Private credit growth continues to fly low
Private sector credit growth continued its downward course in May after many banks sincerely adopted a ‘go slow’ policy in disbursing fresh loans. In May, private sector credit growth stood at 17.60 percent, down from 17.65 percent registered a month earlier but still higher than the central bank’s target of 16.30 percent set for the second half of fiscal year 2017-18. The credit growth is likely to be stagnant in the near future because of the decision taken by banks to bring down the lending rate to a single digit, said Syed Mahbubur Rahman, chairman of the Association of Bankers, Bangladesh. “Banks are now observing the trend of their deposit mobilisation. They may take the decision to disburse loan considering their liquidity position,” said Rahman, also the managing director of Dhaka Bank. Credit growth is still higher than the central bank’s target, so it will not be appropriate to say that growth plunged into a negative zone, said AB Mirza Azizul Islam, a former caretaker government adviser. Private investment-to-GDP ratio has been facing a sluggish trend for a long time even after large amounts of loan were disbursed by banks, Islam said. At the end of May, the total outstanding private sector credit stood at Tk 8.92 lakh crore.
Mutual funds trading below face value
Most of the mutual funds have been trading at lower than their face value for several years now as poor performance and mismanagement by fund managers spoiled investors’ appetite. Of the 37 close-end funds on the premier bourse, 31 are trading below their face value. Even more, funds are trading on the price that is 34.3 percent lower than their net asset value (NAV). Of the 37 funds, NAV of 22 at market price is lower than the NAV at cost price, according to data from AIMS of Bangladesh Ltd. The NAV at market price of nine funds is more than 20 percent lower than their NAV at cost price. There are 37 closed-end and 41 open-ended mutual funds of Tk 6,100.9 crore and Tk 3,722.1 crore respectively.
DSE turnover crosses Tk 9.0b mark
Stocks extended their gaining streak for the second day in a row with turnover on the major bourse crossing Tk 9.0 billion-mark, powered by investors buying spree. At the end of the session, DSEX, the prime index of the Dhaka Stock Exchange (DSE), went up by 53.16 points or 1.0 per cent to settle at 5,362. The DS30 index, comprising blue chips, soared 24 points to settle at 1,926 and the DSE Shariah Index advanced nearly 16 points to close at 1,261. Turnover, the most important indicator of the market, also rose to Tk 9.02 billion, which was nearly 22 per cent higher than the previous session’s Tk 7.41 billion. Of the traded issues, 192 closed higher, 107 lower and 40 issues remained unchanged on the DSE trading floor. The newly listed Bashundhara Paper Mills continued to top the turnover chart with 3.21 million shares worth Tk 588 million changing hands. The port city bourse also returned to higher with its All Share Price Index–CASPI–soaring 143 points to settle at 16,504 and the Selective Categories Index–CSCX–advancing 90 points to finish at 9,984. The gainers beat losers as 156 issues closed higher, 71 ended lower and 23 remained unchanged on the CSE. The port city bourse traded 16.55 million shares and mutual fund units worth more than Tk 1.36 billion in turnover.
Weekly analysis: Stocks extend losses for fourth week
Stocks extended losses for the fourth straight week that ended on Thursday despite the investors showed buying appetite in the last two sessions. The week featured four trading sessions as the market remained closed on Sunday due to bank holiday. Of them, first two sessions lost 132 points while last two recovered 89 points. Week-on-week, DSEX, the prime index of the Dhaka Stock Exchange (DSE), went down by 43 points or 0.80 per cent to settle at 5,362. The financial institution posted the highest loss of 4.1 per cent, followed by banking with 2.80 per cent, pharmaceutical 2.50 per cent, cement 1.8 per cent and food & allied 1.10 per cent. The two other indices also ended lower. The DS30 index, comprising blue chips, fell 33 points to finish at 1,926 and the DSE Shariah index lost 2.48 points to end at 1,262. The Chittagong Stock Exchange (CSE) also finished lower with the CSE All Share Price Index – CASPI -shedding 54 points to settle at 16,504. The Selective Categories Index – CSCX – also lost 25 points to close at 9,984. Total turnover on the DSE stood at Tk 30.56 billion, registering a decline of 14 per cent, from Tk 35.42 billion in the previous week, as last week saw four sessions instead of previous week’s five. The daily turnover averaged Tk 7.64 billion, which was 8.0 per cent higher than the previous week’s average of Tk 7.08 billion.
