Important Business News Extracts – February 27 2017
Banks fall short of 28 per cent (Tk 11.87 billion) provisioning in last year
Overall shortfall in provision against both classified and unclassified loans in the country’s banking system swelled by nearly 28 per cent or Tk 11.87 billion in the last calendar year. Officials said the banks ran short on the provisions following conditional rescheduling of loans. The amount of provisioning shortfalls rose to Tk 54.70 billion as on December 31 from corresponding Tk 42.83 billion of the previous year, according to latest statistics with Bangladesh Bank (BB). “Some banks have maintained more provisions against their conditional rescheduling of loans,” a BB senior official told the FE Sunday to explain the banking situation. Also, he said, a large amount of non-performing loans had been rescheduled with some conditions set by the central bank to minimise risks. Such rescheduled credits were treated as unclassified ones, but the banks were asked to maintain provisions in accordance with previous status of the loans, the central banker explained. “Fresh classified loans also pushed up the volume of provision shortfalls with the banks,” the BB official noted. Only six banks out of 57 have failed to keep requisite provisions against loans, particularly classified ones, according to officials. Of them, three are state-owned commercial banks (SoCBs) and the rest private commercial banks (PCBs).
The Dhaka bourse closed marginally higher Sunday as the investors took position, especially on banking issues amid optimism. Market insiders said the banking issues kept the market afloat as the sectors posted the highest gain of 1.81 per cent with 25 banks out of 30 listed banks closed green. “Expectation of dividend succeeded to pull the investors motivation to bank sector,” said MTB Capital, a merchant bank, in its market commentary. The market opened with a positive note and DSEX rose sharply in the mid-hour, touching the session’s high of 5,655 points and faced a steep correction which lasted till the end of the session. Finally, the broad index of the Dhaka Stock Exchange (DSE) closed the session at 5,635.1 points, marginally up by 9.8 points. The two other indices also edged higher. The DS30, comprising the blue-chips advanced 1.15 points or 0.05 per cent to finish at 2,037.35. The DSE Shariah Index (DSES) gained 2.60 points or 0.19 per cent to finish at 1,312.07. “The market witnessed a positive session with short span upbeat vibe in mid-session and closed in green zone amid optimism,” said EBL Securities, a stockbroker, in its regular market commentary. The stockbroker noted that though investors’ concern about increase of cost of doing business due to gas price hike brought correction in different sectors, buoyancy in banking sector kept the market afloat, keeping the core index above 5,600 points.
Cyber security not just tech risk, but business issue
Cyber security in banks can no longer be seen as a technological issue and it should be owned by the ‘C-suite’ of the banking institutions rather than the IT, experts said at a workshop in the capital on Sunday. Cyber risk is more than an IT issue; it is a business issue, they said during a discussion session of the Chief Risk Officer’s Forum held at the Bangladesh Institute of Bank Management (BIBM). “While information security risks have dramatically evolved over the past few decades, measures that the financial institutions take to manage them have failed to keep pace,” said Dr. Toufic Ahmad Choudhury, Director General of BIBM. “Cyber risks should be treated like other serious business risk issues and need to be viewed as an inevitable cost of doing business in today’s digital world,” he added
The government plans to reduce foreign fund spending by 17.5 percent in the revised ADP for 2016-17 although the unused money in the pipeline has reached a new high of $35.44 billion. The planning ministry will place the revised annual development programme at a meeting of the National Economic Council tomorrow. A proposal to cut the revised ADP allocation by 5.87 percent to Tk 104,200 crore from the original outlay will also be placed at the meeting, according to a ministry official. Of the amount, Tk 71,200 crore will come from the government’s own fund, which is 0.71 percent or Tk 500 crore higher than the original amount. However, the project aid has been proposed at Tk 33,000 crore which is Tk 7,000 crore less than the original amount. Unused foreign aid in the pipeline was $22.24 billion on June 30 last year, which rose to $35.44 billion in January, according to statistics from the Economic Relations Division. In the first seven months of the current fiscal year, $14.66 billion was received in new commitments, while $1.46 billion was disbursed and $13.2 billion remained unused.
