Remittances to developing nations fall in 2016 – WB: Bangladesh sees 11.1% decline
Remittances to developing countries fell for a second consecutive year in 2016, a trend not seen in three decades, according to a report by the World Bank, reports bdnews24.com. Remittances to developing countries fell by 2.4% between 2015 and 2016, from USD440 billion to USD429 billion, according to the latest Migration and Development Brief which was presented at the World Bank’s Spring Meetings Friday. Bangladesh, a major receiver of remittances, saw a decline of 11.1% in that period, while the South Asian region as a whole saw a 6.4% decrease. The report cites low oil prices and weak growth in Europe, the Russian Federation and the Gulf Cooperation Countries (GCC) as the primary factors responsible for the dip in remittance flows.
Cost for sending money from UAE to BD third lowest
Cost for forwarding cash from UAE to Bangladesh is estimated third lowest, according to a World Bank report. The World Bank has recently released the latest edition of the Remittance Prices Worldwide report. The report tracks money transfer costs across the globe, according to a report by http://gulfnews.com. Transferring cash to Sudan is estimated to cost only around Dh3.60, the lowest rate charged to remitters from the UAE. The second cheapest rate goes to expatriates sending money to Pakistan, with the total cost averaging at Dh21.63, while those from Bangladesh get the third lowest rate at Dh21.73.
Limit likely on institutional investment in savings tools
The government contemplates containing institutional investment in savings instruments as its borrowing from the non-banking sources bloats over the limit. Officials said the Department of National Savings (DNS) recently sent in a proposal to the government to restrict investment from provident fund of autonomous bodies and structured local and multinational companies (MNC) in the government savings tools. Such institutional investors account for more than 80% of aggregate investment in the five-year-term Bangladesh Saving Certificates. However, the DNS allows the institutional investors to invest only in this five-year savings tool, leaving the others for public subscription. DNS officials said the government’s net borrowings from savings certificates may not surpass its target in the event of limiting scope of institutional investment.
Devise ways to manage public investment efficiently
Bangladesh needs to identify the barriers that are preventing the country from better managing public investment and use the $35 billion in aid that has piled up, according to a World Bank official. Annette Dixon, vice president of the World Bank for South Asia, said the build-up of $35 billion in the aid pipeline is indicative of the public sector’s absorption capacity and implementation challenges. “As we have seen in recent times, despite repeated initiatives by top policymakers, Bangladesh has struggled to fully implement the annual development programme,” she told The Daily Star in an email interview.
Local foreign exchange market continued to move upward in exchange rates in the week ended Thursday. Import payments created demand for dollar which may push the USDBDT rate to BDT 80.00 levels in the coming week. The exchange rate of the dollar is now BDT 79.90 in the inter-bank market. The average daily inter-bank USDBDT transaction volume was about USD 16.95 million against USD 10.17 million of the preceding week, said a weekly analysis of CBC. Most of the banks kept their USD/BDT rates unchanged for customers this week. The USD/BDT selling rates for importers of major foreign and private banks was at BDT 81.55-82.80, while USD buying rates from exporters were at BDT 80.55-81.80. For non- commercial payments such as telegraphic transfer as donations, wage earners remittance, dollar drafts etc, the average T.T buying rate was in the range of BDT 80.55-81.88 while average T.T selling rate was at 82.09 on the last working day. USDBDT swap market in the week was active. The daily average volume of swap transaction was around USD 55.6 million.
City Bank arranges debt financing for two power plants of Summit Group
City Bank has arranged funds for setting up two heavy fuel oil-based power plants of Summit Group. The Summit Barisal Power Ltd will be of 110MW and the other one is 55MW Summit Narayanganj Power Unit II Ltd, City Bank said in a statement yesterday. Infrastructure Development Company Ltd (IDCOL), Islamic Corporation for the Development of the Private Sector (ICD) and Opec Fund for International Development (OFID) have provided the debt funding for the projects. Summit Group has borrowed USD77.64 million from these institutions under the arrangement, according to the statement. A financial closure ceremony was organised in Singapore on the successful completion of the financing arrangement. Sheikh Mohammad Maroof, deputy managing director of City Bank; Ayesha Aziz Khan, managing director of Summit Power International Pte Ltd; Anjuman Aziz Khan, director of Summit Group, and Abdul Wadud, managing director of Summit Power Ltd, attended the deal signing ceremony.
