Banks seek BB support to lower interest
Private commercial banks have sought regulatory support to bring down lending rates to single digit from July 1. The officials of the Association of Bankers, Bangladesh (ABB)—a platform of private banks’ chief executive officers—made the call in a meeting with BB Governor yesterday. On June 21, public and private banks decided to lower lending and deposit rates to 9 percent and 6 percent respectively. The ABB has requested the central bank to keep funds of state-owned enterprises and commercial banks in private banks at 6 percent interest. If the funds are not kept in this manner, private banks will face difficulties in maintaining a single digit interest rate on lending.
DSE, CSE slip back into red after four-day
Country’s both bourses slipped back into the red on Monday, breaking a four-day gaining streak, as risk-averse investors sold shares to pocket profits. DSEX, the prime index of the Dhaka Stock Exchange (DSE), went down by 88 points or 1.59 per cent to settle at 5,433, after gaining 181 points in the past four straight sessions. The market opened on a mixed trend and key index of the DSE went down steadily after first 20 minutes of trading, eventually ended more than 88 points lower. Two other indices of the DSE also ended lower. The DS30 index, comprising blue chips, fell sharply by 33 points to finish at 1977 and the DSE Shariah index lost 15 points to close at 1,263. Bearish trend also reflected on the trading activities as total turnover on the DSE amounting to Tk 6.86 billion, which was 3.52 per cent lower than the previous day’s Tk 7.11 billion. Prices of 71 per cent traded issues declined as 241 issues closed lower, 61 ended higher and 38 remained unchanged on the DSE trading floor. The port city bourse also ended lower with its CSE All Share Price Index–CASPI—losing 248 points to settle at 16,734. CSCX, the Selective Categories Index of the CSE, also fell 155 points to finish at 10,116. The losers beat the gainers as 165 issues closed lower, 57 ended higher and 28 issues remained unchanged on the CSE.
DSE joins with UN’s initiative to improve market transparency
Dhaka Stock Exchange Limited has become a partner exchange of the United Nations Sustainable Stock Exchange (SSE) initiative with a view to improve transparency of the country’s capital market. To this end, Dhaka Stock Exchange Limited (DSE) has signed a commitment letter with the United Nations Sustainable Stock Exchange (SSE) initiative, said a DSE press release issued on Monday. By signing the agreement, DSE joined nearly 75 stock exchanges worldwide committed to share information and work with stakeholders to promote the sustainability and transparency of capital markets. The SSE initiative is a United Nations (UN) initiative, working as a partnership between the UN, UN-supported organizations, stock exchanges, investors, companies, regulators and governments. This collaboration with SSE Initiative will offer DSE an opportunity to deliver internationally renowned ESG reporting expertise in Bangladesh, which would be of benefit to all our capital market stakeholders’. The SSE aims to provide an effective platform for peer-to-peer dialogue among global exchanges. By exploring how stock exchanges can work together with investors, regulators and companies, the SSE hopes to encourage sustainable investment, SSE also emphasize on enhancing corporate transparency and performance in respect to environmental, social and corporate governance (ESG) issues.
Deposit govt funds with PCBs at rates below 6.0pc: ABB
Top executives of the private commercial banks (PCBs) have urged the Bangladesh Bank (BB) to ensure depositing the government’s fund with their banks at rates below 6.0 per cent for implementing the single-digit lending rate. The leaders of Association of Bankers, Bangladesh (ABB) have also requested the central bank to intervene in the public sector banks for depositing their funds with the PCBs at maximum 6.0 per cent interest rate. On June 20, Bangladesh Association of Banks (BAB) decided to bring down the interest rates on both lending and deposit at 9.0 per cent and 6.0 per cent respectively from July 01. A six-member ABB delegation, led by its chairman Syed Mahbubur Rahman, attended the meeting. The government allowed the state entities to deposit 50 per cent of their funds with the PCBs instead of the previous 25 per cent to meet their growing demand for liquidity. The state-owned enterprises (SoEs) provide deposits to the banks, particularly to the PCBs, at interest rates ranging between 9.00 per cent and 10.50 per cent, according to the banking sector insiders. On the other hand, the state-owned commercial banks (SoCBs) are now providing term deposits to other banks, particularly to the PCBs, at rates between 8.50 per cent and 9.50 per cent. Meanwhile, BAB has requested its member banks to take necessary steps for keeping the deposit and lending rates within 6.0 per cent and 9.0 per cent respectively from July 01. It was decided at the meeting that the deposit and lending rates would be kept within 6.0 per cent and 9.0 per cent respectively in line with the instruction of Prime Minister.
