Govt takes Tk 113b from state-run power, gas entities
The government has taken around Tk 113 billion (11,300 crore) from different state-run power and gas entities over the past several months during the coronavirus pandemic. The Ministry of Finance (MoF) has taken the money in several installments since March, when Covid-19 outbreak started spreading across the country.Of the total amount, paid by the state-run entities to the public exchequer, the Bangladesh Petroleum Corporation (BPC) paid around Tk 50 billion, Petrobangla around Tk 48 billion, and Bangladesh Power Development Board (BPDB) around Tk 15 billion.The government will allow the entities to keep funds for implementing self-financed projects, and to estimate their own operational cost. The Petrobangla paid around Tk 30 billion from its gas development fund (GDF), which was established mainly to bear the expenses of oil and gas exploration in local fields. The entity paid the remaining Tk 18 billion from the money it got from selling 10 per cent share of the Titas Gas Transmission and Distribution Company Ltd, said a senior Petrobangla official. The BPC, which is now making hefty profit by trading petroleum products due to lower oil prices in international market, paid around Tk 50 billion in several installments.According to the MoF, around Tk 2,121 billion was deposited with 68 state-run entities, as of February 2020.
Stocks stay flat amid thin participation
Stocks stayed flat on Tuesday while turnover dipped below Tk 1.0 billion-mark once again as investors were reluctant to make fresh investment amid ongoing Covid-19 pandemic. DSEX, the key index of the Dhaka Stock Exchange, went up by 6.26 points or 0.15 per cent to close at 3,962. Investors are also cautiously monitoring and waiting for the upcoming budget announcements before making any further investment decisions.Turnover slumped to Tk 677 million, which was 36 per cent lower than the previous day, as the investors were not showing any enthusiasm for buying of shares at the current price level due to the raging epidemic. Of the issues traded, 238 remained unchanged while only 25 issues advanced and 16 declined on the DSE trading floor. Two other indices also edged up. The DS30 index, comprising blue chips, advanced 4.24 points to finish at 1,329 and the DSE Shariah Index gained 0.35 points to close at 917.Accordingly, the pharma sector gained 0.30 per cent. The sector also grabbed 40 per cent of the day’s total turnover. A total number of 10,546 trades were executed in the day’s trading session with trading volume of 25.04 million shares and mutual fund units. The market-cap of the DSE also inched up to Tk 3,102 billion, from Tk 3,100 billion in the previous session.
A V-shaped economic recovery is still within reach
Optimism is a disease, the polemical British-Indian novelist Salman Rushdie once said, and talking with ManmohanParkash, the country director of the Asian Development Bank, one can’t help but catch that disease. He is sanguine about Bangladesh’s long-term growth; he feels the country is now where South Korea was about 30 years ago. And he is holding out for a V-shaped economic recovery from the coronavirus-induced slowdown.ADB has rallied around Bangladesh as soon as the country announced its first confirmed cases of COVID-19 in the first week of March, hoping to save both lives and livelihoods. The Manila-based multilateral lender has provided $601.3 million in loans and $1.58 million in grants since the pandemic began, all too quickly send Bangladesh back to its high growth path. It is a work in progress. This is just our immediate response. But, I think, as time progresses, and there is a need for more, we will certainly work with the government to make sure we can help them in this difficult time. On the economic recovery front, two scenarios are possible: a V-shaped recovery and a U-shaped recovery.
Fresh orders for apparel plunge 45pc
The inflow of new work orders to Bangladesh’s garment sector from international retailers and brands for June is 45 per cent lower than that a year ago as demand is yet to pick up in the western markets because of the coronavirus pandemic. New orders are being issued but they are at least 40 per cent to 45 per cent lower compared to last year’s, said RubanaHuq, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA). So far, after intense negotiation with the buyers, a portion of the $3.15 billion worth work orders that were cancelled due to the Covid-19 pandemic have been reinstated. Finally, the local garment industry will have to face damages amounting to $5 billion.Suppliers are facing two main challenges from the buyers on payment: unusual deferred payment and discount. The buyers are demanding even 180 to 220 days deferred payment although they primarily agreed to pay the money within 90 days. So, the reinstatement of the payment of the remaining work orders would be delayed.With the original LC from the buyer’s bank in place, the broker goes to his own bank and has a second LC issued, with the seller as the beneficiary. The seller is thus ensured of payment upon fulfilling the terms of the contract. The exports may plummet by 30 per cent to 40 per cent in the upcoming months since the retail market is yet to rebound.
Seven new sectors may get tax holiday
The government may extend tax holiday benefit to seven new sectors from the next fiscal year to encourage expansion of manufacturing activities, said an official of the finance ministry. Transformers and nanotechnology-based manufacturing are likely to be two of the new sectors. The tax benefit may be given for a period of 10 years and the rate of tax to be reduced gradually to be fully phased out on the 11th year.Other sectors that will become eligible for tax exemptions are likely to be announced by Finance Minister AHM Mustafa Kamal during the placement of the fiscal plans for the year 2020-21 tomorrow. He may also seek to extend reduced corporate tax benefits for garments and knitwear sectors for two years to 2022 as the existing benefit will expire on June 30 this year, according to the NBR. Apparel makers, who account for more than 80 per cent of the country’s export earnings, currently enjoy 12 per cent corporate tax on incomes, nearly three times less than the current corporate tax of 35 per cent for non-listed companies. The rate of corporate tax is 10 per cent for holders of green building certificates.Export receipts plunged 18 per cent year-on-year to $31 billion in July-May of the current fiscal year from that a year ago. However, shipments trebled to nearly $1.5 billion in May from just over half a billion in April this year, according to Export Promotion Bureau data.
Local and Global Stock Indices *
|Index Name||Close Value||Value Change||Percentage Change|
|DSEX||3,962.37535||↑ 6.27||↑ 0.16|
World Commodities *
|Commodity||Close Value||Value Change||Percentage Change|
|Crude Oil (WTI)||$38.18 ||↓0.76||↓1.95%|
|Crude Oil (Brent)||$ 40.53 ||↓0.65||↓1.58%|
Major Currencies Exchange Rates Movement in Last Seven Days *
|USD 1||BDT 83.2815|
|GBP 1||BDT 105.811|
|EUR 1||BDT 94.1712|
|INR 1||BDT 1.10453|
*CURRENCIES AND COMMODITIES ARE TAKEN FROM BLOOMBERG.<