensuring a sustainable Bangladesh, he said while delivering his opening remarks. NPLs in the banking sector stood at Tk 112,425 crore as of June this year, up 20 percent from six months ago. The central bank started working on a PAMC at the beginning of 2019 when it carried out an extensive analysis of seven Southeast Asian countries on how they had brought down their large amounts of NPLs after the Asian financial crisis. In order to make vibrant the PAMC, a secondary market for NPLs will be needed, where people would be allowed to buy and sell default loans. A special AMC act will be needed to function properly. Junkyu Lee, chief of the financial sector at the ADB, while presenting a keynote paper on NPL resolution mechanisms, said an increase in NPLs leads to a reduction in credit supply and a rise in unemployment and slowdown in overall economic activity. Not only the AMCs were useful in resolving NPLs of the banking sector in the crisis-hit nations, the legal and regulatory environment created to facilitate operations of these companies aided in fostering NPL markets that did not exist before the crisis.

Source: https://www.thedailystar.net/business/news/adb-help-fight-bad-loans-1832335

DSE turnover hits two-month high

Dhaka Stock Exchange is drawing some new investment with a consistent rise in its turnover that reached Tk 560 crore yesterday, a two-month high. Shares worth Tk 377 crore changed hands with the figure rising to Tk 444 crore the following day. Market analysts said investors’ participation is increasing as many stocks have now turned lucrative after massive slide. Many stock investors are rearranging their portfolio to keep some companies’ stocks in their possession seeing their higher earnings and comparatively lower price. Stock brokers mainly earn from the commission on the turnover of the market. Their concern mounted in the last few months when the average turnover dropped below the Tk 350-crore level. The average daily turnover should cross at least Tk 600 crore to help stock brokers make some profit. The DSEX, the benchmark index of the DSE, rose 28.68 points, or 0.61 percent, to 4,722.30 yesterday. However, DS 30, an index of the blue-chip stocks, dropped 1.39 points. Of the traded issues, 184 advanced, 133 declined and 33 remained unchanged. National Tubes dominated the turnover chart with a transaction of Tk 13.44 crore worth of shares, followed by City Bank, Kattali Textile, LankaBangla Finance, and Beacon Pharmaceuticals. Saiham Textile was the day’s best performer with 9.94 percent gain, while Emerald Oil was the worst loser, shedding 8.63 percent. Chattogram stocks also edged up with the bourse’s benchmark index, CSCX, increasing 32.94 points, or 0.38 percent, to finish the day at 8,696.97. Gainers beat losers as 149 advanced, 87 declined while 31 finished unchanged on the Chittagong Stock Exchange. The port city bourse traded shares and mutual funds worth Tk 20.95 crore.

Source: https://www.thedailystar.net/business/news/dse-turnover-hits-two-month-high-1832323

ECNEC clears six Projects involving Tk 73.12 billion

The Executive Committee of the National Economic Council (Ecnec) on Tuesday approved six projects involving Tk 73.12 billion, including a Tk 59.50 billion scheme to expand Dhaka and Western Zone Transmission Grid to different upazilas in 17 districts of Dhaka, Khulna and Barishal divisions. The approval came from the weekly Ecnec meeting held at NEC conference room with Ecnec Chairperson and Prime Minister Sheikh Hasina in the chair, reports UNB. Today’s Ecnec meeting cleared six projects involving Tk 73.125 billion,” said Planning Minister MA Mannan while briefing reporters after the meeting. Of the total cost, Tk 27.785 billion will come from government fund, while Tk 3.217 billion from the own fund of organisation concerned (PGCB) and Tk 42.123 billion from foreign sources as project loan. According to the Planning Commission factsheet, the Dhaka and Western Zone Transmission Grid Expansion Project will be implemented by June 2024 for meeting the growing electricity demand through enhancing capacity and strengthening the existing transmission infrastructure. Power Grid Company of Bangladesh (PGCB) will implement the project with an estimated cost of Tk 59.499 billion in different upazilas of 17 districts – Dhaka, Faridpur, Madaripur, Gazipur, Narayanganj, Gopalganj, Pirojpur, Bhola, Jhalakathi, Patuakhali, Bagerhat, Jashore, Khulna, Kushtia, Meherpur and Satkhira. Of the cost, Tk 42.12 billion will come from the Asian Development Bank (ADB) and Asian Infrastructure Investment Bank (AIIB) as project loan, while Tk 14.16 billion from the national exchequer and Tk 3.21 billion from the own fund of PGCB. Those are Improvement, Width Expansion and Straightening of Magura-Narail Regional Highway involving with Tk 7.24 billion; Improvement of Bogura-Sariakandia district Highway and Construction of Ariarghat Bridge over Bangali River with Tk 2.41 billion; Upgrading Palbari-Dartana-Manihar-Murali National Highway (Jashore) into four-lane with Tk 1.31 billion; and Improvement and Width Expansion of Feni (Masterpara)-Alokdia-Valukia-Laskarhat-Chhagalnaiya (Shantirhat) District Highway with Tk 598.5 million.

Source: https://today.thefinancialexpress.com.bd/trade-market/ecnec-clears-six-projects-involving-tk-7312-billion-1574792173