Bangladesh to get AIIB focus this year
The Asian Infrastructure Investment Bank plans to lend out $3.5 billion this year, with India, Bangladesh and Turkey to take greater focus than the other 83 member countries, said DJ Pandian, its chief investment officer. The amount will take the bank’s outlay to $7.9 billion in a significant scaling up of lending activities for the two-and-a-half-year-old multilateral development bank, which has committed $4.4 billion to 25 projects thus far. AIIB’s interest rate on loans for public sector projects is priced according to consensus among multilateral lenders: the lowest is 0.75 basis points over LIBOR and the maximum is 1.45 basis points for 35-year tenure. For private sector loans, the lender does not provide subsidized financing: the interest is as per market rates. The bank has adequate capital — $20 billion in cash and another $80 billion in guarantee from various member countries — and is on the lookout for projects that meet its strategy of: sustainable development, connectivity and mobilizing private sector, according to Pandian. Asia accounts for 50 percent of the global populace but only constitutes 30 percent of the world GDP. The AIIB is particularly looking to mobilize institutional investors as the latter will have more than $106 trillion assets under management by 2020, according to McKinsey & Company. But a very small portion of that amount would be deployed in infrastructure and that too for developed countries and none for emerging markets. Projects pertaining to energy, transport and sustainable cities are of priority to the AIIB at present.
VAT waiver widens for ship importers
The import of vessels of 5,000 deadweight tonnage (DWT) capacity and above has been exempted from value-added tax in a new effort of the tax administrator to boost growth of oceangoing ships industry. The declaration comes three months after the National Board of Revenue gave the go-ahead to the VAT-free import of 22-year-old vessels, raising the age limit from 15 years. Bangladesh Oceangoing Ship Owners Association (BOSOA) has long been demanding a raise in the age limit in line with Import Policy Order 2015-18 that allows the import of up to 25-year-old ships. The relaxation of the age restriction will be helpful for the sector to flourish. The association said the privilege would allow them to buy more vessels and grab an increased share of the $8-9 billion freight charge that Bangladeshi businesses annually spend to export and import goods. Local oceangoing vessels can tap only 2 percent of the freight charge due to a dearth of vessels, according to sector operators. It said oceangoing vessel operators will have to submit certificates or Proceed Realization Certificates issued by banks to the local VAT office every year as proof of their foreign currency earnings. The other conditions include compulsory registration of vessels in Bangladesh as national flag carriers and hiring Bangladeshi nationals to fill at least 70 percent of the posts used in operating the vessel. The NBR said it would realize VAT from the importers for non-compliance with any of the conditions.
Uniform call rate on cards
The government plans to introduce a uniform call rate for mobile phones to establish a level playing field for the country’s telecom operators. Currently, for each minute the operators charge Tk 0.35 to Tk 0.40 on an average for on-net (same network) calls and Tk 0.91 to Tk 1.05 for off-net (other network) calls. Banglalink recommended the rate be fixed at Tk 0.45 a minute while Robi wants it to be Tk 0.55 a minute but the largest operator, Grameenphone, opposed the whole idea. Grameenphone, which has over 6.70 crore customers, said on-net and off-net tariffs have been part of the industry for years. However, Banglalink also proposed that the telecom regulator bring down the upper ceiling for mobile call rate to Tk 1.25 a minute from Tk 2 a minute. The uniform call rate would not hurt the earnings of the operators and the government, Robi said in its presentation to the BTRC. Among the neighbors, Sri Lanka was the last country to come out of the regime of different call rates in 2016 and Bangladesh might be the only country in the world now to use such rates, the BTRC officials said.
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)||$68.41||↓0.12||↓0.18%|
|Crude Oil (Brent)||$74.89||↑0.65||↑0.88%|
Major Currencies Exchange Rates Movement in Last Seven Days *
|USD 1||BDT 83.78|
|GBP 1||BDT 111.34|
|EUR 1||BDT 98.13|
|INR 1||BDT 1.22|
*CURRENCIES AND COMMODITIES ARE TAKEN FROM BLOOMBERG.