TT-Clean: 77.1 | TK BC-Selling: 78.1
TK OD-Sight: 76.88 TK | TC-Selling: 78.1 TK

TT-Clean: 77.1 | TK BC-Selling: 78.1
TK OD-Sight: 76.88 TK | TC-Selling: 78.1 TK


TT-Clean: 77.1 | TK BC-Selling: 78.1
TK OD-Sight: 76.88 TK | TC-Selling: 78.1 TK

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Important Business News Extracts March 11, 2018

Savings certificate sales rise even after high interest rate in bank deposits

The depositors had turned away from the banks following the Farmers Bank Limited incident but now they are leaning towards savings certificate. A total of around Tk8,060 crore was invested on savings certificate in January, 2018, said Bangladesh Bank’s updated report. According to the report, this is the highest amount invested in a month in this fiscal year 2017-18. According to information provided by the central bank, the investors of the previous saving scheme were paid a total of around Tk2,920 crore. As a result, the government’s net loan stood in the vicinity of Tk5,139 crore from savings certificate in January, which is the highest net loan in this fiscal year. On the other hand, the banks are failing to get the desired deposits in spite of announcing a higher rate for it. At present over 30 private banks are facing financial crisis. Besides, the customers of Farmers Bank have not been paid money for a few months. Some relatively new banks are also facing similar issues.

Source: http://www.dhakatribune.com/business/banks/2018/03/10/increased-savings-certificate-sale/

Bangladesh Bank sells $27m to four banks

The central bank of Bangladesh has sold US$27 million more to four commercial banks to meet the growing demand for the greenback in the market. “We’ve sold the foreign currency to the banks on Thursday at market rate to settle import payment bills for different essential items,” a senior official of the Bangladesh Bank (BB) told the BBN in Dhaka.

Source: https://businessnews-bd.net/bangladesh-bank-sells-27m-four-banks/

Banker-SME Women Entrepreneur Meet

The Women Entrepreneur Unit of SME Department of the Bangladesh Bank organised ‘Banker-SME Women Entrepreneur Meet and Product Display Fair-2018’ at the Shishu Academy in the city on Thursday to mark the International Women’s Day, says a statement. Speaker Dr Shirin Sharmin Chowdhury inaugurated the event as the chief guest. Governor of the Bangladesh Bank Fazle Kabir, President of ABB Syed Mahbubur Rahman were present as special guests while Executive Director of the Central Bank Md Abdur Rahim presided over the ceremony. Shaikh Md Salim, General Manager of SMESPD, was also present. At the programme, Dr Shirin Sharmin Chowdhury handed over cheques to women entrepreneurs who were granted loans by different banks. On behalf of Dhaka Bank, Ruma Akter, proprietress of M/s. Ripon Panjabi House, received a cheque for Tk 4.50 million. Md Shakir Amin Chowdhury, Deputy Managing Director, Md Sirajul Hoque, SEVP & Head of SME Unit, Sanjib Kumar Dey, Head of MSME & Agriculture Business, Mahboob Ahmed, Manager, Keraniganj Branch; and Mousumi Chowdhury, Head of Women Entrepreneur Development Unit of Dhaka Bank Limited, were present on the occasion.

Source: http://today.thefinancialexpress.com.bd/public/stock-corporate/banker-sme-women-entrepreneur-meet-1520525798

Forex reserve slips below USD 32 billion

Country’s foreign exchange reserves slipped below USD 32 billion after more than two months due to highest-ever import payments settled bi-monthly with Asian Clearing Union (ACU). It paid USD 1.56 billion to the ACU against January-February imports from the member countries, particularly India, according to the central bank’s latest statistics. After the payment, the forex reserves came down to USD 31.93 billion on Thursday. The reserves would, however, be enough to settle more than seven months of the country’s total import bills. The amount of ACU payment rose by 34.16% or USD 398 million in the latest transaction from USD 1.16 billion earlier, mainly due to higher imports of rice, officials said. The BB is providing foreign-currency support to the commercial banks continuously for clearing the import bills of the essential items, which might put pressure on the reserves if such operation continues. The central bank sold USD 27 million to four commercial banks at market rate on Thursday to meet their growing demands for the greenback.

