Many listed banks report sound earnings in Q1

Many of the banks listed with the stock market have reported better earnings in the January-March period of this year compared to last year’s corresponding quarter. According to information from Dhaka Stock Exchange (DSE), out of 30 listed banks, 12 have so far published their quarterly financial statements (un-audited) for the first quarter (Q1) of the calendar year. Of the dozen that revealed their financial health, the earning per share (EPS) of 8 rose while the EPS of the remaining four banks declined. The banks whose EPS showed upturn are AB Bank, Al-Arafa Islami Bank, Dhaka Bank, Eastern Bank Limited (EBL), Mutual Trust Bank (MTB), Shahjalal Islami Bank, Standard Bank and Trust Bank. According to DSE, the consolidated EPS of AB Bank for the January-March 2016 period was BDT 1.08 as against BDT 0.96 for January-March 2015. The company’s consolidated net operating cash flow per share (NOCFPS) was BDT 12.98 for January-March 2016 as against BDT 4.05 for January-March 2015.

Source: http://print.thefinancialexpress-bd.com/2016/05/08/140937

Net profit of most listed NBFIs rises in 2015

Most of the non-bank financial institutions listed with the country’s bourses posted higher a net profit in 2015 compared to that in the previous year. Of the 23 listed NBFIs, the post-tax net profit of 14 entities in 2015 increased, seven entities suffered a profit fall, while the remaining two entities – Bangladesh Industrial Finance Company and FAS Finance & Investment— are yet to announce the profit figures, shows the Dhaka Stock Exchange data. Of the NBFIs, the accounting year of 20 companies ended on December 31, 2015 and of three others on June 30, 2015. The gross net profit of the NBFIs rose by 11.66% or BDT 1.01 billion in last year from that in 2014. The total profit of the entities swelled to BDT 9.68 billion in 2015 from that of BDT 8.67 billion in the previous year. Rescheduling large-scale bank loans with a view to benefit clients might be a reason behind the rise in net profit of most of the listed NBFIs, a senior Bangladesh Bank official told New Age.

Source: http://newagebd.net/228334/net-profit-listed-nbfis-rises-2015/

Yields from treasury bills, bonds rising

The yields from both government treasury bills and bonds started to rise from April after more than two years, ending frustrations of banks concerned. People familiar with the development said the government borrowing began rising in recent months leading to hike in the yields. The government had been borrowing much less since August last. But in recent months, the amount is rising gradually. It borrowed on an average BDT 13.50 billion on each bid held weekly on three short-term bills in April last. It borrowed on an average BDT 7.0 billion as long-term bonds in the same month. However, the weighted average yield on 91-Day, 182-Day and 364- Day Treasury Bills increased to 3.30%, 4.43% and 4.80% respectively in April (up to third week), 2016 compared to their immediate previous yields, according to central bank data. The weighted average yield on 2-Year BGTB, 5-Year BGTB and 10-Year BGTB increased to 5.25%, 6.16% and 6.91% respectively in April (up to third week ), 2016 from the corresponding yields of the earlier month.

Source: http://print.thefinancialexpress-bd.com/2016/05/06/140827

Corporate foreign borrowings fall

A growing zeal of local companies for commercial borrowing from foreign sources is losing steam as the volume of offshore credits has come down significantly this calendar year for slim interest differentials. Some analysts attribute the fall, measured up until April 2016, to lower lending rates on term loans and other short-term credits from domestic sources. However, many critics see deep cuts in the rates of interest both on time and demand deposits in the country’s banking system as a key reason. They argue a section of local firms used to borrow offshore funds on many grounds and used to keep a part of the borrowed money in deposits with banks for a long time. Thus, they used to earn money, accrued as interests, for sharp differences between the rates of interest offered by overseas financial institutions and the local banks. The overseas loans usually carry 4.5% rate of interest including LIBOR. If it [rate of interest rate] rises, a special approval is required from the Board of Investment (BoI). Local banks earlier used to charge as high as 13-14%, or more.

Source: http://print.thefinancialexpress-bd.com/2016/05/07/140881

Government to raise bank borrowing in June to meet budget deficit

The government is set to increase bank borrowing in June partly to finance its budget deficit by the end of ongoing fiscal year (FY) 2015-16, officials said. It may borrow BDT 108.50 billion from the banking system with issuing treasury bills (T-bills) and bonds in the month of June, according to the auction calendar, released by the Bangladesh Bank (BB). Such gross bank borrowing figure has already been fixed at BDT 68.50 billion for May 2016. Total gross bank borrowing by the government is expected to reach BDT 177.0 billion during the last two months of the FY 16, according to the calendar. The implementation of development projects normally becomes faster during the May-June period of every fiscal, a BB official told the FE Thursday while explaining the main objective of such borrowing. The government’s net bank borrowing is likely to stand at around BDT 97.0 billion during the period under review after deduction of the securities maturity, the official added. The government is now empowered to borrow up to BDT 40.0 billion from the central bank under the WMAs to meet its day-to-day expenditures without issuing any securities.

