Liquidity crunch looms as imports, credit demand on the rise
Banks will come under a liquidity crunch within three to six months due to an escalation of import financing and a rising demand for loans from businesses as the economy returns to normalcy, warned several top executives yesterday. The excess liquidity had stayed at historically high levels as of June because of the economic slowdown caused by the coronavirus pandemic, but the trend has already begun reversing. Surplus funds in the banking industry stood at Tk 219,600 crore as of September, down from 5 per cent a month ago, according to data from the Bangladesh Bank. In June, the excess liquidity rose to a record high of Tk 231,711 crore. This compelled the central bank to revive the Bangladesh Bill, an instrument used to mop up excess liquidity, in August. The settlement of letters of credit (LCs), also known as actual import payments, swelled 47 per cent year-on-year to $17.04 billion between July and September. The credit growth stood at 8.77 per cent in September, up from 8.42 per cent a month earlier. The credit growth had decelerated to 7.52 per cent in the last fiscal year, the lowest in at least 28 years. Emranul Huq, managing director of Dhaka Bank, however, thinks that the liquidity shortage might hit the banking sector within the next three months. The central bank has targeted a 14.80-per cent private sector credit expansion in the current fiscal year. Many banks are in a difficult situation to settle LCs, so they have rushed to the central bank to purchase US dollars. The BB has sold about $1.38 billion worth of US dollars between July 1 and October 27 to tackle the depreciation of the taka against the dollar. The average interbank exchange rate was Tk 85.66 per USD on October 31, up from Tk 84.80 a year ago.
Taxpayers to get refunds in their bank accounts
The tax authority has drafted a new income tax law that seeks to automatically provide refunds of excess tax paid by citizens to their bank accounts, said the National Board of Revenue (NBR). The move comes at a time when the issue of availing refunds of excess tax continues to be very difficult for taxpayers, mainly for inertia among taxmen seeking to avoid future complexities. In fiscal 2018-19, Tk 1,764 crore was refunded against a collection of Tk 69,074 crore. The refund amounted to only Tk 65 crore in fiscal 2017-18, according to the NBR’s annual reports. The revenue administration, which collects more than 85 per cent of state revenue, arranged the briefing after posting the draft on its website for opinions from stakeholders to ultimately replace an existing Income Tax Ordinance 1984. Issues have been incorporated to curb tax avoidance by local companies through transfer pricing — a transaction under which one division or associated entity of a company sells goods or services to another division of the company or group.
Robi Axiata sees 122.50pc growth in EPS for Q3
Robi Axiata saw 122.50 per cent growth in consolidated EPS for July-September (Q3), 2021 compared to same quarter of previous year riding on increased revenue and effective cost management. The country’s second largest telecom operator reported its consolidated EPS of Tk 0.17 for Q3, 2021 which was Tk 0.08 for same period of the previous year. The company’s financial statement for Q3, 2021 was released on Sunday at a virtual event. Robi’s consolidated EPS was Tk. 0.32 for January-September 2021 as against Tk. 0.25 for January-September 2020. The consolidated NAV per share of Robi was Tk. 12.61 as on September 30, 2021 and Tk. 13.90 as on December 31, 2020. Robi has informed that it’s 4G subscriber base grew 12.7 per cent in Q3, 21 from Q2,21. Robi’s revenue reached Tk 20.85 billion in Q3, 2021 following a rise of 2.7 per cent compared to the last quarter. Including capex investment of Tk 6.50 billion in Q3, 2021, the total capex investment in the first nine months (January-September) of the year reached Tk 13.86 billion. Robi paid Tk 11.19 billion to the government exchequer in Q3, 2021, which was 53.7 per cent of its revenue for the quarter.
Treasury bonds hit a milestone of multiple trading
Treasury bonds hit a milestone by being traded multiple times for the first time at the Chittagong Stock Exchange (CSE) on Sunday. The port city bourse arranged the piloting of the multiple trading of government-owned treasury bonds to observe if any technical issues arise or not. On that day, four bonds with the tenure of two years and 10 years changed hands. Individual investors Amirul Islam, MTB Unit Fund, Sandhani Asset, and City Brokerage bought the bonds. The trading took place through Dhaka Bank Securities, Mona Financial Consultancy and Securities, Square Securities, City Brokerage, and LankaBangla Securities. Earlier on 14 October, the trading of government treasury bonds has resumed after 16 years on the secondary market of the Dhaka Stock Exchange (DSE). On that day, the units of the newly-listed Tk4,500 crore treasury bond, issued by the Bangladesh Bank with a 10-year tenure, were traded for Tk1.10 lakh. “We have a lot of investors here who want to invest risk-free. Treasury bonds are the best options for them,” Nafeez Al Tarik, managing director of Dhaka Bank Securities, told The Business Standard. According to the central bank data, the interest rate for a two-year term Treasury bond is 4.13%, for five-year 5.75%, for 10 years 6.80%, for 15 years 7.19%, and for 20 years 7.44% till 27 October.