GSK Bangladesh ricochets to profits

GlaxoSmithKline Bangladesh bounced back to profitability last year thanks to streamlining its business the previous year. The British multinational shuttered its 60-year-old pharmaceuticals business in Bangladesh in 2018. The pharmaceuticals unit, based in Chattogram, was incurring losses in the previous five years, much to the concern of the GSK Bangladesh board. With the view to preventing any more losses, the board decided to bring down the curtains on the business. n 2018, there were significant costs incurred for the factory closure in the form of severance payment to employees and so on, due to which the company recorded losses, he said. In 2019, the impact of discontinued business was minimal. And there were some cost-saving activities too, according to the company’s posting on the Dhaka Stock Exchange website. GSK’s earnings per share (EPS) went up to Tk 81.83, up from Tk 52.75 in the negative in 2018. The news of high profits sent the company’s stocks up 1.23 per cent to Tk 1,867 yesterday. GSK made its debut on the DSE in 1976.

Source: https://www.thedailystar.net/business/news/gsk-bangladesh-ricochets-profits-1873084

Robust exchange rate critical for sustained growth

Poorly managed exchange rate, ad hoc-based incentive and existing domestic protection levels will not make Bangladesh’s exports competitive and help diversify both products and destinations, according to a new plan of the government. Poorly managed exchange rate can be disastrous for economic growth, said the Perspective Plan of Bangladesh for 2021 to 2041. Garment accounts for more than 80 per cent of the national exports, while the EU, the US and Japan are the major export destinations. According to the plan, researches showed that avoiding significant overvaluation of the currency is one of the most robust imperatives that can be gleaned from diverse experience with economic growth around the world and one that appears to be strongly supported by cross-country statistical evidence. Overvalued currencies are associated with foreign currency shortages, rent-seeking and corruption, unsustainably large current account deficits, balance of payment crisis and stop-and-go macroeconomic cycles, all of which are damaging to economic growth. As a long-term strategy for export expansion, the appropriate exchange rate management would be to avoid rigidity or real appreciation of the real effective exchange rate (REER). In addition, the government offers direct cash subsidy for export of non-traditional items, with the rate varying from 5 per cent on jute yarn to 20 per cent on halal meat and potatoes in the current year. The plan targets to raise the contribution of the service sector to the economy to 62 per cent from existing 54 per cent during the period. The government also wants to increase the share of the industrial sector to 40 per cent by 2031 before bringing it down to 33 per cent by 2041. The contribution of agriculture will gradually come down to 5 per cent by the end of the plan period. The per capita income of Bangladesh will reach $12,500 in 2041 from $1,909 now, said Planning Minister MA Mannan.

Source: https://www.thedailystar.net/business/news/robust-exchange-rate-critical-sustained-growth-1873096

No GSP discrimination against BD

Charge d’affaires of the US Embassy in Dhaka JoAnne Wagner on Tuesday said that though the working conditions in Bangladesh’s RMG sector has improved a lot since the Rana Plaza incident, there is more room for improvement. She also made it clear that the USA never discriminate Bangladesh in the issue of providing facilities under the Generalised System of Preference (GSP).The US diplomat was addressing a press conference in the city, organised by the American Chamber of Commerce in Bangladesh (AmCham) on the upcoming US Trade Show scheduled to begin in the capital tomorrow (Thursday).The AmCham is organising the 27th annual U.S. Trade Show from February 27 to 29 at the Pan Pacific Sonargaon Hotel in Dhaka. The US Embassy is the partner of the event.The US government assesses the conditions of labour safety and rights, intellectual property rights, compliance and working environment of a country for providing the GSP facilities, Ms Wagner said. The conditions are same for all the countries, she added.She also mentioned that in recent years the bilateral trade between the two countries has gone up to US$ 9.2 billion, which is more than double from 10 years ago. Forty-eight exhibitors operating in Bangladesh, including in the energy, agro-mechanisation, food and beverage sectors, and more will display their products and services in 78 stalls, he added.During the trade show, the U.S. Embassy in Dhaka will host four informational seminars.On February 28, the embassy officials will discuss the visa process including business, investor, and work visas, at 4:00 p.m., followed by a session at 5:15 p.m. on studying in the United States and the free consultative education services provided by the US Embassy through its EducationUSA Advising Centers.

Source: https://today.thefinancialexpress.com.bd/trade-market/no-gsp-discrimination-against-bd-1582660060