The size of the budget for the next fiscal year will be Tk 420,000 crore, up 23 percent from the current annual outlay. Finance Minister AMA Muhith made the disclosure to reporters after holding a pre-budget discussion with the economists of Bangladesh Economic Association, the Bangladesh Institute of Development Studies, the Economic Research Group and the Policy Research Institute of Bangladesh at the Padma guest house in Dhaka yesterday. “At first I decided to keep the size within Tk 400,000 crore but later I increased the size to implement my plans properly,” said the minister. The size of the existing budget is Tk 340,605 crore. Muhith said GDP growth will surpass 7.2 percent by the current fiscal year and it will not come down below 7.5 percent in the future. Every year, before placing the budget in parliament, the finance minister holds pre-budget discussions with various stakeholders, but very few of their recommendations are reflected in the budget, experts said. Finance ministry officials also admitted that not many proposals are accommodated in the budget.
Leather exports to hit $5.0b-mark by 2021, hopes Tofail
Commerce Minister Tofail Ahmed said Sunday the country’s leather and leather products would register US$ 5.0 billion export earnings by 2021. “The government is providing 15 per cent cash incentive for the exports of leather products while offering additional 5 per cent incentive for those products which are being exported from Savar Tannery Industry,” he added. The minister said Prime Minister Sheikh Hasina has declared the leather and leather products “the Product of the Year-2017” at Dhaka International Trade Fair, as part of the government’s effort of prioritising a sector specially each year, reports BSS. “As part of this policy, the government is offering cash incentive to leather and leather products,” he said while addressing a press conference in a city hotel organized for the product of the year-2017. Mentioning leather as Bangladesh’s second-largest export earning sector, Tofail said: “If the trend continues, Bangladesh would emerge as one of the competitive countries in the sector globally.” Source:http://www.thefinancialexpress-bd.com/2017/02/26/62844/Leather-exports-to-hit-$5.0b-mark-by-2021,-hopes-Tofail/print
LPG to replace 70pc household gas connections: Nasrul
Seventy percent of the existing household gas connections will be replaced with LPG over the next two years, said State Minister for Power and Energy Nasrul Hamid on Sunday. “Our original plan was three years. But, one year has already elapsed. Now two years are left for the job to be done. Hopefully, we’ll be able to introduce LPG in 70 percent areas,” he said. Nasrul Hamid was talking to reporters on the sidelines of a programme marking the inauguration of ‘4th LPG Asia LPG Summit 2017’ at the International Convention City, Bashundhara, in the capital on Sunday. He also said a pricing mechanism will be introduced in consultation with private market operators for liquefied petroleum gas (LPG) over the next two months to control the prices.
First solar-powered food warehouse opened in Bangladesh
Bangladeshi prime minister Sheikh Hasina inaugurated on Sunday the country’s first solar-powered food warehouse with a capacity of 25,000 tonnes of grain in the northern part of the country. The modernised, multi-storey warehouse was built with financial and technical support from Japan. Food silos are crucial for natural disaster-prone Bangladesh to keep stocks safe from water and other threats. The world’s fourth-biggest producer of rice, Bangladesh uses almost all of its production to feed its population of 160 million, and often needs imports to cope with shortages caused by natural calamities such as floods or droughts. Bangladesh imports around 4.5 million tonnes of wheat a year to meet growing demand, while the country’s output has stagnated at about 1 million tonnes.
Country’s exporters have requested the USA and Brazil governments to consider duty-free market access for Bangladeshi readymade garments (RMG) which are made of cotton imported from the two countries. Bangladesh Garment Manufacturers and Exporters Association (BGMEA) recently sent separate letters to the authorities of US and Brazil with the request, BGMEA sources said. According to the sources, Bangladesh has been importing 2.96 million bales of cotton every year from the two countries. A letter signed by BGMEA President Md Siddiqur Rahman was sent to the US ambassador in Dhaka on February 16 while another was sent to the foreign ministry of Bangladesh on February 19. The proposal has stressed the need for a government-to-government initiative between Bangladesh and Brazil on the issue.
