Important Business News Extracts – February 12 2017
Downward revision of savings tools’ yield rates likely
The government will review and re-fix soon the yield rates of different national savings certificates aiming to make them time-befitting, officials said. The finance minister in a letter on Tuesday last asked the senior secretary of the finance ministry to fix the date for holding a meeting in this regard, they added. “Two meetings will be held. One is on the land price for tax fixation and its collection. Another is on re-fixation of the yield rates of savings instruments. There exists a big mismatch between the yield rates of the tools and ground realities. The date of the meetings will be set within two or three days,” the finance minister said in the letter.
Islamic microfinance to deepen financial inclusion
Islamic microfinance can be used to bring marginal people under the banking umbrella as its interest-free concept would appeal to the segment, a banker said yesterday. “It would play into their sentiment,” said Rumee A Hossain, chairman of the executive committee of Bank Asia, which is gearing to roll out full-fledged Islamic finance activities. Hossain’s comments came at a seminar — expanding financial inclusion in Bangladesh through Islamic microfinance — organised by the Islamic Relief, Bangladesh (IRB) and the Central Shariah Board for Islamic Banks of Bangladesh (CSBIB) at The Daily Star Centre in Dhaka.
The amount of deposits in the bank accounts owned by schoolchildren in the country increased to Tk 982.59 crore as of September 30 from that of Tk 880.41 crore as of June 30 last year. A Bangladesh Bank official told New Age on Thursday that the deposit amount in the school banking accounts increased in the third quarter (July-September) of 2016 as banks had recently taken a number of initiatives to facilitate opening such accounts. He said that banks were now trying to open lower-cost savings accounts like students accounts that resulted in an increase in the number of schoolchildren accounts and the amount of deposits in the accounts under the school banking programme. The BB data showed that the number of schoolchildren bank accounts increased to 12.55 lakh as of September 30 from 11.82 lakh as of June 30. The number was 10.34 lakh as of December 31, 2015.
Draft guidelines set board size the subsidiary companies of the state-run banks and NBFIs at 9
Finance ministry has drafted a set of guidelines on forming board of directors of the subsidiary companies of the state-run banks and non-bank financial institutions with the provision that the size of the board would be nine-member. The ministry has recently sent the draft to the Bangladesh Bank seeking its opinion. A central bank official said that the state-run banks and NBFIs were now structuring the respective boards of subsidiary companies following their own guidelines. But the state-run banks and NBFIs will have to follow the government directives to form the board of their subsidiary companies after finalizing the guidelines, he said. Three general managers or deputy managing directors of the state-run banks or NBFIs will be attached with the board of subsidiary companies. A government high official and a chartered accountant will be appointed as member of the board of subsidiary companies. A retired official, who gathered experience as an employee of the rank of general manager or above post in a bank, will be nominated as a board member of the subsidiary company.
Local foreign exchange market continued to face upward shifts in exchange rates in the week ended Thursday. The exchange rate of the dollar is now BDT 79.20 in the inter-bank market. Bangladesh Bank continued to buy dollars from the market. The average daily inter-bank USDBDT transaction volume was about USD 50.16 million against USD 53.48 million of the preceding week.
BSEC extends suspension timeframe for margin rules provision
The securities regulator on Thursday took a number of decisions including further extension of the timeframe for suspension of effectiveness of a margin rules provision for the next six months to facilitate transaction of inactive accounts. Recently, the DSE and the DSE Brokers’ Association urged the regulator to allow stockbrokers and merchant bankers to make share transactions in their clients’ margin accounts for another year so that they could recoup the losses from the market crash of 2011. Now the discretionary power will allow stockbrokers and merchant bankers to make buy-sell decisions without asking the clients for additional funds, in an effort to hold back the downward trend in the market. A margin account is an account offered by merchant banks and brokerage houses that allows investors to borrow money for buying securities. As per section 3(5) of the Margin Rules-1999, a stockbroker or a merchant bank is not allowed to make any new transaction in the margin account if the equity falls below 150.0% of the debit balance. The BSEC in 2013 suspended the clause until March of the following year. Since then, the regulator has been extending the timeframe by issuing directives time to time. Meanwhile, the BSEC at Thursday’s meeting also approved the initial public offering (IPO) proposal of Nurani Dyeing & Sweater Limited which will raise BDT 430.0 million from the public using the fixed price method. As per the regulatory approval, Nurani Dyeing will offload 43 million ordinary shares at a face value of BDT 10.0 each. The targeted size of the fund will be BDT 2.0 billion and the face value will be BDT 10.0 per unit. BDT 200.0 million will be collected from the sponsor and remaining BDT 1.8 billion will be raised through unit sales.
