Stocks maintain gaining streak
The engineering and non-bank financial institution (NBFI) sectors pushed the country’s stock market upward yesterday thanks to increased investor participation. DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), rose 142.26 points, or 2.48 per cent, to 5,861.02. This was the highest since February 7, 2019 or a 23-month high. Stocks of the engineering sector went up 5.45 per cent while it was 2.88 per cent for NBFIs, according to the daily market analysis of UCB Capital Management. These two sectors topped the turnover list as well with the NBFI sector accounting for Tk 295 crore, or 14.88 per cent of the total turnover. Meanwhile, the engineering sector registered around Tk 218 crore, or 11 per cent of the total turnover.Turnover, an important indicator of the stock market, rose 18 per cent to Tk 1,982 crore yesterday. Among the 361 stocks traded at the DSE, 195 advanced, 106 dropped and 61 remained the same. Generation Next topped the gainers’ list, rising 10 per cent followed by Dominage Steel, Alltex Industries, Beximco and Robi Axiata. LankaBangla Finance was the most traded stock with Tk 119 crore worth of shares changing hands followed by Beximco Pharmaceuticals, Beximco, LafargeHolcim Bangladesh and IFIC Bank. ADN Telecom shed the most, losing 9.88 per cent followed by CAPM IBBL Mutual Fund, Sonali Ansh, Provati Insurance and Republic Insurance. The port city bourse also rose yesterday as the general index of the Chittagong Stock Exchange, CASPI, climbed up 424 points, or 2.54 per cent, to stand at 17,089. Of the 291 traded stocks, 182 rose, 70 fell and 39 remained unchanged.
eGeneration to raise Tk 15cr from market
Local system integration and software solutions provider eGeneration is set to raise Tk 15 crore from the stock market to expand its IT business in the coming years. The company received the Bangladesh Securities and Exchange Commission’s approval last October to offload 1.5 crore shares. The company was incorporated in 2003, the year it began commercial operations. Subscriptions for the initial public offering (IPO) started to be accepted since yesterday and will continue until January 18. The IPO proceeds will be used to buy commercial space and repay loans. The business also plans to invest Tk 1.83 crore of the fund to enhance its IT infrastructure for the development of digital healthcare platforms to increase revenue generation.The government has more than Tk 800 crore worth of healthcare transformation projects in the works for the next couple of years, the company said, adding that using information and communication technology was a unique concept for providing better health service. It said to have been conducting research and development work in health technologies for the past two years. The company plans to repay Tk 3.40 crore of its debt to IPDC Finance to minimise its interest burden of 11.5 per cent per annum. As the demand for IT solutions has been rising amid the ongoing coronavirus pandemic, IT based companies have huge potential, said stock investor Torikul Islam. Local demand for software stood at $1.10 billion in 2017 while it is forecasted to hit $ 4.6 billion in 2025, according to the IPO prospectus.
Govt develops format for project feasibility studies
The government has framed a format on feasibility studies to put an end to a decades-long practice of including projects in the development programme without proper assessment and economic viability in order to get rid of delays and cost-overrun.Sometimes, locations for a project are not identified and the land is not acquired. This means implementing entities face problems in embarking on implementation after the approval of the development project proposal (DPP) by the Executive Committee of the National Economic Council.Many people, including the prime minister raised questions about undertaking projects before carrying out any feasibility study. Around 1,800 to 1,900 projects are implemented every year. The feasibility study of projects costing more than Tk 50 crore must be conducted before the implementation begins. Otherwise, the planning commission will not place the project proposal at the Ecnec.For instance, the Chattogram-Cox’s Bazar Railway Project was undertaken 12 years ago without any feasibility study, said a number of planning ministry officials.The new format of the feasibility study will provide an explicit definition of the problem to be addressed, identify the likely causes of the problem and give a brief insight of the likely consequences if no intervention is made, according to the draft document.
Stimulus Funds: BB steps in as banks charge higher interest
The central bank yesterday asked banks not to impose more than 4.5 per cent interest rate on the funds disbursed from the stimulus package for the large borrowers in the industrial and service sectors. Some banks had imposed 9 per cent interest rate on the borrowers just after they gave out the loans under the package worth Tk 40,000 crore in violation of a central bank instruction, the Bangladesh Bank said in a notice. The central bank introduced a Tk 30,000 crore stimulus package on April 12 last year as part of its move to shield the industrial and service sectors from the business slowdown brought on by the coronavirus pandemic. The volume of the stimulus package was extended to Tk 40,000 crore in phases. The end-users are supposed to get the loans at 4.5 per cent. Banks are allowed to receive an interest rate subsidy of 4.5 per cent from the central bank on the loans. The pandemic-hit affected clients who have already borrowed from banks can take a maximum of 30 per cent loans from their existing credit limit. The most affected borrowers will be given priority while disbursing the loans from the fund, and banks will provide the loans from their coffer. Banks have so far disbursed Tk 31,000 crore of the stimulus package.
Bangladesh makes strong case for LDC graduation
Bangladesh is set to meet the LDC graduation criteria for the consecutive second time and will be recommended for graduation during the upcoming triennial review of the Committee for Development Policy (CDP) of the United Nations next month. The country has called on the international community for the continuation of support measures for an extended period to make the upcoming graduation smooth and sustainable. Bangladesh has made the call during a session of the ongoing expert group meeting of the CDP yesterday as part of the preparation of the upcoming triennial review meeting.It was projected during the meeting that since Bangladesh had met all the criteria for LDC graduation for consecutive second time, the country would be recommended for graduation in the upcoming triennial review. At the same time, the Bangladesh delegation called for providing extended preparatory period of five years spanning from 2021 to 2026. Bangladesh met all the criteria for LDC graduation for the first time during the last CDP triennial review held in March 2018, according to the statement.If Bangladesh gets five-year preparatory period for graduation after being recommended by CDP during the upcoming triennial review, the country will formally graduate from the LDC status in 2026. During this preparatory period, Bangladesh would be entitled to enjoy all the international support measures reserved for LDCs. In addition, as per the existing provisions, the country would also remain eligible to enjoy duty-free and quota-free access in the European Union market for three more years until 2029.