Source: http://today.thefinancialexpress.com.bd/first-page/forex-reserve-slips-below-32-billion-1520529201?date=09-03-2018

SB seeks Tk 60b bailout urgently

The state-owned Sonali Bank has sought guarantee worth Tk 60 billion from the government to meet its huge capital shortfall urgently, officials said. According to data available until September, Sonali Bank Ltd (SBL) had a capital inadequacy of over Tk 31.40 billion. And the current figure is assumed to have increased with the rise in its non-performing loans (NPLs). Managing Director of the SBL Obayed Ullah Al Masud in a letter to the Ministry of Finance on March 4 made the request for a kiss of life to the bank, the sources said. “We have sought from the finance ministry issuance of government’s guarantee worth Tk 60 billion in favour of Somali Bank to reduce its capital shortfall. The bank needs fresh injection of a huge amount of funds immediately,” a source in the largest state-owned bank told the FE Tuesday. When contacted, a high official of the financial institutions and banking division said, “We have received the proposal sent by the bank, seeking funds to meet its capital shortfall.” Officials of the bank said it immediately would need recapitalisation to strengthen its capital base and maintain minimum capital requirement in line with Basel-III banking guideline.

Source: http://today.thefinancialexpress.com.bd/public/first-page/sb-seeks-tk-60b-bailout-urgently-1520612837

Govt won’t let any bank die: Muhith

The government would never let any bank die following financial crunch, as the depositors would be affected (if any such thing happens), said Finance Minister A M A Muhith on Thursday. He said this while talking to the newsmen after a pre-budget meeting for the upcoming fiscal year, 2018-19, with the think-tanks. Mr Muhith said four to five other banks would be ‘forced’ to buy 60 per cent share of the problem-stricken Farmers Bank Limited (FBL) to salvage it. “Some economists in the meeting said let the problem-ridden entities die. But I would never let this happen.” “Farmers Bank is making profit, and I have persuaded them that they have to sacrifice its majority shares,” the finance minister further said. “Collapse of a bank is a national issue, and we have less experience on that.” He also unveiled his plan to conduct a study to assess the capital strength of the state-owned banks and required budget provision.


PMO consent sought for Citizen Bank

The Financial Institutions Division has sought the consent of the Prime Minister’s Office for banking licence for proposed Citizen Bank while the Bangladesh Bank is reportedly under pressure for three more banking licences before the next general elections although the sector is already overcrowded with 57 banks and mired by scams.

Source: http://www.newagebd.net/article/36485/pmo-consent-sought-for-citizen-bank

IMF for market-based pricing of savings tools

The visiting International Monetary Fund (IMF) mission suggested tighter eligibility criteria and move towards market-based pricing to reduce reliance on national savings certificates, help strengthen financial intermediation and expand the capital market. IMF team leader Daisaku Kihara made the observations on Thursday while delivering speech in a press conference after concluding its two-week visit in Bangladesh. The IMF team visited Dhaka from February 25 to March 08 to hold discussions on the 2018 Article IV consultation with Bangladesh. The team also focused on strengthening banking regulations through effective supervision to combat ongoing challenges in the banking system, including higher non-performing loans. “It will require enhancing banking sector regulation and supervision, particularly for the state-owned commercial banks, avoiding regulatory forbearance, improving corporate governance, and implementing judicial reforms to expedite loan recovery,” said the IMF team leader. He also suggested judicial reforms for faster default loan recovery.


BD state-owned banks prone to sizeable liability risk: Moody’s

Bangladesh’s banking sector risk has been assessed as ‘moderate’ by the international credit rating agency Moody’s, which said it reflects sizeable contingent liability risks from state-owned banks, reports bdnews24.com. Bad debt has been dogging the banking sector in Bangladesh with the total amount of capital deficit in state-owned banks of Sonali, Rupali, Janata and BASIC standing at more than Tk 76.26 billion. The government had injected Tk 102.72 billion into state banks as recapitalisation facility during the period from the fiscal year (FY) 2006 to FY 2017, Finance Minister AMA Muhith said in parliament last month. In its just-released annual credit analysis titled ‘Bangladesh-Ba3 Stable’, Moody’s said it expects economic growth to stay steady at 6.7 per cent in FY2018, maintaining the average in the last five years. “Strong export growth will largely be offset by rising capital goods imports, leaving domestic demand-supported by higher remittances-as the main growth driver,” Moody’s said.