The country’s overall trade deficit widened by 25.0% or USD 902.0 million in the first half (H1) of the current fiscal year (FY) following higher growth of import payments than export earnings, officials said. The trade gap rose to USD 4.51 billion during the July-December period of the FY 2016-17 from USD 3.6 billion in the same period of the last fiscal, according to the central bank’s latest statistics, released Thursday. The overall import payments including export processing zones grew by 8.19% to USD 20.92 billion in the H1 of the FY 17 from USD 19.34 billion in the same period of the FY 16. The central banker expected that the upward trend of imports may continue in the coming months for implementation of the different infrastructure development projects across the country. On the other hand, the overall export earnings including export processing zones grew by 4.33% to USD 16.41 billion in the first six months of the FY 17 from USD 15.73 billion a year ago. The central banker said higher deficit along with falling trend of inward remittances has pushed down the current account deficit balance further during the period under review. The country’s current account deficit reached at USD 793.0 million in the H1 of the FY 17 from USD 1.85 billion surplus in the same period of the last fiscal.
Rapid pick up in Jan overseas jobs as KSA boosts hiring
A record 81,434 Bangladeshi workers found overseas jobs in January led by Saudi Arabia, the government data has revealed. The oil-rich kingdom recruited more than half or 42,272 workers last month. The Arab country hired 143,913 Bangladeshis in 2016. The overall figure represents the highest monthly overseas employment in the last seven years. The number of outbound jobs was 32,924 in January in 2011, according to data of state-run Bureau of Manpower Employment and Training (BMET). The figure also showed that some 67,738 workers went abroad with jobs in January of 2012, 38,337 of 2013, 34,200 of 2014, 28,333 of 2015 and 63,998 of 2016. Sector insiders said the number of outbound jobs increased after the resumption of visa for male workers by the Kingdom of Saudi Arabia (KSA). The job figure will rise further soon as Malaysia has also started the recruitment process of workers from Bangladesh.
July-November revenue falls BDT 56.0 billion short of target despite growth
Revenue collection by the National Board of Revenue fell short of target by BDT 56.4 billion or 8.11% in the first five month of the current fiscal year as the target was ‘colossal’ and the country witnessed slower-than-expected economic activities in the period. The collection, however, grew by 16.51% or BDT 90.6 billion in the July November period of the FY 2016-17 compared with that in the same period of last fiscal year. Taxmen managed to collect BDT 639.2 billion in value-added tax, income tax and customs duty in the five months against the target of BDT 695.6 billion, according to the NBR data. Officials of the NBR said that the government set a whopping revenue collection target at BDT 2.0 trillion for the entire fiscal year, which is BDT 476.3 billion or 30.6% higher than the earnings posted in the previous year. In the FY 2015-2016, the NBR collected BDT 1.6 trillion in taxes. Revenue generation on an average grew by 14.4% in last five years, the data showed. The economy is not performing in line with the projections on which the excessive collection target was set, NBR officials said. All the NBR wings — income tax, VAT and customs duty — failed to achieve their respective targets for the period because of sluggish economic activities in the country though the wings aggregately collected in the five months around 32.0% of the total target set for the entire fiscal year, they said. According to the NBR data, the customs wing collected BDT 201.9 billion, VAT BDT 249.5 billion while income tax collection stood at BDT 187.8 billion in the July-November period. The collection target from customs duty, VAT and income tax were BDT 209.3 billion, BDT 270.5 billion and BDT 215.8 billion respectively.
