Frozen food exporters demand cut in corporate tax
Exporters of frozen food products, especially shrimp, have demanded that the government reduce corporate tax from 32.5 per cent to 15 per cent in the proposed national budget to help the sector recover from a significant fall in international sales. The demand for frozen shrimp and similar luxury food items has fallen drastically in western countries, Bangladesh’s main export market, due to the ongoing novel coronavirus pandemic. Not only did this lead to a decline in shipments but also got international buyers, who were mostly European, to either return or cancel several consignments of frozen food items amounting to Tk 460 crore in value. Traders have been exploring Russia and China as potential export destinations over the past few years but the Covid-19 outbreak has laid waste to consumer demand in both nations.Before the Covid-19 pandemic began, the price for a kilogramme (kg) of shrimp was between $12.50 and $13. Now it is down to $10.50 or $11.0.During June, his peak time for sales, Das ships up to 12 containers of shrimp. This is dThis June however Das can at most expect to ship seven containers due to the 30 per cent fall in demand in western countries. For the last five years, the total value of his shipments ranged between Tk 101 crore and Tk 108 crore annually. At this rate, the company might be able to make a little more than half of his usual export earnings at Tk 70 crore through shrimp and other fish by the end of the year. Typically, Modern Seafood exports about Tk 320 crore-worth shrimp each year. This year however, the company would be happy if it makes half of that. Modern Seafood has already lost Tk 25 crore in order cancellations while the company’s single fish farm in Khulna was badly damaged by last month’s cyclone.
Telecom Companies in a tight spot
The Covid-19 pandemic is taking a heavy toll on the telecom operators, as they saw a 2 per cent decline in their client base in the past two months, according to data from the Bangladesh Telecommunication Regulatory Commission (BTRC). In March, Grameenphone, Teletalk, Banglalink and Robi collectively lost about 12 lakh active connections for voice services but witnessed an increase in internet service usage at the same time. In April, with the sales of new connections having considerably slowed, the situation spiralled out of control with all four carriers losing a total of around 24 lakh and 20 lakh users for voice and internet services respectively.Customers will now have to pay Tk 133.25 to avail services worth Tk 100 due to the tax hike. The number of active connections dropped from 16.53 crore in March to 16.29 crore in April, according to BTRC data published on Friday.In April, the number of active voice connections lost by Grameenphone, Robi, Banglalink and the state-owned Teletalk were 9.7 lakh, 8.7 lakh, 4.9 lakh and 73,000 respectively.Although the carriers have endured a declining trend for active connections for a few months now due to regulatory issues, the combined total number of users slumped drastically from 7.65 crore at the end of January to 7.44 crore as of April. By the end of the month, Robi was left with 4.88 crore active voice service users despite being close to the 5 crore landmark back in March. Meanwhile, the number of customers for Banglalink stands at 3.49crore and Teletalk 48.40 lakh. Similarly, the number of active internet connections declined from 10.33 crore in March to 10.12 crore in April. By the end of April, there were a total of 9.31 crore active mobile internet subscribers, 2,000 WiMAX users and 80.84 lakh broadband service users.
Entire stock trading will be automated: BSEC chief
The trading platform of the stock exchanges is being wholly digitalised and automated by the stock market regulator so that all activities can be run without human assistance, said ShibliRubayatUl Islam, chairman of Bangladesh Securities and Exchange Commission. Settling share trade in the platform currently requires manual intervention.Only 2 per cent of beneficiary owner (BO) accounts registered for online trading, according to DSE data. The tax gap between listed and non-listed companies was suggested to be reduced from 10 per cent to 7.5 per cent in the proposed budget for fiscal year 2020-21. The dispute is over the BTRC’s audit claim of Tk 12,579.95 crore in revenue sharing, taxes and late fees accumulated until December 2014 from the mobile phone operator. The capital market needs a strong bond market to increase its depth, said Ershard Hossain, managing director of City Bank Capital. The bond market can be an easy way out for sustainable long-term financing and a source of revenue in the coming days, but initially some incentives need to be provided to popularise it.
Nagad wins praise from regional postal body
The Asian-Pacific Postal Union has praised the Bangladesh Postal Department’s mobile money initiative Nagad, calling it the “fastest” growing digital financial service in the world, reports bdnews24.com. The regional body, which consists of the postal departments of 32 member countries, held a remote meeting through virtual platforms on Thursday, Nagad said in an emailed statement. Some member countries, including Australia, Singapore, Malaysia, India, Pakistan, Vietnam, Japan, Iran and the Solomon Islands, expressed interest in replicating the initiative.This type of appreciation will definitely encourage us to extend our service quality further and our target is to serve as many possible citizens of the country and include them in the regulator financial model.
Allow import of CKD parts for next five years: BMAMA
Bangladesh Motorcycle Assemblers and Manufacturers Association (BMAMA) has urged the government to allow them to import painted CKD parts for next five years following a decline in trade during the coronavirus pandemic. It also demanded extension of the VAT exemption facility until 2025 from June 2020. The motorcycle makers requested the government to reduce the cost of registration to help boost sales of motorbikes. BMAMA president Matiur Rahman said the industry showed a 200 per cent growth in last five years thanks to joint efforts of the government and private sector. The sector has been enjoying VAT exemption facility under SRO 175 which will expire in June 2020.Currently, the registration cost is 25 per cent of motorcycle price or almost Tk 22,000 per unit, it added. The government imposed 10 per cent supplementary duty on total fees including registration, road tax and other charges in the outgoing fiscal year. Such high registration cost hinders the growth of the sector, according to BMAMA. The association demanded fixation of Tk 4,000 for registration per motorcycle to attract buyers. Motorcycle sales increased to 0.5 million units a year which was 0.15 million units three years back. The sector employed 0.2 million people directly or indirectly with an investment of Tk 80 billion. It also generates revenues worth Tk 20 billion annually.
ETF still eludes investors
Dhaka Stock Exchange (DSE) is yet to launch the Exchange Traded Fund (ETF) despite the gazette on the rules of this fund was published three years back. The DSE officials said the ETF could not be launched within expected timeframe due to various reasons including the lack of supporting products.The securities regulator formulated the rules of the ETF as part of its regulatory initiatives to introduce new products in the country’s capital market for the sake of market diversifications. In case of offloading the mutual fund, a portion of the fund is raised through the public offering. But, in case of the ETF no fund is raised through public offering as the authorised participants (APs) such as banks, broker dealers, professional trading houses and institutional firms contribute funds to create the ETF units and sell those in the secondary market.
Local and Global Stock Indices *
|Index Name||Close Value||Value Change||Percentage Change|
|FTSE100||$ 6,292.60||↑ 68.53||↑ 1.10 %|
|Nikkei 225||$ 22,478.79||↑ 123.33||↑ 0.55%|
World Commodities *
|Commodity||Close Value||Value Change||Percentage Change|
|Crude Oil (WTI)||$39.75 ||↑0.91||↑2.34%|
|Crude Oil (Brent)||$ 42.19||↑0.68||↑1.64%|
|Gold Spot||$1,743.87||↑ 20.94||↑ 1.22 %|
Major Currencies Exchange Rates Movement in Last Seven Days *
|USD 1||BDT 83.3633|
|GBP 1||BDT 102.919|
|EUR 1||BDT 93.1626|
|INR 1||BDT 1.09447|
*CURRENCIES AND COMMODITIES ARE TAKEN FROM BLOOMBERG.<