Capital market refinancing scheme: BSEC for reducing interest rate to 6.0%
The securities’ regulator has urged the government to reduce the interest rate to 6.0% from 9.0% against the loans taken under the capital market refinancing scheme. The Bangladesh Securities and Exchange Commission (BSEC) has also urged the government to extend the tenure of the refinancing scheme by two years more. The BSEC made the proposals last week in a letter sent to the ministry of finance (MoF). The regulator moved to reduce interest rate of loans in an effort to ensure complete utilisation of the fund which is yet to be disbursed against the portfolios of investors affected during 2010-11 stock market debacle. After 2010-11 stock market debacle, the government approved the capital market refinancing scheme and later the central bank disbursed BDT 9.0 billion to the state-run Investment Corporation of Bangladesh (ICB) through three equal installments.
The securities’ regulator has moved to bring further changes to the book-building method in an effort to make the public rules more time- befitting. The regulatory move came following demand of stakeholders, including stock exchanges, which are in favour of changing some clauses of rules to avert any doctoring during determination of cut-off prices of stocks. Among the stakeholders, the Dhaka Stock Exchange (DSE) already submitted a formal proposal to revise the book-building method to the Bangladesh Securities and Exchange Commission (BSEC). Book-Building Method, also known as International Price Discovery Method, is a process by which an underwriter attempts to determine what price to offer an initial public offering (IPO) based on demand from institutional investors. A top official of the securities’ regulator Wednesday said the regulator is giving importance to further modification of book- building method.
World Bank to give Bangladesh $6 billion credit in three years
The World Bank has pledged to extend $6 billion in credit to Bangladesh over next three years. Finance Minister AMA Muhith disclosed it after meeting the global lender’s Vice President for South Asia Region Annette Dixon at its headquarters in Washington DC on Thursday on the sidelines of the Spring Meeting of the World Bank Group – IMF. Muhith quoted Dixon as saying that the World Bank would provide the money in three instalments of $2 billion each in every fiscal year from 2017-18 to 2019-20.
Oil price cut to come after PM’s approval: Finance Minister
The government’s plan to cut oil prices in Bangladesh to boost economic growth is awaiting final approval from Prime Minister Sheikh Hasina, Finance Minister AMA Muhith has said, reports bdnews24.com. “The Prime Minister’s response is expected shortly.” Muhith is currently in Washington to attend the spring meetings of the International Monetary Fund (IMF) and the World Bank (WB). His comments came during a media briefing following his meeting with IMF Deputy Managing Director Mitsuhiro Furusawa at the organisation’s headquarters on Thursday. The low prices of oil on the world market had previously prompted the finance minister to promise cuts in domestic prices, but they did not come to pass.
Anti-gastric medicine market expanding fast: Aggregate market share now worth BDT 12.5 billion
High prevalence of gastroenteritis for unhygienic eating habits alongside consumption of spicy foodstuffs, in expert views, is contributing to the expansion of anti-gastric and antiulcer drugs market in Bangladesh. To bank on a robust market of these drugs in terms of sales, the medicine-makers are now using world’s latest molecules to produce anti-ulcerants. And their market share is also growing fast, according to surveys. In such a situation of ailments related to gastrointestinal disorder — some turn out to be fatal in the end — Bangladesh’s six of top ten sold branded drugs are antiulcer and anti-gastric with their aggregate market share of nearly BDT 12.50 billion. The market share is equivalent to nearly 7.0% of the total medicine market of the country, as of last December, according to US-based pharma intelligence IMS Health. The top-ten pharmaceutical products have nearly 10% share of approximately BDT 177.43 billion worth of total pharma market. Even in 2009, only three gastric and ulcer products were among the top-ten products and antibiotic and pain-killer products used to dominate the top-chart products.
Export receipts from some non-apparel sectors dropped in July-March mainly because of a gas shortage in the country, volatile economic conditions in the European Union and the effects of Brexit, according to industry people. Some of the sectors that have potential but witnessed poor earnings in the first nine months of the current fiscal year are frozen and live fish, shrimp, petroleum byproducts, finished leather, specialised textiles, ceramics, bicycles, electronics and terry towel. A volatile political and economic situation in major EU countries and Brexit put a negative impact on Bangladesh’s exports, exporters said. Europe accounts for more than 60% of Bangladesh’s total exports and is the largest destination for exporters. Kazi Belayet Hossain, vice-president of Bangladesh Frozen Foods Exporters Association, said shrimp prices declined to USD9 a kg from USD12 last year, due to the economic uncertainty in the EU. Another potential sector terry towel experienced negative growth of 12.79% to bring in USD32.59 million in the period. Export of finished leather decreased 4.79% to USD201.05 million, data showed.
