Five insurers face action
Five life-insurance firms are set to face action for their higher management expenses beyond the approved limits and other financial irregularities, sector-insiders said. The Insurance Develo-pment and Regulatory Authority (IDRA) already issued separate show-cause notices upon the five private-sector insurance companies this week, adjoining audit reports and other observations with the notices. The IDRA conducted detailed investigations into the firms’ financials with professional chartered firms and found prima facie proofs. The five life firms are Meghna Life Insurance Company, National Life Insurance, Pragati Life Insurance, Sunflower Life and Padma Islami Life Insurance. Earlier in late 2015, the insurance regulator appointed five audit firms for investigation on specific terms of reference. They submitted their reports sometime in January 2016, after the investigation in three consecutive years: 2012, 2013, and 2014. The IDRA in its notices has now asked them to give reply to the same by May 05 next. People familiar with the developments told the FE that the Authority could take stern actions against the firms if they failed to give satisfactory reply.
National Insurance makes stock market debut today
Bangladesh National Insurance Company Limited, which completed a BDT 177.0 million public offer nearly one month back, will list its shares on stock exchanges today. It will be the 48th company to be listed with the Dhaka Stock Exchange (DSE) in the insurance sector that accounted for over 3% of the total DSE market capitalization. In a statement, the DSE yesterday said the shares of National Insurance will be traded on the exchanges under the trading code of ‘BNICL’. The BDT 177.0 million public float, which closed on February 25 last, was oversubscribed by 40 times to BDT 7070.0 million, according to the company. The non-life insurer had said the proceeds from issue would be utilized for repayment of bank loans, business expansion, meeting working capital requirements and IPO expenses. It got the initial public offering approval on May 12, 2015, for selling 17.7 million ordinary shares at an offer price of BDT10 each to general public. IPO subscription of the company was supposed to begin on June 30, last year, but Bangladesh Securities and Exchange Commission suspended the IPO subscription process following an allegation raised by the Insurance Development and Regulatory Authority (IDRA).
Bangladesh among top 10 FDI hotspots in Asia Pacific
Bangladesh is placed among Asia Pacific’s top 10 Foreign Direct Investment (FDI) hotspots, according to a study by the US-based global information company, IHS Inc. The other Asia Pacific FDI hotspots are China, Indonesia, Malaysia, Vietnam, the Philippines, Myanmar, Thailand, India and Sri Lanka. Over the next decade, the Asia Pacific is forecast to be the fastest growing region of the global economy that offers the biggest potential gains for FDI, said IHS in a statement last week. It added that amongst the other South Asian economies, Sri Lanka and Bangladesh are expected to show rapid growth over the next decade. Malaysia, Indonesia, the Philippines and Thailand are expected to join the ranks of Asian nations with a Gross Domestic Product exceeding USD1 trillion by 2030. About ‘One Belt, One Road initiative’ taken by China, IHS Asia Pacific Chief Economist Rajiv Biswas said, “For the Asia Pacific region, a key long-term growth driver will be China’s ‘One Belt, One Road’ initiative.” This will be catalyzed by new infrastructure financing for Asian emerging markets into sectors such as power generation and transmission, railroads, ports and highways from the recently launched Asian Infrastructure Investment Bank, the Silk Road Fund, as well as a number of Chinese bilateral infrastructure financing commitments to a number of Asian countries, he said.
Weaving industry seeks special budget allocation: Demands tripling of cash support
Weavers have proposed the government bring the weaving industry under the central bank’s Equity Entrepreneurship Fund (EEF). In its budgetary proposals, the Bangladesh Specialized Textile Mills and Power-loom Industries Association (BSTMPIAB) also urged the government to provide 20.0% incentives on capital machinery import, keep investment ratio at 80:20 for loan and increase the cash support to 15.0% from the existing five%. The written proposal was submitted to the National Board of Revenue (NBR) by the association recently ahead of the budget for the fiscal year 2016-17, it said in a statement. The association also proposed to keep special allocation for the development of weaving industry. They argued that if investment in the weaving industry increases, it will help lessen the import of woven fabric and home textile products, thus save foreign currency, while creating employment opportunity in the country. The BSTMPIAB also urged the government not force them to set up effluent treatment plants (ETP) at the small textile mills and power-looms in Siarajganj, Tangail, Narsingdi and other districts. They also called the government for keeping allocation in the upcoming budget to establish ETP in weaving hubs at government cost, since owners of small industries owner cannot afford to spend money on this.
SIM re-registration gets a boost after court verdict
The process of SIM re-registration through biometric verification gained momentum after the court’s verdict came in favor of the government move on April 12. The number of re-registered SIMs already crossed 63.5 million, while mobile operators said the number of active connections after the completion of the process would reach a maximum of 100.0 million, which is currently more than 130.0 million. On April 12, the High Court cleared way for mobile operators to continue biometric registration of SIMs. As of March, the six mobile phone operators had 130.8 million active SIMs; of those, 48.6% completed re-registration within April 17 and users of some 10.6 million SIMs failed to match their fingerprints with those in the national identity database, officials of the telecom regulator said. The government made mandatory the biometric registration of all SIMs from December 16 last year and April 30 is the deadline to complete the process. Grameenphone is ahead of all operators in the biometric verification process, re-registering 57.5% of its total active SIMs. As of March, the market leader had 56.2 million active SIMs, 32.3 million of which had completed the registration process. Second largest operator Banglalink got 54.9% of its 31.9 million active SIMs re-registered.
