Spare Banks from stock dividend tax: Chairman, ABB
Banks have sought to be excused from the government’s plan to introduce 15 percent tax on stock dividend and retained earnings and reserves to encourage cash dividends as it will put some listed lenders in a difficult spot. Syed Mahbubur Rahman, Chairman of the Association of Bankers, Bangladesh, the platform of Private Banks’ Managing Directors said, “It makes sense for other listed Companies but not for Banks as their dividend policies are transparent and regulated.” At present, Banks that face provisioning shortfall are not allowed by the Bangladesh Bank to hand out cash dividend; they can only give stock dividend. As of March this year, 14 Banks failed to keep the required provisioning against their bad loans. Of them, 10 lenders are listed with the capital market. As of December last year, Banks’ capital adequacy ratio (CAR), which determines the adequacy of Banks’ capital in keeping with their risk exposures, stood at 10.50 percent, down from 10.83 percent a year earlier, according to data from the Central Bank.
Raising private investment to be tricky: Analysts
The government’s target to raise private investment to 24.2 percent of GDP will be challenging given the trend in last several years and the ongoing liquidity crisis in the Banking sector. Private investment has been hovering around the 22-23 percent mark for long. For instance, this fiscal year it reached 23.40 percent of GDP, up from 22.07 percent five years ago, according to the Bangladesh Bureau of Statistic (BBS). According to Abul Kasem Khan, former President of DCCI, Bangladesh needs additional Tk 23,000 crore to achieve the investment target. He also added as the banking sector is facing liquidity shortage, we don’t know where the money will come from. Private sector credit growth sank to a 56-month low of 12.07 percent in April and the government’s target to borrow more from the Banks may tighten the situation further.
Govt may take away Tk 11,000cr in tax from listed Companies reserve
The National Board of Revenue will collect at least Tk 11,000 crore in additional taxes from the reserves of the listed Companies if the Finance Bill 2019 that was placed with the budget proposal is passed, according to a Dhaka Stock Exchange analysis. Finance minister AHM Mustafa Kamal on Thursday placed the national budget for the financial year of 2019-20 where he proposed imposition of 15 per cent tax on retained earnings and reserve if the figure exceeded 50 per cent of the paid-up capital of a listed Company. As per the DSE data, there are 317 companies listed with the stock exchange. Of them, 209 companies have reserves exceeding 50 per cent of their paid-up capitals, 87 companies don’t have taxable reserves and 21 companies have negative reserves. The 209 companies have Tk 97,901.27 crore in reserves. Of the amount, Tk 71,949.6 crore falls under the new tax measure. The government would collect Tk 10,792 crore from the Companies by imposing 15 per cent tax on the amount.
BPGMEA wants VAT exemption for plastic goods
Bangladesh Plastic Goods Manufacturers and Exporters Association expressed its deep concern over the proposal of budget for the withdrawal of VAT exemption for the daily essential plastic goods. The poor and the ultra-poor would be directly affected by the imposition of VAT on plastic goods except tiffin boxes and water bottles. The plastic goods produced in around 200 small and medium factories and the products are being sold by hundreds of hawkers across the country. It is not possible to bring the hawkers under a tax structure. The imposition of five per cent VAT on the plastic goods might ruin the industry leaving more than one lakh people jobless as there was no scope to rebate the amount. BPGMEA President demanded VAT weaver facility for the plastic sector.
Bangladesh to export 0.2-0.3m tonnes of rice to Philippines
Agriculture Minister Dr Muhammad Abdur Razzaque on Sunday said the country is likely to export 0.2 to 0.3 million (two-three lakh) tonnes of rice to the Philippines. Dr Razzaque said the government has been discouraging rice import and imposed higher duty on import of the staple to protect the farmers in the country. He said Bangladeshi Businesses held discussion with importers of the Southeast Asian country regarding rice export and traders are in a position now to export 0.2 to 0.3 million tonnes of rice to the Philippines. Bangladesh is not only self-sufficient in food production but it has a surplus now. Minister mentioned, now safe and nutrition enriched food is our focus for the people because safe fruits can play a great role to meet the nutrition demand of the country.
Stocks slump on proposed tax on reserve
Dhaka stocks slumped on Sunday as investors becoming muddled following the government’s proposal to impose 15 per cent tax on the listed Companies’ reserve and stock dividend, went for selling shares. Finance minister AHM Mustafa Kamal on June 13 placed before parliament the proposal in the budget for the next fiscal year (2019-20). DSEX, the key index of Dhaka Stock Exchange, lost 0.79 per cent, or 43.47 points, to close at 5,430.83 points on Sunday after gaining 4.67 points in the previous session. The market began to dip from the very beginning on the day and descended more firmly to end the session deep into the red zone as investors frowned upon the government’s taxation policy for the listed companies.
The Prime Insurance Company won two awards
The Prime Insurance Company Ltd recently won two awards in Second Emerging Asia Insurance Award in multiple category. Mohammodi Khanam, Managing Director & CEO of Prime Insurance Company Limited, received Women in Insurance Leadership award from Sudhin Roy Chowdhury, Former Director, LICI and Ex – Member Life and another award of special recognition for Health Insurance Company of the year category from Naba Gopal Banik, Retired Member, Insurance Development & Regulatory Authority (IDRA) of Bangladesh in the “2nd Emerging Asia Insurance Conclave & Awards 2019” held in Bangkok
Mercantile Bank to start Islamic Banking service
According to AKM Shaheed Reza, Chairman of MBL, Mercantile Bank Limited is going to start Islamic Banking service soon. He also said that the Bank would open a new window to attract the customers who wanted Islamic Banking service. Mr. Reza also added a huge number of people demanded Islamic Banking service as 90 per cent of the total population were Muslim.
Ruman bags first ever medal for Bangladesh in World Archery
Bangladesh’s top archer Md Ruman Shana made history as he became the first Bangladeshi to win a medal in World Archery Championship. Ruman, who has struck a rich vein of form, bagged the bronze medal after beating Italian archer Mauro Nespoli convincingly by 7-1 sets during the recurve men bronze final in Netherlands yesterday.
Local and Global Stock Indices *
|Index Name||Close Value||Value Change||Percentage Change|
|Nikkei 225|| 21,169.52||↑52.63||↑0.25%|
World Commodities *
|Commodity||Close Value||Value Change||Percentage Change|
|Crude Oil (WTI)||$ 52.66||↑0.15||↑0.29%|
|Crude Oil (Brent)||$ 62.24||↑0.23||↑0.37%|
|Gold Spot||$1,340.09|| ↓1.61||↓0.12%|
Major Currencies Exchange Rates Movement in Last Seven Days *
|USD 1||BDT 83.0217|
|GBP 1||BDT 104.4660|
|EUR 1||BDT 93.0321|
|INR 1||BDT 1.1864|
*CURRENCIES AND COMMODITIES ARE TAKEN FROM BLOOMBERG.<