BD pays $1.27b to ACU for May-June imports
Bangladesh has made a routine payment of US$ 1.27 billion to the Asian Clearing Union (ACU) against the imports during May-June period of this calendar year. After the payment, the country’s foreign exchange (forex) reserve again fell below $ 32 billion on Wednesday. It happened after nearly two months due to higher import payment pressure on the economy. The forex reserve came down to $ 31.93 billion on the day from $ 33.17 billion of the previous working day. It was $ 31.94 billion on Thursday, according to the central bank figures. On May 09, the forex reserve came down to $ 31.92 billion after making the ACU payment for March-April period from $ 33.23 billion of the previous working day. Bangladesh is now importing different consumer items, cotton, raw materials and capital machinery from the ACU member countries, particularly from India, Pakistan and Bhutan. The central bank has resumed providing the foreign exchange backup in the recent months through selling the US currency to the banks directly to keep the market stable. A total of $ 37 million was sold since July 02 of the current fiscal year (FY), 2018-19, to the commercial banks as part of its ongoing support.
NBR receipts grow 20pc
The National Board of Revenue missed its collection goal in the just concluded fiscal year despite logging about 20 percent growth in receipts, said an official citing provisional figures. The final collection could be Tk 205,903 crore in 2017-18 against the revised target of Tk 225,000 crore. In 2017-18, VAT and income tax accounted for 70 percent of the overall collection. Collection of VAT, mainly from domestic trade and economic activity, grew 23 percent to Tk 78,335 crore from a year ago, according to provisional data. Income tax receipts soared 22 percent to Tk 66,003 crore in the last fiscal year while collections from import tariff rose 13 percent to Tk 61,565 crore, said the official. The government has given the NBR the task of collecting Tk 296,201 crore for the new fiscal year, up 43 percent from the provisional collection in the last fiscal year.
NBR retains mandatory use of e-tracking tech despite business opposition
The National Board of Revenue has retained the mandatory use of electronic seal and lock, an e-tracking technology, on export-import containers for both way transportations between Chittagong Port and private inland container depots despite strong opposition from businesses. The NBR on June 26 framed the new Electronic Seal and Lock Service Rules 2018 with immediate effect after the previous rules expired in January. All trade bodies and all other major business organizations were demanding abolition of such rules. They argued that the mandatory use of the technology would increase the cost of doing business in the country. Amid these developments, the new rules have kept all the provisions of the previous rules, including schedule of tariffs, unchanged. The NBR will prepare a list of service providers based on applications and the enlisted service providers will operate based on build-own-operate method, the rules said.
Foreign aid in pipeline: $44b
Unused foreign aid has reached a new high of $44.51 billion despite a record disbursement of development assistance in the last fiscal year, data from the Economic Relations Division showed. According to the ERD data, the foreign aid in the pipeline was $35.75 billion on June 30, 2017 and rose 24.50 percent to $44.51 billion a year later. The ministries and divisions could utilize a record amount of foreign aid of $6.1 billion in the just concluded fiscal year. The government has targeted to disburse $7.5 billion in 2018-19. According to the ERD data, the government utilized $3 billion to $3.6 billion in foreign aid per year in the four years from 2012-13 to 2016-17. Russia committed $11.38 billion for the Rooppur nuclear power plant project. Of the funds, $1 billion was spent in 2017-18 and the rest will be spent by 2023-24, the year when the plant is supposed to be fully implemented. In the last fiscal year, the country received a commitment of $14.86 billion, with China and India accounting for $4.35 billion and $4.5 billion respectively.
Germany overtakes US as top RMG export market of Bangladesh
Germany has overtaken the United States, for the first time, as the largest export market for Bangladesh’s readymade garment in the just concluded financial year (2017-18). RMG export to Germany in FY18 stood at $5.58 billion against $5.35 billion in earnings from the US market, according to Export Promotion Bureau data. A moderate growth (8.65 per cent) of RMG export to Germany in FY18 from $5.13 billion in FY17 against a meagre growth (2.84 per cent) in the US market from $5.20 billion in FY17 resulted in the German market overtaking the US market. Experts and exporters said that due to strong economic activities in Europe, especially in Germany, and preferential treatment received by Bangladeshi exporters, Europe’s largest economy became the largest market for Bangladeshi garment products, surpassing the world’s largest economy. Despite a sluggish export growth trend in the US over the year, the country narrowly remained as the largest export market for Bangladesh in FY18 considering all products. Export to Germany grew by 7.58 per cent to $5.89 billion from $5.47 billion.