GP’s net profits up 4.9%
Grameenphone’s net profits in the first quarter of 2016 increased 4.85% year-on-year to BDT 561 crore on the back of healthy growth in internet subscription and revenue. The company’s shares rose 2.42% to BDT 240.3 on Dhaka Stock Exchange yesterday. At the end of March, the lone-listed mobile operator’s revenues stood at BDT 27,600.0 million, up 9.5% from a year earlier. Data usage raked in BDT 2800.0 million, which is 10.1% of the operator’s first quarter revenues. The operator added 4.1 million internet users to take its tally of active internet users to 19.9 million. The total subscriber base came down to 56.2 million at the end of March from 56.6 million three months earlier. The biometric verification and re-registration of SIM cards have been blamed for the decline. Commenting on audit by Bangladesh Telecommunication Regulatory Commission, Mr. Rajiv Sethi said the audit is yet to start, as Grameenphone has sought some clarifications from the BTRC and the ministry. Hopefully, he said, this will be resolved with a logical conclusion.
Income tax deduction at source ignored in public sector
Government offices, in most cases, are not deducting income tax at source from salaries of the public servants having taxable income in violation of the law, revenue board officials told a seminar on Wednesday. In the seminar on ‘income tax deduction at source: role of CGA and NBR,’ participants from the Office of the Controller General of Accounts said they were not even sure whether the provision for tax deduction at source from salaries of government staff is mandatory or not. National Board of Revenue member (income tax administration) Abdur Razzak admitted that, although mandatory, the provision for tax deduction at source has remained largely disregarded in the public sector as most government officials don’t exclude income tax from their salary bills. Chief accounts officers at the ministries and divisions can ensure implementation of the provision, as employees above grade 11 have taxable income, he said. There are nearly three lakh public servants having taxable income, but, as per NBR data, only 65,000 to 75,000 of them submit income tax returns, Razzak said.
Regency to raise BDT 600.0 million from stock market
Dhaka Regency Hotel and Resort Limited held a road show on Tuesday with a view to raise around BDT 600.0 million from the capital market under the book-building method, said a news release issued by the company on Wednesday. Dhaka Regency Hotel will use the IPO proceed for business expansion by setting up a hotel of international standard in Cox’s Bazar, renovation of its existing products and services, and repaying existing bank loan, it said. LankaBangla Investments Limited and Banco Finance and Investment Limited are the issue managers of the company for the IPO. The managing director, directors and other top officials of Dhaka Regency Hotel, representatives from Dhaka and Chittagong stock exchanges, officials from registrar to the issue ICB Capital Management Limited and representatives from banks and non-banking financial institutions, merchant bankers and stockbrokers attended the road show. Dhaka Regency Hotel had initiated a process of raising fund from the capital market under the fixed price method. The company, however, changed the process to the book-building method following an instruction from the Bangladesh Securities and Exchange Commission. The stock market regulator asked 10 premium-seeking companies including Dhaka Regency Hotel to resubmit their IPO proposals under the book building method as per the newly-amended Bangladesh Securities and Exchange Commission (Public Issue) Rules, 2015.
Licenses of 20 medicine producers on the line
Parliamentary standing committee on health recommended on Wednesday cancellation of the drug manufacturing licences of 20 pharmaceutical companies which have failed to produce quality drugs despite being given repeated chances. The companies are: Exim Pharmaceutical, Avert Pharma, Bikolpo Pharmaceutical, Dolphin Pharmaceutical, Globe Laboratories, Jalpa Laboratories, Kafina Pharmaceutical, Medico Pharmaceutical, National Drug, North Bengal Pharmaceutical, Rimo Chemical, Rid Pharmaceutical, Today Pharmaceutical, Skylab Pharmaceutical, Spark Pharmaceutical, Star Pharmaceutical, Sunipun Pharmaceutical, Tropical Pharmaceutical, Drug Land and Universal Pharmaceutical. The committee also recommended cancellation of licences of manufacturing all kinds of antibiotics (non-penicillin, penicillin and cephalosporin group medicines) of 14 pharmaceuticals. The companies are: Ad-Din Pharmaceutical, Alqad Laboratories, Belsen Pharmaceutical, Bengal Drugs, Bristol Pharma, Crystal Pharmaceutical, Indo-Bangla Pharmaceutical, Millat Pharmaceutical, MST Pharma, Orbit Pharmaceutical, Pharmic Laboratories, Ponix Chemical, Rasa Pharmaceutical and Save Pharmaceutical Ltd. Moreover, the 22 companies whose licences of manufacturing penicillin and cephalosporin group of medicines were recommended for cancellation by the committee are: Amico Pharmaceutical, Aztech Pharmaceutical, Bengal Techno Pharma, Benham Pharmaceutical, Central Pharmaceutical, Decent Pharma, Dr TIM’s Laboratories, Globex Pharmaceutical, Greenland Pharmaceutical, Inova Pharmaceutical, Maks Drugs, Medimat Laboratories, Modern Pharmaceutical, Mystic Pharmaceutical, National Laboratories, Organic Health Care, Wester Pharma, Premier Pharmaceutical, Prime Pharmaceutical, Seema Pharmaceutical, United Chemical and Pharmaceutical, and White Horse Pharmaceutical Ltd.
World Stock and Commodities
|Index Name||Close Value||Value Change||Percentage Change|
|Crude Oil (WTI)*||$44.30||+0.12||+0.27%|
|Crude Oil (Brent)*||$45.92||+0.12||+0.26%|
|Dow Jones Industrial Average||18,096.27||+42.67||+0.24%|
|USD 1||BDT 78.20*|
|GBP 1||BDT 112.17*|
|EUR 1||BDT 88.33*|
|INR 1||BDT 1.18*|
*Currencies and Commodities are taken from Bloomberg.