Source: http://print.thefinancialexpress-bd.com/2016/05/06/140817

Finance Ministry teams up with World Bank to streamline State Owned Banks

The finance ministry in a frantic move to rescue the scandal-hit public sector banks has tilted to the World Bank for developing charters for bank boards, criteria of eligibility for becoming board members, and appointment regulations for potential bank directors. The move to be carried out in the form of a WB project styled ‘Bangladesh modernization of state-owned financial institutions’ also includes rolling out corporate governance in all the nine commercial and specialized banks in the country and improving their nascent internal control and internal audit functions, a senior finance ministry official said. Presently, more than 60 politically appointed directors are sitting on the boards of the nine state-owned banks, and it has been alleged that they often intervene in the banks’ operational aspects and influence their loan sanctioning process in favor of clients of their choice.

Source: http://newagebd.net/228654/fin-min-teams-up-with-wb-to-streamline-sobs/

Bangladesh a top choice in Asian Development Bank financing: official

Bangladesh will remain a priority for the Asian Development Bank in its lending expansion plan for the next five years, said Hun Kim, director general of the South Asia department of the lender. He said Bangladesh got USD 1.5 billion in financing from the ADB in 2015, and this year the lender will start a USD 1-billion railway project. Fund is not a problem for Bangladesh; its capacity to absorb funds has to be increased.” Kim, a Korean national, also said Bangladesh has been on a higher growth trajectory. Bangladesh’s capacity to utilize aid has increased significantly compared to its South Asian peers, he said “Bangladesh is a success story but it is not fully recognized; it is doing everything right in the region.

Source: http://www.thedailystar.net/business/bangladesh-top-choice-adb-financing-official-1219477

New move to off-load shares of state-owned enterprises

The government has failed to off-load shares of the state-owned enterprises in the stock market during the past six years allegedly due to bureaucratic tangles. Bank and Financial Institutions Division has called an inter-ministerial meeting with 26 state-owned companies on next Sunday to “remove the bureaucratic hurdles.” The meeting will be presided over by Bank Division Secretary Md Yunusur Rahman. According to Bank Division sources, the government has been able to off-load only the shares of Bangladesh Submarine Cable Company Ltd during the last six years. Before that, the additional shares of the Meghna Petroleum, Titas Gas and Jamuna Oil Company were off-loaded in the stock market. Officials said the shares of the Dhaka Electric Supply Company Ltd (Desco) and Power Grid Company of Bangladesh Ltd could not be off-loaded due to “various reasons.” In 2010, the government asked the authorities of the 26 state-owned companies to off-load their shares into the stock market.

Source: http://www.dhakatribune.com/business/2016/may/06/new-move-load-shares-soes#sthash.4irfYHl6.dpuf

Exports shoot up 9.2% in ten months

Merchandise exports recorded a 9.22% growth reaching USD 27.63 billion in July-April of 2015-16 fiscal compared to the same period of last fiscal, the government said. The overall export earnings also surpassed the target set for the period by 1.95%, data released by the state-run Export Promotion Bureau (EPB) showed. Though single-month earnings in April 2016 grew by 11.82% compared to that of April 2015, proceeds from overseas sales fell to USD 2.68 billion in April from USD 2.83 billion in March last, USD 2.85 billion in February and USD 3.18 billion in January 2016, the EPB data revealed. The country fetched USD 10.73 billion from knitwear during the first ten months of current fiscal showing a 7.29% growth. The income from woven items reached USD 11.89 billion during the same period of current fiscal recording a 12.71% growth, which also surpassed the target by 4.25%. Earnings from home textile, however, declined by 6.69% to USD 623.73 million which also fell short of target by 9.32%.

Source:
http://print.thefinancialexpress-bd.com/2016/05/06/140786
http://www.thedailystar.net/business/exports-beat-target-narrowly-1219483
http://www.dhakatribune.com/business/2016/may/06/exports-exceed-27bn-10-months#sthash.bBlMh4We.dpuf
http://newagebd.net/227997/export-earnings-grow-9-22pc-in-july-april/

Bangladesh a top choice in Asian Development Bank financing: official

Bangladesh will remain a priority for the Asian Development Bank in its lending expansion plan for the next five years, said Hun Kim, director general of the South Asia department of the lender. He said Bangladesh got USD 1.5 billion in financing from the ADB in 2015, and this year the lender will start a USD 1-billion railway project. Fund is not a problem for Bangladesh; its capacity to absorb funds has to be increased.” Kim, a Korean national, also said Bangladesh has been on a higher growth trajectory. Bangladesh’s capacity to utilize aid has increased significantly compared to its South Asian peers, he said “Bangladesh is a success story but it is not fully recognized; it is doing everything right in the region.

