Bangladesh Bank report: Banks perform well in Oct-Dec period
Bangladesh banking sector’s performance indicators demonstrated remarkable improvements during the October-December period of 2015, said Bangladesh Bank quarterly report, attributing the figures to an increase in economic activities after the end of political unrest. The return on asset (ROA), a basis to measure profitability, increased to 0.8% from 0.6% a year earlier, the report said. Return on equity (ROE) in the banking industry also increased to 10.5% from 8.1% during the period. Another positive development was that monthly interest rate spread for all banks, the difference between monthly weighted average interest rate of advances and deposits, also remained below 5%.The central bank also presents impressive outlook for the January-June period of 2016 due to rises in domestic demand and prospective food production, and return to a stable political situation.
Source : http://www.dhakatribune.com/business/2016/apr/27/bb-report-banks-perform-well-oct-dec-period#sthash.TxJYZQjz.dpuf
Defaulted industrial loans post 17.77% rise in H1
The total amount of defaulted loans in the industrial sector in the July-December period was BDT 29.8 billion higher than that in the same period of the previous fiscal year, 2014-15, due to a dull business environment and a lack of effective loan recovery measures by the scheduled banks and the non-bank financial institutions. According to the latest Bangladesh Bank data, the defaulted industrial loans stood at BDT 197.5 billion in the first half of FY2015-16, rising by 17.77% from that of BDT 167.7 billion in the same period of FY15. An economist and some BB officials said industrial sector faced a major setback in recent months due to political uncertainty and absence of law and orders that ultimately fuelled the defaulted loans in the sector. ‘One of the main causes of the defaulted loans rising in the industrial sector was political uncertainty and absence of law and orders,’ Former interim administration adviser Mirza Azizul Islam told New Age on Tuesday. He said the country had witnessed a number of high-profile murders which created uncertainty in the business sector. Mirza Azizul said some clients had taken working capital loans from the banks, but they might not have invested the funds in the areas intended for, resulting in the inflation of defaulted industrial loans in the first half of FY16.
Source : http://newagebd.net/225158/defaulted-industrial-loans-post-17-77pc-rise-in-h1/
Bangladesh poised to be a top investment destination
Policymakers and business leaders from Bangladesh yesterday reiterated the country’s potential as a top investment destination after China and India. The necessary conditions for taking off the Bangladesh economy have been created, said Finance Minister AMA Muhith in his keynote speech at the fourth Bangladesh Investment Summit, Asia, held at Ritz-Carlton Hotel in Hong Kong. “Never before, Bangladesh was so well prepared to absorb talent, technology and investment from outside. Never before the country was so investment hungry as it is today.” The inflow of foreign direct investment into Bangladesh rose 27.19% year-on-year to USD1.45 billion in the July-February period, according to central bank data. Over the last six years, Bangladesh consistently recorded progress on various socio-economic indicators, including GDP growth, per capita income, food production, low inflation, job creation, social mobility and women’s empowerment, he said.
Source : http://www.thedailystar.net/business/bangladesh-poised-be-top-investment-destination-1215187
UNDP warns of missing out on demographic dividend
Bangladesh is now home to 105.6 million working-age people, an excellent opportunity for the country to accelerate its growth by properly utilizing the demographic dividend, reports UNB. According to UNDP’s Asia-Pacific Human Development Report 2016, the proportion of the working-age people 15 to 64 years, and 66% of its total population) in the country will increase to 70% or nearly 130 million by 2030. The report also says the number of old (60+) population is now 7.0% in the country, which will triple to 22% by 2050. More resources should be spent on education especially for higher levels and create jobs to reap benefit of the demographic dividend. Though Bangladesh has made noteworthy progress in primary education, challenges remain for secondary and tertiary education, the report says. Speaking at a press conference at a city hotel, Thangavel Palanivel, Chief Economist and Senior Strategic Adviser for UNDP’s Regional Bureau for Asia and the Pacific, said Bangladesh is having a youth bulge now with 19% of people aged between 15 and 24.
Oil slump to pull down subsidy in next budget
The negation of subsidy on petroleum in the wake of global oil slump may pull down the allocation of subsidies in the budget for the next fiscal year to BDT 230 billion from that in the original budget of the current fiscal, officials said. But this, on the other hand, is up by at least BDT 4.0 billion over the revised figure of the current financial year. The original subsidy for the current fiscal year was BDT 260 billion. The revised budgetary allocation is BDT 189.0 billion. The government has estimated much lower subsidy allocation for the next fiscal year, beginning July 01, banking on the steep fall in the prices of fuels on the international market. However, the actual amount might be up or down, which can be learnt later in the process of budget formulation. The lower estimation in terms of subsidy payments is due mainly to zero allocation for Bangladesh Petroleum Corporation (BPC) for the next year while low for the power development board. The government wants to spend more in food sector in the next fiscal year, BDT 35.0 billion, nearly 95% higher than the revised amount for the current financial year.
