Banks ready to invest Tk 1,650cr in stocks once floor price is lifted

Fourteen banks have together formed a Tk 1,650 crore fund to invest in the stock market but they are now waiting for the lifting of the floor price that the market watchdog set for all stocks earlier. Bangladesh Securities and Exchange Commission set the floor price for all stocks based on the average price of the past five days on March 19, in order to stop the market slump amid the coronavirus pandemic. But the DSEX, the benchmark index of Dhaka Stock Exchange, plummeted 4.46 per cent to hit a seven-year low of 3,603 points on March 18, just a day before the floor price was set.The 14 banks which have formed the special investment fund have taken approval from their boards and informed Bangladesh Bank but are yet to invest, confirmed a top official of the central bank preferring anonymity.On February 10, the banking watchdog announced a package for banks, allowing each to set up funds worth Tk 200 crore by taking the funds from the central bank through repo. Repo refers to a system of repurchasing treasury bills from banks to lend money. The banks will have to pay 5 per cent interest for the fund and the credit tenure will be until February 2025. The funds of Tk 200 crore would not be accounted in the market exposure, meaning the limit on banks’ investment in the market, according to the Bangladesh Bank direction.India’s BSE Sensex dropped 35 per cent to 25,981 points, the US’s S&P 500 index slumped 32.96 per cent to 3,337 and Eurozone’s Euro Stoxx 50 fell 37 per cent to 2,385 during the time. The DSEX gave up 16 per cent to settle in the same time.

Source: https://www.thedailystar.net/business/news/banks-ready-invest-tk-1650cr-stocks-once-floor-price-lifted-1922757

The elusive quest for VAT automation

Much has been said about the modernisation and automation of the value-added tax system in Bangladesh over the last decade. Yet, the automation of the VAT administration is halfway, although the project’s tenure is supposed to come to its end this year. Businesses say they can get registration online and file a return electronically. Still, they have to make a trip to the field offices of VAT under the National Board of Revenue (NBR) along with papers — a hassle from which they were supposed to get relief once the automation was put into action. So far, Tk 238 crore out of the total estimated cost of Tk 690 crore for the VAT improvement project has been spent. And a large chunk of the money is likely to remain unspent.Dubbed as a game-changer for improving the collection of the indirect tax and widening the country’s capacity to finance expenditure, the government took the VAT Online Project (VOP) in 2013 to implement the VAT and Supplementary Duty Act 2012 and end the manual system and more than two-decade-old VAT laws.Initially, the NBR had planned to start with a uniform 15 per cent VAT rate on all goods and services, moving away from multiple VAT rates. But its enforcement was delayed on several occasions for a lack of preparedness of the revenue administration and opposition from the businesses, particularly from the Federation of Bangladesh of Chambers of Commerce and Industry (FBCCI).Revenue officials involved with the VOP said they could not proceed for the automation between July 2017 and June 2019 as a structure of the online system was planned in the light of VAT and SD Act 2020. Hence, when the implementation was delayed, they could not go for the rollout of the online VAT registration and piloting remote submission of VAT returns owing to the opposition of a section of officials in the field and businesses as the VAT law 1991 was in effect at that time.The number of online VAT return submissions was nearly 3,000 when it was launched in October last year. The number submitted this month is nearly 39,000. Contacted, Fahim said there are records of all the communications about the 2012 VAT law from 2012 to 2019.

Source: https://www.thedailystar.net/business/news/the-elusive-quest-vat-automation-1922785

Sonali Paper is back on DSE mainboard. But its return is not without controversy.

Small capital-based Sonali Paper & Board Mill’s re-listing on the mainboard of the Dhaka Stock Exchange has raised questions as the regulator granted an exemption to it to pave the way for the resumption of its trading. Sonali Paper will start trading on the mainboard from Thursday, said the premier bourse yesterday. The stock market regulator amended the listing regulations in July last year so that companies, whose paid-up capital is less than Tk 30 crore, can’t be listed with the mainboard as gamblers target the companies to make a quick buck. However, the previous commission of the Bangladesh Securities and Exchange Commission (BSEC), whose tenure ended recently, approved the re-listing of Sonali Paper by exempting it from fulfilling the condition on the paid-up capital. Sonali Paper’s paid-up capital stood at Tk 16.63 crore in 2019, according to DSE data.The company did not declare a dividend in 2017 and 2018. It announced a 10 per cent stock dividend last year. The company’s annual report has not been published on the website of the DSE and its website. But DSE data showed it made a profit of Tk 6.34 crore in 2019. Sonali Paper would be traded as a “Z” category company and the status would continue until it holds its annual general meeting, the DSE said. The floor price of the company will be the last closing price on the over-the-counter (OTC) market on January 30, when it was Tk 273. The price is almost seven times that of Bashundhara Paper Mills, the leading peer company. Yesterday, Bashundhara Paper’s shares traded at Tk 39.The company was sent to the OTC market 10 years ago after it failed to comply with rules. The previous commission decided to re-list it as per its consideration and the current commission can’t say anything now, said a top official of the BSEC.