Export of jute, jute goods witness steady growth
Export of jute and jute products has maintained a steady growth as the country exported jute and jute goods worth $1.02 billion in fiscal year 2017-18 (FY18), up 6.56 per cent from $962.4 million in fiscal year 2016-17 (FY17). According to Export Promotion Bureau (EPB), the country fetched $155.6 million from raw jute export, $687.7 million from jute yarn and ‘kundali’, $122.8 million from jute sack and bag and $99.3 million from other jute products. According to BJMC, there are 22 jute mills in operation under public sector while the number of jute mills in private sector is around 200. Major buyers of Bangladesh jute and jute products include Belgium, Canada, the USA, the UK, China, Italy, Germany, India, Iran, Japan, Malaysia, Mexico, the Netherlands, Poland, Pakistan, Brazil, Russia, Saudi Arabia, Portugal, Thailand, Turkey, South Africa and Romania.
H1 outbound jobs nosedive by 25pc
The number of Bangladeshi workers going abroad with jobs dropped by about 25 per cent in the first half (H1) of the current calendar year (2018) compared to that in the corresponding period of the previous year, official statistics has revealed. During the January-June period of 2018, a total of 392,250 local workers went to different countries across the world with jobs. In H1 of 2017, the total number of the country’s outbound workers was 520,490, according to the Bureau of Manpower Employment and Training (BMET) data. The number dropped this year, as the demand for foreign workers has declined significantly in the Kingdom of Saudi Arabia (KSA), the largest job market for Bangladeshis last year. More than 550,000 Bangladeshis went to the Arab country with jobs in 2017, as per the BMET data. But KSA hired only 144,568 workers from the country in the first six months of the current calendar year. Saudi Arabia has recently banned 12 categories of jobs for the foreign workers. It has curbed the recruitment of Bangladeshi workers there, affecting the country’s overall foreign employment. In the first six months of the current year, Qatar recruited 40,182 workers from Bangladesh, Oman 37,565 workers, and Kuwait 19,416 workers. Kuala Lumpur suspended manpower recruitment from Bangladesh through ‘G2G Plus’ system in the last week of June. More than 11 million Bangladeshis had gone abroad with jobs since 1976, BMET data showed.
Govt to conduct 5G test run in July
The government has initiated a move to go for a test run of 5G mobile phone services in July to understand the newly emerging technology which is yet to be launched anywhere in the world. According to the Groupe Speciale Mobile Association (GSMA) report, to qualify for a 5G a connection should meet most of the eight criteria. The criteria include 1-10 Gigabyte per second connections to end points in the field that would allow a user to download a high-definition movie within 4-40 seconds whereas it requires around 3.5 minutes to download such movie by using 4G technology. The criteria also include one millisecond end-to-end round trip delay, 100 per cent coverage and 90 per cent reduction in network energy usage. According to officials of Bangladesh Telecommunication Regulatory Commission, the leading mobile technology vendor in Bangladesh, Huawei, is expected to conduct a daylong trial run of the fifth generation technology with the help of two mobile operators Robi and Teletalk at the Sonargaon Hotel in the capital on July 25.
Local and Global Stock Indices *
|Index Name||Close Value||Value Change||Percentage Change|
World Commodities *
|Commodity||Close Value||Value Change||Percentage Change|
|Crude Oil (WTI)||$73.80||↓0.04||↓0.05%|
|Crude Oil (Brent)||$77.11||↓1.13||↓1.44%|
Major Currencies Exchange Rates Movement in Last Seven Days *
|USD 1||BDT 83.63|
|GBP 1||BDT 111.09|
|EUR 1||BDT 98.24|
|INR 1||BDT 1.21|
*CURRENCIES AND COMMODITIES ARE TAKEN FROM BLOOMBERG.