Non-performing Loans (NPLs) jump 19.0% in six months to June
The volume of non-performing loans (NPLs) jumped by over 19.0% or BDT 119.8 billion at the end of June this year from December closing last year, despite close monitoring by the central bank. The amount rose to BDT 741.5 billion as on June 30, 2017 from BDT 621.7 billion as on December 31, 2016. The amount of NPLs was BDT 633.7 billion a year before. Bankers attributed the substantial rise in NPLs to lax loan recovery drive in the January-March period of this calendar year (Q1) and less rescheduling in the six months period to June this year.
Falling interest rates leave no bearing on apartment sales
The reduced rates of interest on housing loans have hardly made any impact on sales of flats as around 10,000 apartments still remain unsold, according to realtors. Many members of the apex body Real Estate and Housing Association of Bangladesh (REHAB) have not renewed their memberships this year. Not a single realtor has joined the REHAB as a new member despite the commerce ministry’s directive for its mandatory membership for running housing business. But realtors and experts are optimistic. They think declining interest rates will certainly have a positive impact in business but it will take time.
Agent banking on a roll as accounts top 0.7 million
Agent banking in the country’s banking sector continues to gain popularity among the rural people as the clients are now allowed to keep deposit and withdraw the cash through the outlets operated by the agents without entering in the branches of banks. The amount of deposit kept by the clients in the agent banking system increased to BDT 4.8 billion as of March 31, 2017 from BDT 3.8 billion as of December 31, 2016, according to the latest Bangladesh Bank data. The number of outlets operated by the agents increased to 3,023 as of March 31, 2017 from 2,601 as of December 31, 2016. The number of accounts in the agent banking system also increased by 31% to 7,12,499 as of March, 2017 from 5,44,536 as of December, 2017. Agent banking offers limited banking and financial services to the underserved population by engaging representatives under a valid agency agreement. It is the owner of an outlet who conducts banking transactions on behalf of a bank. Agents provide services such as cash deposits, withdrawals, remittance disbursement, small value loan disbursement and recovery of loans, and cash payments under the government’s social safety net programmes.
Saudi hiring sends overseas jobs jumping 41.0% in Jan-July
Led by Saudi Arabia, overseas employment jumped by more than 41% in the seven months to July compared with the same period last year, according to official statistics. Some 596,705 workers went abroad with jobs in the January-July period of 2017, up by 175,489 workers from 421,216 in the corresponding period of 2016, the state-run Bureau of Manpower Employment and Training (BMET) data showed. Sector insiders and officials said that the trend in outflow of Bangladeshi workers is expected to continue throughout the year. If the trend in recruitment continues, more than 1.0 million workers will get job this year, they predicted. In the last seven months, Saudi Arabia hired the highest 341,294 workers, followed by Oman 57,633, Qatar 57,707and Kuwait 31,225.
Government changes incentive structure for exports
The government has brought some major changes to the incentive structure for exports in order to achieve a higher overseas sales target set for the current fiscal year. Bangladesh Bank on Thursday released an incentive structure for 2017-18, granting stimulus to five sectors for the first time and increasing existing rates for four. With the new additions, 27 sectors will receive 2 to 20% incentive on the price of the goods. The number of sectors entitled for the benefit was 22 in the last fiscal year. The five new sectors which were awarded higher incentives are IT-enabled services and hardware (10%), shoes made of synthetic and fabrics (15%), active pharmaceuticals ingredients (20%), accumulator battery (15%), and goods produced from coconut fiber (20%).
Fresh move on to bring MNCs to share market
The government has taken a fresh move to bring multinational companies running their businesses profitably in Bangladesh to the capital market as it thinks that the market has now got a much more solid ground compared to any other time, reports UNB. The Finance Ministry has sent a letter to various ministries, regulatory bodies, National Board of Revenue (NBR), Bangladesh Bank, Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) in this regard. While speaking at a pre-budget discussion with the Economic Reporters’ Forum on May 13, Finance Minister AMA Muhith said time has come to bring the multinational companies to the capital market. “There were no rules and regulations and laws for the share market, but the stock market has bounced back and it is no more a kerb market,” he said.
Energy likely to be threefold costlier over next 10 years
Country’s energy prices might see a threefold hike over next 10 years as the government opted for importing ‘expensive’ liquefied natural gas (LNG) from next year. The discussants, however, opined that upgrading the efficiency levels of equipment might come in aid to check the tariff rises. The speakers also stressed retiring inefficient power plants, including the age-old gas-fired ones, and augmenting overall electricity generation apace with demand to keep the energy prices at tolerable level. Otherwise, the government would have to sit on overcapacity in terms of electricity generation, resulting in further hike in tariffs, they feared. The speakers suggested market-based pricing of energy in a transparent mechanism and avoiding the policy of popularizing any particular type of fuel at the cost of others.
BDT 32.0 billion revolving fund soon to finance LNG import
The government has moved to form a revolving fund worth BDT 32.0 billion to meet initial import cost of liquefied natural gas (LNG) meant for catering a growing energy demand. The money, equivalent to USD 400.0 million, for this proposed fund is likely to come from the ‘Energy Security Fund’ earlier established to help finance future energy projects to avert energy shortfall, officials said. At present, over BDT 35 billion has accumulated in the Energy Security Fund from higher-rated fuel sales to the public. Bangladesh plans to start LNG import by April 2018 to bring about a better energy mix against the backdrop of depleting domestic gas reserves. The country’s first LNG-import terminal, with a capacity of 3.75 million tonnes per year, is being developed by US-based Excelerate Energy and is expected to be commissioned in April 2018. A second terminal, which will also come with a capacity of 3.75 million tonnes a year, is being developed by Summit Group and is expected to be commissioned by end of 2018.
Grameenphone appoints Karl Erik Broten as CFO
Mobile telecom operator Grameenphone has appointed Karl Erik Broten its Chief Financial Officer (CFO). Broten is going to take charge from September this year, replacing Dilip Pal, according to a press release from Grameenphone on Thursday. Karl Erik Broten had been serving as CFO of Telenor’s Malaysian operation DiGi before his appointment as the Grameenphone CFO. He was CFO at Telenor Pakistan and Telenor Hungary (formerly, Pannon GSM). With over 20 years of experience in Telenor Group he has also held leadership positions in Telenor Norway, Telenor Business Solutions, and in Telenor-owned operations in Russia, among others.
Local and Global Stock Indices
|Index Name||Close Value||Value Change||Percentage Change|
|Commodity||Close Value||Value Change||Percentage Change|
|Crude Oil (WTI)*||$48.51||↑1.42||↑3.02%|
|Crude Oil (Brent)*||$52.72||↑1.69||↑3.31%|
Major Currencies Exchange Rates Movement in Last Seven Days
|USD 1||BDT 81.18*|
|GBP 1||BDT 104.47*|
|EUR 1||BDT 95.47*|
|INR 1||BDT 1.27*|
*CURRENCIES AND COMMODITIES ARE TAKEN FROM BLOOMBERG.