NBR moves to unveil BDT 10.0 billion SIM tax dodging
Government’s revenue authority moves to do a fresh scrutiny of SIM tax payments by three mobile-phone multinationals after smelling irregularities involving BDT 10 billion. Officials said the Large Taxpayers Unit (LTU) under the Value Added Tax (VAT) wing of the National Board of Revenue (NBR) decided to audit furnished data and payments of SIM- replacement tax by the telecom operators between 2011 and 2015. A committee comprising representatives of all parties concerned has been assigned to the task of checking files of the three mobile kingpins: Garmeephone, Robi and Banglalink. The panel draws representatives of the VAT wing, the Association of Mobile Telecom Operators of Bangladesh (AMTOB), Bangladesh Telecommunication Regulatory Communication (BTRC) and the three phone operators. The committee has decided to conduct a random sampling to examine SIM-replacement data by physically inspecting the relevant accounts of the firms. However, AMTOB leaders stood opposed to the decision, claiming that SIM-replacement issue is a sub-judice matter as previous detection by the VAT wing is still pending with the NBR’s appellate tribunal. Official sources in the VAT wing, however, said they had legal backing and valid grounds to investigate the complaint.
The auction of the 4G spectrum will take place after the announcement of the national budget for next fiscal year, Finance Minister AMA Muhith said. The minister spoke after a meeting with Sigve Brekke, president and CEO of Telenor Group, which owns the majority stakes in Bangladesh’s largest mobile phone operator Grameenphone. The Telenor Group chief met with Muhith on a courtesy call on the sidelines of the World Bank-IMF Spring Meetings at Washington in the US. Since Muhith raised the allegation of frequent call drops in voice services, Brekke informed the minister that the allocated spectrum for Grameenphone had been divided into two parts– voice and data services. There are unused capacities in data services, while there are over capacities in voice services that result in the call drops, Brekke said. If the regulator gave more spectrums, the Telenor or the Grameenphone would not have to set aside something for data and something for voice services. Muhith said the 4G auction was delaying due mainly to disagreement between the Bangladesh Telecommunication Regulatory Commission (BTRC) and the operators on spectrum price. The BTRC wants to set a high price for the spectrum while the operators want it to be low, he said. The BTRC has 15 MHz of unsold spectrum in the 2100 band, 10.6 MHz in the 1800 band and some spectrum in the 900 band that was released from Airtel after its merger with Robi.
BPC pursues approval for USD 300 million ITFC loan: Objective: oil import for supply without disruption
The petroleum corporation pursues immediate government approval for a fresh USD 300 million loan from the International Islamic Trade Finance Corporation (ITFC) to finance fuel import. A senior official of the state-run Bangladesh Petroleum Corporation (BPC) said the import of crude oil is necessary for uninterrupted fuel supply. The BPC authorities sent a letter to the ministry of power, energy and mineral resources (MoPEMR) recently for taking necessary steps in this regard. Earlier, the Standing Committee on Non-Concessional Loans had given approval for a total of USD700 million in ITFC credits. The tenure of the loan is six months and the rate of interest (mark-up) 3.90% including 0.20 ITFC administrative charge annually, lower by 0.30% from the previous year’s mark-up rate of 4.20%, according to the BPC data.
Petrobangla, Summit Group sign deal for 2nd LNG terminal
A company of Summit group will install a Floating Storage and Re-gasification Unit (FSRU) at Moheshkhali Island in the Bay of Bengal, reports BSS. The state-owned Petrobangla signed Thursday a deal with Summit Liquefied Natural Gas (LNG) Terminal Company in this connection. The Summit would set up the floating storage and FSRU terminal at its own cost having 500 million meter standard cubic feet per day (mmscfd) capacity, which would go on operation after 18 months. The Bangladesh Oil, Gas and Mineral Corporation (Petrobangla) has signed the Terminal Use Agreement (TUA) and Implementation Agreement (IA) at its conference room.