Bangladesh will have to address three important factors — higher productivity, workers’ wage hike and profitability — for sustainability of the apparel sector, said an economist yesterday. These three factors should work together to improve the sector’s competitiveness, said Debapriya Bhattacharya, distinguished fellow of the Centre for Policy Dialogue. There needs to be effective social dialogue to resolve some outstanding issues in the garment sector and to save the entrepreneurs, he suggested. He also suggested retailers, suppliers and other stakeholders share the remediation cost of factories to reduce the burden on manufacturers. Bhattacharya said the garment sector survived and reached its present position by overcoming major challenges, including the shock of a quota-free era, child labour, fallouts from global financial meltdown, and finally, the Rana Plaza building collapse that happened in 2013. He was moderating a discussion on ‘Pains and Gains’, a research paper on the progress made, impediments and the future of the garments sector. The Daily Star and Bangladesh University jointly organised the discussion on the outcomes of the research conducted by Wamiq Umaira and Mahmood Hussain, at The Daily Star Centre in Dhaka.
The 7th edition of ‘Denimsandjeans Bangladesh,’ an exposition of jean products, will begin in the city on March 1, aiming to attract global buyers against the backdrop of country’s capacity to supply quality products at lower costs. The two-day expo with the theme ‘Denim Mashup’ will focus the latest trend in denim where embellishments, embroideries, sequins, patches, paint etc. are used in different combinations to produce visually exaggerated hi-fashion denims, said a press release today. The Denimsandjeans team will recreate this theme using products from some of the key global denim suppliers and bring them under this theme together in the expo at Radisson Blue Water Garden Hotel on March 1-2. This trend is being taken up by global brands like Gucci, D&G, Tommy Hilfiger, Wrangler and many other companies.
Bangladesh increases participation at Gulfood 2017
Bangladesh, under the aegis of Bangladesh Export Promotion Bureau (BEPB), will showcase 35 food, drink and beverages companies in Gulfood 2017 at Dubai World Trade Centre (DWTC) from Feb 26 to March 2, 2017. The subcontinental country will focus on processed food, healthy food, fish and vegetable in the international exhibition to attract international buyers, Consul General at the Dubai Consulate General of Bangladesh S Bodriuzzaman said in Dubai on Saturday. He was speaking at a pre-exhibition press conference, held at the consulate general premises in Dubai. The press conference was also attended by Commercial Counsellor Dr AKM Rafique Ahammed, Counsellor (Labour) ASM Zakir Hossain, Director of BEPB DM Golsm Fsruque and other officials and Bangladeshi traders in Dubai. Rafique Ahammed said that Bangladesh, the largest exporter of fish has exported $600 million worth of fish products to last financial year and to the UAE the value was $429 million and wishes to increase it and find new global markets for their agro and marine products. Asked about the retail prices in the local market, the consul general said that “our prices are highly competitive and that is why our trade in flourishing in the UAE after it was introduced to this country.” “We are also aiming buyers from African and European countries during this show,” he added.
A Memorandum of Understanding (MoU) was signed in Sylhet between India and Bangladesh for undertaking three projects for the sustainable development of the north-east city. Indian High Commissioner Harsh Vardhan Shringla, Additional Secretary of the Economic Relations Division Shah Md. Aminul Haque and Sylhet City Corporation CEO Enamul Habib signed the tripartite agreement on Friday in Sylhet. Finance Minister Abul Maal Abdul Muhith witnessed the signing, the Indian High Commissioner in Dhaka said, reports bdnews24.com. The signing was the follow-up of an earlier MoU which was signed by the two governments in April 2013 for the implementation of sustainable development projects in socio-economic sectors of Bangladesh.
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