E-tracking made mandatory for export, import containers
The National Board of Revenue has made mandatory the use of electronic seal and lock, an e-tracking technology, while transporting containers stuffed with export and import goods to the Chittagong Port from private inland container depots and to the ICDs from the port. The revenue board on January 19 amended the Electronic Seal and Lock Services Rules-2016 just after two and a half months of framing the rules and made the services mandatory for exporters and importers. Earlier on November 3 last year, the NBR issued the rules introducing electronic seal and lock services for the first time in the country for security purposes. Under the system, private service providers will ensure security of containers, covered vans and trucks laden with export and import goods during their transportation from the Chittagong Port to ICDs, known as off-docks situated in the port city, and vice versa. Source:http://www.newagebd.net/article/8958/e-tracking-made-mandatory-for-export-import-containers
Garment exports to UK drop amid Brexit fears
Garment shipments to the UK, Bangladesh’s third largest export destination, declined 5.19% in the first half of 2016-17 in what can be termed as a harbinger of the Brexit fallout, expected to take effect in 2019. Between July and December last year, Bangladesh’s garment exports to the UK stood at USD 1.5 billion, according to data from the Export Promotion Bureau. The Britons voted to withdraw from the European Union on June 23 last year. And following the shock decision the value of the pound tumbled. The decline in the value of the pound sterling stoked inflation, which hit its highest level in more than two years in December 2016. In fiscal 2015-16, Bangladesh’s garment exports to the UK soared 21.37% to USD 3.52 billion.
Bangladesh’s apparel export to the United States (US) dropped marginally in the last year, according to the latest statistics of the Office of Textile and Apparel. It showed that the value of apparel import from Bangladesh by the US stood at US $ 5.30 billion in 2016 which was $5.40 billion in 2015. Thus Bangladesh’s export of apparel to the US declined by 1.8 per cent in the last year. In fact, except Vietnam, all the top-10 apparel exporting countries faced downward trend in export last year.
Australian oil and gas major Santos has started its maiden drilling in Bangladesh’s offshore Magnama structure under a joint venture with state-run Bapex, Energy Secretary Nazimuddin Chowdhury said Thursday. He said the drilling programme at Magnama commenced a couple of days ago aiming to discover hydrocarbon to meet the country’s mounting demand for natural gas. Mr Chowdhury was speaking as a moderator at a plenary session titled ‘New Energy Realities: Building a Resilient and Low carbon Future’ jointly organized by International Chamber of Commerce (ICC) Bangladesh, the Ministry of Commerce and United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) at a city hotel. The programme was held under the umbrella of Asia Pacific Business Forum (APBF). Speaking on the occasion, the secretary of Energy and Mineral Resources Division (EMRD) also said solar and wind energy is not suitable for Bangladesh. Terming liquefied natural gas (LNG) a main parameter of the country’s future energy equation, he asked the commercial banks to patronize the investors in the LNG sector.
Sri Lanka seeks Bangladesh investment in pharma industry
Visiting Sri Lankan industry and commerce minister Rishad Bathiudeen has called upon the Bangladeshi investors to invest in pharmaceutical industry in Sri Lanka. ‘Bangladeshi pharmaceuticals are of international standard which are being exported to more than 200 countries,’ he said while meeting with a Dhaka Chamber of Commerce and Industry team led by its president Abul Kasem Khan at the Sonargaon Hotel in Dhaka on February 9, said a press release. Rishad led the Sri Lanka Bangladesh Chamber of Commerce and Industry team. Among others, Sri Lankan high commissioner in Dhaka Yasoja Gunasekera and SLBCCI president Najith Meewanage were present in the meeting. Despite having good relation between Bangladesh and Sri Lanka, Kasem said the bilateral trade between Bangladesh and Sri Lanka ‘is far from Bangladesh’s expectation’. ‘In 2015-2016, Bangladesh imported from Sri Lanka for only USD 45.016 million as against USD 30.5 million exported to Sri Lanka,’ he added. In order to deepen the existing level of bilateral trade, sensitive products list under South Asian Free Trade Area needs to be revised, he said.
Grameenphone has sought permission from the telecom regulator to establish a subsidiary company for its network infrastructure such as towers, energy equipment and civil works, following the footsteps of Robi and Banglalink Banglalink made a similar application in December last year and is awaiting the verdict of the Bangladesh Telecommunication Regulatory Commission. The telecom regulator two years ago allowed Robi to set up a similar subsidiary, edotco, which has about 9,000 towers in its books and is sharing with different mobile operators.
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