Source: http://www.thedailystar.net/business/bangladesh-top-choice-adb-financing-official-1219477

Fresh gas price hike can choke textile sector

The proposed 130% hike in gas price for captive power plants will badly hurt the country’s primary textile sector, which is already struggling for the deluge of cheap fabrics and yarns from China and India. The hike will take the price of gas to BDT 19.26 per cubic meter from BDT 8.36 now. The government had already raised the price of gas for captive power plants as recently as September last year from BDT 4.36 per cubic meter to the current rate. “Probably the highest hike has been proposed for the captive power generators,” said A Matin Chowdhury, managing director of Malek Spinning Mills, a leading spinner. Captive power generators account for 17% of total gas consumption, according to data from Petrobangla, the national oil, gas and mineral exploration company. Primary textile accounts for 4% of the electricity generated by captive power plants. The primary textile sector, where more than $5 billion has been invested so far, would be affected, said Chowdhury, who is also a former president of the Bangladesh Textile Mills Association.

Source: http://www.thedailystar.net/business/fresh-gas-price-hike-can-choke-textile-sector-1220236

Germany to bankroll Bangladesh’s power transmission upgrade

Germany is providing 139.5 million euros in loans and grants to Bangladesh to improve its power transmission system. Bangladesh and KfW Development Bank of Germany signed two agreements in Germany on Wednesday to support the improvement of power transmission. Mohammad Mejbahuddin, senior secretary of the Economic Relations Division, and Claudia Arce, KfW’s director for South Asia, signed the deals, the German Embassy in Dhaka said in a statement yesterday. The ceremony was attended by Finance Minister AMA Muhith and Hans-Joachim Fuchtel, parliamentary state secretary of the German federal ministry for economic cooperation and development. The financing package consists of a concessional loan of 137.5 million euros and a grant of 2 million euros. It is the single biggest project that is being supported financially by the German government for Bangladesh, according to the statement. The project prioritizes the extension of existing and construction of new transmission lines and substations across Bangladesh.

Source: http://www.thedailystar.net/business/germany-bankroll-bangladeshs-power-transmission-upgrade-1219474

Bangladesh Petroleum Corporation (BPC) to import 1.50 million ton diesel, jet fuel at lower premium rates

The Emirates National Oil Company (ENOC) and the Unipec Singapore Pte Ltd will start supplying 1.50 million tons of diesel and jet fuel to state-run Bangladesh Petroleum Corporation (BPC) at lower premium rates from June. The BPC has already awarded contracts to these firms as they became successful in a competitive bidding to supply 1.32 million tons of diesel and 180,000 tons of jet fuel in 2016, BPC director for operations Mosleh Uddin told the FE Saturday. The state-run corporation has already chalked out a plan to streamline fuel imports from these two oil suppliers, he said. The cabinet committee on public purchase in its meeting on April 20 approved importing of the fuel from the ENOC and the Unipec. The BPC’s import costs would be lower as they quoted lower premium rates which are around 25.0% less compared to the premium rates under its existing term deals with the oil suppliers.

Source: http://print.thefinancialexpress-bd.com/2016/05/08/140915

Country to get 500MW more power by June: State Minister for Power, Energy and Mineral Resource

The country’s power sector is going to get further boost as 500 megawatt electricity is likely to be added to the national grid by this June, raising the total power generation capacity to at least 15,000 MW. “The country would get 500 MW power by this June and the generation capacity would reach to over 15,000MW,” State Minister for Power, Energy and Mineral Resources Nasrul Hamid told BSS on Saturday in the city. He said that the government has set its target to bring all citizens under electricity coverage by 2021 under the visionary and undaunted leadership of Prime Minister Sheikh Hasina that pulled out the nation from the abyss of darkness caused by load shedding.

Source: http://print.thefinancialexpress-bd.com/2016/05/08/140917

Demand for building materials on the rise

The government’s infrastructure projects and rising homebuilding in rural areas and suburbs have provided scope for construction ingredient makers to make up for the void in demand created by the slowdown in the real estate sector. “Government spending on infrastructure plays a driving role in construction activities,” said Aameir Alihussain, managing director of BSRM, the country’s largest steel maker. Remittance inflows and increased farm income have also fuelled demand for construction materials, including rod, in rural and suburban areas. “These sectors can fill up the vacuum that has been created for sluggishness in the real estate sector,” Alihussain said. Currently, the government is implementing various projects, including flyovers and bridges, which have sustained the demand for steel, cement and other ingredients. “We have seen strong growth in the demand for construction materials in rural and suburban areas,” said Md Alamgir Kabir, additional managing director of MI Cement.

Source: http://www.thedailystar.net/business/demand-building-materials-the-rise-1220233

World Stock and Commodities

Exchange Rates

*Currencies and Commodities are taken from Bloomberg.