Source : http://print.thefinancialexpress-bd.com/2016/04/27/140128
32.0% listed companies face complexities over uniform ‘income year’
About 32% listed companies are facing some complexities in complying with the uniform ‘income year’ as per the circular issued by the revenue board. According to the circular-2015 (Income Tax) issued by the National Board of Revenue (NBR), the year-end of companies, other than banks, insurance companies and financial institutions (FIs), will be June 30. Some of the listed companies whose year-end is not June 30 have sought time and instruction from the securities regulator regarding compliance of the NBR’s circular. The Bangladesh Securities and Exchange Commission (BSEC) will sit today (Wednesday) to find out the solution for the complexities arisen in complying with the NBR’s circular. Presently, there are 291 companies listed with the stock exchanges. According to information of the Dhaka Stock Exchange (DSE), 95 companies will have to revise their income year based on June 30.
Source : http://print.thefinancialexpress-bd.com/2016/04/27/140096
LPG market to heat up
Five companies are set to roll out their liquefied petroleum gas business this year in a bid to capture the household segment of the market. The companies — Orion, Index, Navana, Sena Kalyan Sangstha and Beximco — will shell out about BDT 9.0 billion in total for their LPG plants. At present, natural gas is piped to households in Dhaka, Chittagong and some other big cities as cooking fuel. But the supply is fast depleting. The demand for LPG will certainly rise in future and the government has opened the business to the private sector to meet this impending high demand, said Salman F Rahman, vice-chairman of Beximco Group. LPG is a mixture of propane and butane that becomes liquid under pressure, which can then be stored in pressurised containers for use. It is relatively new in Bangladesh and the market is still small.Presently, seven companies supply imported LPG. The companies are: Totalgaz, Omera, Jamuna, Bashundhara, LAUGFS Gas Bangladesh (formerly known as Petredec Elpiji), BM Energy and state-owned Bangladesh Petroleum Corporation. Bangladesh consumed only 0.16 million tons of LPG in 2015, according to industry insiders. Of the quantity, 0.14 million tons were imported and 18,000 tons were generated from different government factories as a by-product.
Source : http://www.thedailystar.net/business/lpg-market-heat-1215178
New tax law to cast disruptive impact on industries: Policy Research Institute
Full application of a new VAT and SD law from July will have disruptive implications for the country’s manufacturing sector with strong resistance from the import-substitution sectors. Such fear was aired by economist Dr Ahsan H Mansur, as he pointed out that the Value Added Tax (VAT) and Supplementary Duty (SD) law 2012 would banish supplementary duty from import products in one shot from some 1,400 products. It will keep the protection for only 170 products. Immediate withdrawal of the protection levels might hurt the local industry, he told a pre-budget meet with the National Board of Revenue (NBR) on its premises Tuesday. The economist, however, said some sectors, including textiles and biscuits, do not need tariff protection. He, however, noted that other countries would not be interested to sign free-trade agreement with Bangladesh due to higher protection level to the local industry. He also suggested the taxmen streamline tax deduction at source and strengthen collection of pay-roll tax.
Source : http://print.thefinancialexpress-bd.com/2016/04/27/140129
Mobile companies want SIM tax waiver, corporate tax cut and withdrawal of VAT on internet use
Country’s mobile-phone operators urged the government to lower ‘discriminatory’ corporate tax and waive SIM tax to give people a low-tariff phoning regime. They also proposed that internet usage be made affordable to the users for a wider spread of the global information superhighway. The companies said the corporate tax levied on telecom industries is much higher than that paid by other companies. The telecom companies have to pay 45.0% tax while other non-listed companies pay 35.0%. The Association of Mobile Telecom Operators of Bangladesh (AMTOB) put forward the proposals Tuesday at a pre-budget meeting with the National Board of Revenue (NBR) on its premises. Senior secretary of the Internal Resources Division (IRD) and NBR chairman Md Nojibur Rahman chaired the meeting-one in a series meant for eliciting opinions of stakeholders to cobble together in the new budget in the making. Speaking at the meeting, AMTOB secretary-general TIM Nurul Kabir said tax on telecom sector is one of the highest in the world and that it escalates cost of doing business. The tax rate should be ‘non-discriminatory’ for the telecom companies as other companies are enjoying lower tax, he added.
Transparency International Bangladesh against legalizing undisclosed money
Expressing concern over demands from various quarters to legalize undisclosed money in the budget for the upcoming fiscal year (FY), 2016-17, Transparency International Bangladesh (TIB) urged the government to abstain from doing it. In a press statement on Tuesday, TIB termed the provision of legalizing undisclosed money unconstitutional, unethical and supportive of inequality. TIB Executive Director Iftekharuzzaman said the provision conflicts with the Clause 20 (2) of Bangladesh’s Constitution. It is also against electoral manifesto and it favors financial irregularities. A number of trade bodies have already urged the government to keep the provision of using undisclosed money in their respective businesses ahead of the national budget for FY 17. The TIB ED also said the unethical provision practically encourages corrupt practices and discourages honesty. It also sends out a wrong message that the government acts as the protector and promoter of corruption and illegality.
Source : http://print.thefinancialexpress-bd.com/2016/04/27/140121
World Stock and Commodities
|Index Name||Close Value||Value Change||Percentage Change|
|Crude Oil (WTI)*||$44.51||+0.47||+1.07%|
|Crude Oil (Brent)*||$46.28||+0.54||+1.18%|
|Dow Jones Industrial Average||17,990.32||+13.08||+0.07%|
|USD 1||BDT 78.35*|
|GBP 1||BDT 114.23*|
|EUR 1||BDT 88.57*|
|INR 1||BDT 1.18*|
*Currencies and Commodities are taken from Bloomberg.