Source: http://today.thefinancialexpress.com.bd/public/first-page/bd-state-owned-banks-prone-to-sizeable-liability-risk-moodys-1520528998

Economists fret as money supply to economy falls

Growth of “broad money” continues to decelerate in the country that implies that the money supply to the economy is gradually contracting as the government tightens the purse strings, sources said. Economists view that such belt-tightening is necessitated mainly by some deterioration in the country’s balance of payments, on the one hand, and, on the other, under an impact of slow growth in net foreign asset of the banking system. They believe there is need for tightening the noose around capital flight and augmenting both exports and remittances for attaining an expected level of broad money in banking system. Such tightening casts cascading impacts on the economy at large as it impacts on the rates of interest both on deposit and lending–and usually such a situation makes investments expensive. However, decline in broad money does usually help contain inflation. The country’s economy has been experiencing some inflationary pressure in recent months, primarily due to increase in prices of food items. As of January last, the broad-money growth was 10.14 per cent in a squeeze from corresponding period’s 14.0 per cent in 2017, according to the outstanding stock prepared by the central bank of Bangladesh. In December last, it was 10.69 per cent against 13.83 per cent in December in 2016. Broad money, or M2 in economic parlance, is a measure of money supply that includes all elements of narrow money of M1 and ‘near money’. M1 or narrow money, consisting of coins, currencies and demand deposits, is highly liquid while ‘near money’ is less liquid as it consists of time-deposits, money-market securities and mutual funds.

Source: http://today.thefinancialexpress.com.bd/first-page/economists-fret-as-money-supply-to-economy-falls-1520699586

Saifuzzaman Chowdhury new adviser of UCB Foundation

The Executive Committee of UCB Foundation, a CSR organisation of United Commercial Bank Limited (UCB) has unanimously appointed Mr. Saifuzzaman Chowdhury MP, State Minister, Ministry of Land, People’s Republic of Bangladesh as Adviser of UCB Foundation. Mr. Saifuzzaman Chowdhury, MP is the son of prominent freedom fighter, parliamentarian, politician, industrialist and founder of UCB Late Akhtaruzzaman Chowdhury. He is the Member of Parliament from Chittagong 13 (Anowara-Karnaphuli) constituency. Prior to taking the responsibility as State Minister, he was the Executive Committee Chairman of UCB.

Source: http://today.thefinancialexpress.com.bd/stock-corporate/saifuzzaman-chowdhury-new-adviser-of-ucb-foundation-1520696662

ADP spending rises 35pc

The government’s development spending rose 35 percent year-on-year to Tk 62,372 crore in the first eight months of 2017-18 thanks to increased use of foreign aid. Project aid utilisation increased 108 percent year-on-year to Tk 25,341 crore during the period, according to the Implementation Monitoring and Evaluation Division. In comparison, the use of the government’s own funds rose 14.36 percent to Tk 33,654 crore. However, development spending by state-owned enterprises declined 15.19 percent to Tk 3,377 crore. For 2017-18, the government set aside Tk 164,085 crore for development spending, which was revised down to Tk 157,594 crore in the National Economic Council’s meeting held on Tuesday.

Source: http://www.thedailystar.net/business/adp-spending-rises-35pc-1546474

B’desh, Kuwait agree to bolster labour migration co-op

Bangladesh and Kuwait have agreed to formulate a cooperation agreement on manpower (2000) and form a Joint Working Group under the deal. “Both sides have also agreed to work together to establish centres of excellence for Kuwait-bound workers in Bangladesh,” said State Minister for Foreign Affairs M ShahriarAlam. He made the disclosure after a meeting with Hend SB Al Subaih, the Minister of Social Affairs and Labour and the Minister of State for Planning and Development of Kuwait, at Kuwait parliament on Tuesday, reports UNB. At the meeting, the Kuwait side also assured the Bangladesh delegation of addressing various challenges being faced by the Bangladesh community in Kuwait. The state minister urged the Kuwait government to hire more Bangladeshis, particularly professionals, skilled and semi-skilled workers.

