Cement makers witness moderate profit growth on currency stability

Most of the listed cement manufacturers have witnessed a moderate profit growth year on year in the July-March period of the fiscal year 2024, buoyed by diminished foreign exchange loss following the return of stability in the currency exchange rates. While the companies demonstrated mixed performance in revenue growth, efforts to reduce administrative and distribution expenses played a crucial role. Despite strides in management efficiency and revenue upsurge for some, increased finance costs impacted overall profit growth. Despite lower sales volume, the reduction in foreign exchange loss was the main factor behind the profit growth in the cement industry, according to Masud Khan, Chief Adviser to the Board of Crown Cement. The company’s foreign exchange loss declined 84 per cent to Tk 55.21 million in July-March of FY’24, compared to the same period of FY’23. That’s why the company was able to report a 42 per cent year-on-year growth in profit in July-March of FY’24, overcoming the impact of 110 per cent year-on-year rise in bank interest and other charges. The reduced administrative, selling and distribution expenses also facilitated the profit growth a bit. The company’s share price closed at Tk 76.50 on Thursday. The company’s poor performance observed in July-March, FY’23 due to post impact of Ukraine-Russia war was another reason behind the steep profit growth observed in July-March, FY24. Of other listed cement makers, Crown Cement has experienced a 173 per cent year-on-year growth in profit to Tk 876.15 million in July-March, FY’24. The company, however, saw a 33 per cent year-on-year decline in profit to Tk 170.77 million in January-March, FY’24. Aramit Cement incurred a loss of Tk 144.32 million in January-March, FY’24 while its loss in July-March of FY’24 was Tk 411.30 million.

Source: https://today.thefinancialexpress.com.bd/stock-corporate/cement-makers-witness-moderate-profit-growth-on-currency-stability-1714839906

BB likely to discard SMART formula as interest rate surges

The Bangladesh Bank plans to ditch the SMART formula used currently to fix the interest rate on loans, in line with the prescription of the International Monetary Fund (IMF) that has proposed a market-based rate-setting system. In July last year, the central bank withdrew the 9 percent lending rate cap and introduced the Six-months Moving Average Rate of Treasury bills (SMART). The likely suspension of the rate-setting formula comes at a time when a mission of the IMF is in Dhaka to discuss the progress of the $4.7 billion loan programme. It has already met with the different stakeholders. The observation has been made because banks are allowed to add as high as 3.75 percentage points to the SMART rate as the margin for lending. Similarly, the central bank has control over fixing the SMART rate. Currently, the yield of the 91-day bills stands at 11.35 percent, the 182-day bills at 11.40 percent and the 364-day bills at 11.60 percent. This was up from 6.95 percent, 7.25 percent, and 8.30 percent respectively in June last year. The SMART rate for March stood at 10.55 percent. Since banks can add 3.75 percent as margin, the highest lending rate stood at 14.3 percent in April. The SMART rate was at 7.13 percent.

Source: https://www.thedailystar.net/business/economy/news/bb-likely-discard-smart-formula-interest-rate-surges-3601991

Export of plastic products witnesses nearly 18% growth during July-April of FY24

The export of plastic products witnessed a healthy growth of nearly 18% during the July-April period of the current fiscal year (FY24) fetching $201.09 million due to competitive price advantage and creation of newer markets. According to the latest statistics of the Export Promotion Bureau (EPB), this was the highest volume of export of plastic items during the 10-month period compared to the same period of the previous fiscal years. As per the statistics of the EPB, the export of plastic items during the July-April period of the last fiscal year (FY23) totaled $170.6 million. The strategic export target for the plastic sector in the current fiscal year (FY24) has been set at $275 million.  The global market size of plastic products is worth $600 billion.

Source: https://www.tbsnews.net/economy/export-plastic-products-witnesses-nearly-18-growth-842821

Remittance rose 21% in April for Eid

Remittance inflow to Bangladesh rose 21.31 percent year-on-year to $2.04 billion in April thanks to Eid-ul-Fitr as the country’s migrant workers typically send more money home ahead of the major religious festival for Muslims. Meanwhile, industry insiders said the remittance inflow increased because some banks started offering higher rates than the official rates in case of collecting remittance. April’s receipts were also 2.31 percent higher than that of the previous month. In March, $1.99 billion entered Bangladesh as remittance. Banks can offer a maximum of Tk 114.5 per US dollar, including the Tk 2.5 government incentive, but some are offering up to Tk 120 per dollar, according to bankers. The official exchange rate is Tk 110. Last month, the highest amount of remittance came through Islami Bank with $541.25 million. Social Islami Bank followed with $148.23 million, BRAC Bank with $121.51 million, Janata Bank with $111 million and National Bank with $110.18 million.

Source: https://www.thedailystar.net/business/economy/news/remittance-rose-21-april-eid-3600576