Source: https://www.thedailystar.net/business/news/sonali-paper-back-dse-mainboard-its-return-not-without-controversy-1922793

Apparel sector for 0.25pc source tax

Leaders of the country’s apparel sector urged the government to continue the existing 0.25 per cent source tax for next five years. Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) on June 24 in a joint letter to Finance Minister AHM Mustafa Kamal reiterated their demands saying the ongoing Covid-19 has severely affected the RMG sector.International buyers have already cancelled or put on hold work orders worth more than US$ 3.0 billion. They said the amount was increasing day by day. The government has proposed 0.50 per cent source tax for export-oriented sectors for the upcoming fiscal which is not a wise decision in view of the overall situation they noted.Both the trade bodies requested the government to keep the source tax unchanged at 0.25 per cent for five years and consider it as a final settlement. Earlier the government proposed 1.0 per cent source tax for export-oriented sectors for the fiscal year of 2019-20. Later, the National Board of Revenue (NBR) through a statutory regulatory order slashed the source tax on export proceeds for all sectors, including RMG, to 0.25 per cent effective from October 21, 2019 to June 30, 2020.

Source: https://today.thefinancialexpress.com.bd/trade-market/apparel-sector-for-025pc-source-tax-1593445744

BDGL brings in modern glazing technology

Bangladesh Double Glazed Ltd (BDGL) has brought latest glazing technology in the country to provide energy-efficient, pollution-free and sustainable glazing solutions. Glazing solutions refer to door and window works in buildings. Such technology aims at increasing the buildings’ energy performance by reducing the need for artificial heating, cooling and lighting, according to a statement.In addition, BDGL’s glazed products are able to keep external sounds at bay. They can reduce the levels of outdoor noise emanating from traffic and other sources by 50-80 per cent, giving dwellers complete peace of mind.The company began production in its own factory in December 2017. The 40,000 square feet unit is located at Shaistaganjupazilla of Habiganj district.The insulated glass production capacity of the factory is 60,000 square feet. The capacity of double and single glazed windows, doors and façade complete fabrication is 30,000 square feet per month.

Source: https://today.thefinancialexpress.com.bd/trade-market/bdgl-brings-in-modern-glazing-technology-1593445772

BRAC Bank is the Best – Moody’s reaffirms

BRAC Bank has once again achieved the rating “Ba3” – highest for any Bangladeshi bank rated by Moody’s Investor Service. This is for the fourth successive year that the internationally renowned rating agency Moody’s Investor Service has confirmed the highest credit rating for BRAC Bank Limited. According to Moody’s, the affirmation of the bank’s rating reflects strong asset quality compared with those of its industry peers; robust profitability and capitalization, driven by its competitive advantage in the higher-yielding small and medium-sized enterprise (SME) segment; and stable funding profile and liquidity.

Source: https://today.thefinancialexpress.com.bd/stock-corporate/brac-bank-is-the-best-moodys-reaffirms-1593448080

Mercantile Bank launches Islamic Banking services

Mercantile Bank Limited has launched ‘TAQWA’, Shariah-complied Islamic banking service. Morshed Alam MP, chairman of the bank, inaugurated the service on Monday through a virtual platform. Initially Mercantile Bank will offer this special service through Islamic banking window in its country-wide 10 branches besides their regular conventional banking. The Chairman expressed the hope that by fulfilling the special client demand of Islamic banking facility, all types of client services will be ensured.

Source: https://today.thefinancialexpress.com.bd/stock-corporate/mercantile-bank-launches-islamic-banking-services-1593448032

Al-ArafahIslami Bank recommends 13pc cash dividend

Al-ArafahIslami Bank Ltd recommended 13 per cent cash dividend for the year ended on 31st December 2019 subject to the approval of the 25th Annual General Meeting (AGM). The decision was taken in the 348th meeting of the board of directors of the bank, held on Sunday via video conference. AlhajjAbdusSamadLabu, Chairman of the Board, presided over the virtual meeting also decided that the 25th Virtual Annual General Meeting (AGM) of the bank would be held on 3rd September 2020 and the record date will be on 30 July 2020.

Source: https://today.thefinancialexpress.com.bd/stock-corporate/al-arafah-islami-bank-recommends-13pc-cash-dividend-1593448120