Important Business News Extracts – December 20 2016
Fortify digital financial flows
Leading bankers, economists and experts suggested a combined move for tightening any loopholes in anti-money laundering compliances and cyber-security mechanisms to fortify financial flows. They also called upon the mobile financial services (MFS) stakeholders to come forward with a synergy to face the challenges, as a Dhaka meet stressed building safe national and regional financial networks over digital platform. The suggestions came from a SAARC-FINANCE seminar on ‘Impacts of Mobile Financial Services in the SAARC Region’, organised by Bangladesh Bank (BB) at a city hotel Monday in the wake of growing threats of financial frauds and scams.
No Mobile Financial Services (MFS) license for telcos: Bangladesh Bank
Bangladesh Bank on Monday said it would not allow mobile phone operators to run mobile financial services as the central bank follows a bank-led model in settling financial transactions through the MFS. Telecom operators will not be able to operate the MFS due to the existing rules and regulations, BB deputy governor SK Sur Chowdhury said at a SAARCFINANCE seminar on ‘impacts of mobile financial services in the SAARC region’ organized by the central bank in a city hotel. The BB regulates banks which are allowed to settle all types of financial transactions, but mobile phone operators are regulated by the Bangladesh Telecommunication Regulatory Commission, he made the remarks when representatives of Grameenphone and Banglalink wanted to know from him whether they (mobile operators) would be allowed to run the MFS. Mobile phone operators will not be allowed to settle any financial transaction as only banks are authorized to do so, Sur said.
Capital machinery imports soared 83.0% year-on-year in the first four months of the fiscal year, but industrial term-loans dropped 22% during July-September period from a year earlier, showing a mismatch between the two indicators. Capital machinery imports rose to USD 2.1 billion during the July-October period from USD 1.15 billion a year earlier, according to letters of credit settlement data from the Bangladesh Bank. LC opening for imports of capital machinery also increased 26.4% during the four-month period, meaning equipment is coming to Bangladesh for setting up new industrial units. Given the upward trend in capital machinery imports, investment is supposed to go up thanks to new industrialization or expansion. But industrial term-loan disbursement declined to BDT 130.5 billion in the July-September period from BDT 167.6 billion in the previous quarter.
Bangladesh Cable Shilpa Limited (BCSL) has failed to off-load its shares in the stock market due to shortage of paid-up capital, according to official sources. In a letter to Bank and Financial Institutions Division on Sunday, the Post and Telecommunications Division disclosed the matter. Besides, the Bangladesh Submarine Cable Company Ltd (BSCCL) collected a total of BDT 1.1 billion from two local stock markets. BSCCL offloaded its 31m shares in the stock market on 14 June 2012 at a price of BDT 35.0 per share. According to the letter, the paid-up capital of the state-run firm BCSL is below BDT 500.0 million. But the paid-up capital has to be BDT 500.0 million or more for off-loading shares in the market. At present, the paid-up capital of BCSL is BDT 80.2 million. ICB Capital Management Ltd now looks into financial situation of the BCSL for preparing it to off-load shares in the market. ICB Capital Management is now scrutinizing four years balance sheets of the BCSL. In 2015, the BSCCL tried to sell off half of its capacity to an Italian company at a very low price. BSCCL board decided to sell 4m minimum investment unit, which is equivalent to around 90 Gbps, at a price of BDT 160.0 million for the rest of the lifetime of the cable.
A new report from the Asian Development Bank has given a thumbs-up to Bangladesh’s efforts in setting up 100 special economic zones as dedicated industrial districts help attract foreign investment and boost exports. SEZs are associated with more foreign affiliates in the economy that exports, said the Asian Economic Integration Report 2016, which was released earlier this month. The ADB report, which covers 48 countries in Asia and the Pacific, examines current trends in trade, finance, migration, remittance, and other regional cooperation and integration issues, with a special chapter on the factors behind the growth of FDI in the region. In 2014, Bangladesh had only eight special economic zones (known as export processing zones) that facilitate exports compared to 14 in Cambodia, 199 in India, 10 in Kazakhstan, 1,475 in China, 312 in the Philippines and 12 in Sri Lanka.
UK willing to invest in BD’s mega infrastructure projects
The United Kingdom is eager to invest in Bangladesh’s mega infrastructure projects, as the island nation is looking to play a greater role in the country’s ongoing infrastructural expansion, the UK Prime Minister’s Trade Envoy Rushanara Ali has said. “One thing that is common for all the developing countries, including Bangladesh, is the need to have good infrastructure,” Rushanara Ali said during an interview on Sunday. The Bangladesh-born British politician, who is on her first visit to the country since taking over as the British premier’s trade envoy for Bangladesh, shared her views on the upcoming avenues for trade and investment between the two countries.
Grameenphone to lose exclusive rights to Bangladesh Railway’s fiber network
The telecom regulator has asked Bangladesh Railway and mobile operator Grameenphone to amend an agreement in a bid to open up BR’s unused fibre optic network for all operators, which is currently used exclusively by GP. Officials of the Bangladesh Telecommunication Regulatory Commission said that BR and GP had formed a committee to analyze the agreement under which GP is using 1,600 kilometres of BR’s fiber optic network exclusively. ‘After the analysis, both the parties would submit a proposal to the commission. We have asked the parties to amend clauses of the agreement which are conflicting with Railway’s NTTN license and GP’s cellular license,’ a senior BTRC official told New Age. He said that once the amendments were completed, the unused portion of the leased fiber optic network would be open for other entities. In 1989, BR under a modernization project of signaling system installed optical fiber network at 300 stations with the financial assistance of the Norwegian government. As the capacity of the fiber optic remained mostly unused, BR leased out its optical fibre network through an international tender to GP, owned by Norwegian company Telenor, in 1997.
Steel building materials see limited growth, despite potentials: Experts
The use of steel building materials in the country’s construction sector is still limited mainly due to higher import tax, speakers said at a programme Sunday. They said the sector has the potential to grow further if the rate of tax is reduced and the quality of materials is ensured. The view came at an international seminar on ‘Steel structures: Prospects and Opportunities in Bangladesh’ jointly organized by Engineers’ Institution, Bangladesh (IEB) and Steel Building Manufacturers Association of Bangladesh (SBMA) in the capital. The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) president Abdul Matlub Ahmad attended the function as chief guest, presided over by IEB, Dhaka chairman Mesbahur Rahman Tutul. International steel structure engineering experts David Peterkin Kettlewell from the United Kingdom and Selami Gurel from Turkey also spoke on the occasion, among others. The FBCCI president said many iconic establishments across the globe are being built with steel materials. The current market value of the steel building manufacturers is around BDT 40.0 billion while the sector has created 0.2 million jobs, he informed.
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