Footwear market is expanding fast riding on the growing demand from a fashion forward middle class. The increasing purchasing capacity and a rising population are also buoying demand for footwear and encouraging brands to rev up efforts to grab a hold of the market, said industry insiders. Md Ruhul Amin Molla, chief executive of Orion Footwear said the per capita consumption of footwear, including leather, is 3-pairs, which was 1.7-pairs five years back. Orion entered the local footwear market two years ago to bank on this growing market that is dominated by small retail outlets across the country. Molla said the local footwear market that was worth BDT 160.0 billion in 2016 is growing 10-15% a year. Some other players said the market size stands at around BDT 70.0 billion to BDT 80.0 billion. The country consumes 300.0 million pairs of footwear annually, he added. “This is a huge sector that is dominated by the informal market,” he said, adding that the brands are expanding their foothold in the domestic market. The organised sector began to secure a growing market share after some export oriented footwear companies started opening outlets a decade ago, said operators. Earlier, Bata Bangladesh was the lone chain retailer. After the entry of Apex in 2006, others such as Bay, Jennys, Zeil’s, Leatherex, and Lotto also approached to win the hearts of consumers.
While the Chittagong seaport will continue to play the leading role, a substantial new port capacity will be needed during the seventh five year plan (FYP) and beyond, a senior official at Chittagong Port Authority (CPA) said here Wednesday. The government had considered it necessary in anticipation of the growing demand for port services emerging from growing income and international trade, CPA member (admin and planning) Zafar Alam told a press briefing at the CPA board room, ahead of the 130th anniversary of the port.
Bangladeshis highest among foreign tourists in India in March
Number of Bangladeshis is the highest among the foreign tourists visited in India during the month of March. Foreign tourist arrivals (FTAs) in India increased by 10.7 per cent with 0.91 million people visiting the country in March as compared to 0.82 million in the corresponding period the last year, the government said. The share of FTAs was highest from Bangladesh (21.31 per cent), followed by the USA (10.39 per cent), the UK (10.30 per cent) and Russia (4.26 per cent). The share from Malaysia stood at 3.41 per cent, while that of Canada was 3.28 per cent, Germany 3.03 per cent, Sri Lanka 2.91 per cent, China 2.83 per cent, France 2.79 per cent and Australia 2.54 per cent.
Rice stocks at public warehouses have fallen to 3.59 lakh tonnes, which is the lowest in six years, owing to less than targeted procurement in the last two seasons and increased distribution. Total food grain stocks stood at 5.46 lakh tonnes, the lowest since fiscal 2009-10, according to food ministry data. The low level of stocks has created worries that millers and traders may cash in on the situation by increasing prices of the staple. Rice prices edged up early this month, as large millers and traders banked on the loss of paddy at the haor regions in the country’s northwest.
Bangladesh’s wheat imports may go up to 57 lakh tonnes in 2016-17 due to record low prices in the international market and comparatively high prices in the local market, said the US Department of Agriculture (USDA) recently. The country imported 43.66 lakh tonnes of wheat in fiscal 2015-16, according to data from the Food Planning and Monitoring Unit of the food ministry. The forecast came after import of the grain rose 45 percent year-on-year to 44.75 lakh tonnes in July-March of fiscal 2016-17. The private sector accounted for 94 percent of the total wheat imports during the period, the ministry’s data showed. The USDA said Bangladesh meets 75 percent of its wheat consumption needs through imports, sourcing lower quality wheat from Russia and Ukraine, and higher quality wheat from Canada, Australia and the US. Citing trade sources, it said about 40 percent of wheat imported was sourced from Russia and 30 percent from Ukraine during 2016-17.
The government plans to provide special incentives to those involved in the agriculture and export sectors, and businesses that are creating jobs, according to the chairman of the National Board of Revenue. “The new budget will be more business-oriented and some sectors will be given special incentives as per the advice of the prime minister,” said Md Nojibur Rahman. He made the remarks at a workshop on income tax and value added tax organised by the Dhaka Chamber of Commerce and Industry (DCCI) at its auditorium in the capital. The new VAT law will be implemented from July 1, said Rahman. “It is a law of high quality and there is scope to provide incentives to businessmen. The new VAT system is mostly online-based,” he added. He said the revenue authority would introduce a mobile app to facilitate instant VAT payment through mobile phones. “We are in talks with Grameenphone to introduce a secure channel for the VAT payment through mobile phones.” The DCCI demanded a cut in the VAT rate to 7 percent from the 15 percent uniform rate planned by the finance minister.
Edison, the parent company of mobile handset brand Symphony, hopes to invest a few hundred crore taka in different sectors of the Bangladeshi economy in the next eighteen months, ranging from e-commerce to electrical appliances, says its top executive. “Our target is to increase our presence in many consumer segments,” says the group’s Managing Director Jakaria Shahid. “We aim to have a substantial larger footprint in Bangladesh within a few years.” According to its website, the group’s annual turnover stood at $298 million in 2014, with growth of 21 percent over the previous year. In 2014, the group employed more than 1,000 people.
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