Source: http://today.thefinancialexpress.com.bd/public/trade-market/bdesh-kuwait-agree-to-bolster-labour-migration-co-op-1520524851

Germany becomes Bangladesh’s largest export market in Jul-Feb

Germany has once again emerged as Bangladesh’s largest export market overtaking the United States in July-February of the current fiscal year 2017-18 due to slow growth in readymade garments export to US market. Earlier, Germany had overtaken the US for the first time as Bangladesh’s largest export market for the July-November period of 2016-17 fiscal and then the US regained its position as the country’s largest export destination, according to Export Promotion Bureau data. Export earnings from Germany in the July-February period of FY18 stood at $3.92 billion which is $23.22 million higher than earnings from the US — $3.90 billion — in the period. Experts and exporters said that slowdown in export of RMG to US market pushed Germany to the top export destination. They termed the trend encouraging as slow growth in US market was covered by growth in another market. Despite poor earnings growth from the beginning of the current fiscal, the US remained Bangladesh’s largest export destination until January this year and Germany went to the top of the list in February. At the end of 2016-17 fiscal, export earnings from the US stood at $5.84 billion while the earnings from Germany were $5.47 billion in the period, the EPB data showed. Earnings from Germany in exporting RMG in the first eight months of the FY18 were $3.70 billion which was $216.73 million higher than the earnings from the US — $3.48 billion — in the period, data showed.

Source: http://www.newagebd.net/article/36482/germany-becomes-bangladeshs-largest-export-market-in-jul-feb

Exports keeping up with target

Exports fetched $3.08 billion last month, up 13.53 percent year-on-year, helped by steady shipments of garment products. The amount, which beat the monthly target by 1.65 percent, is lesser than the previous month’s by 6.94 percent, according to data from the Export Promotion Bureau. February’s receipts take the export earnings in the first eight months of the year to $24.4 billion, a 7.39 percent increase from a year earlier but it fell short of the periodic target by $4.95 million. Garment, which typically accounts for more than 80 percent of the export receipts, brought home $2.6 billion in February, up 16.59 percent year-on-year but down 3.7 percent month-on-month. Apparel exports are rebounding because of Western retailers’ regaining confidence in the ‘Made in Bangladesh’ brand and a gradual shift in production towards high-value items, said Faruque Hassan, senior vice-president of the Bangladesh Garment Manufacturers and Exporters Association.


Oceangoing vessels promise great returns

Bangladeshi businesses spend up to $8-$9 billion annually as freight charge and local oceangoing vessels can tap only 2 percent of the market at best for dearth of vessels. The rest of the freight charge, generated from the country’s ballooning exports and imports, goes to foreign vessel operators in the absence of investment in the sector, said industry operators. Owners linked the high import cost of ships, high operating costs and prevalence of withholding tax as the main reasons for the lack of investment.

Source: http://www.thedailystar.net/business/oceangoing-vessels-promise-great-returns-1546480

Stagnant private investment poses a major challenge

A “stagnant” state of private-sector investment as a ratio to GDP (gross domestic product) would stand as one of major challenges facing Bangladesh for smooth transition from the LDC status. The contribution of the public-sector investment to the gross domestic product (GDP) keeps increasing, the situation of the private sector remains stagnant-around 22% for a decade. Calling upon the government machinery to bring necessary changes in its policies to create an investment-friendly climate, speakers at a dialogue emphasized coordinated efforts to reduce the cost of finance, structural reforms to ensure financial-sector governance and proper screening for driving the private-sector investment into the productive sector.

Source: http://today.thefinancialexpress.com.bd/last-page/stagnant-pvt-investment-poses-a-major-challenge-1520699825

High tariff could knock exports as B’desh graduates from LDC

Bangladesh could face an additional 6.7 per cent tariffs on an average after its graduation from the least-developed country, resulting in an export loss of US$ 2.7 billion annually, an economist has estimated. Around 8.7 per cent of the possible tariffs would come into force from the European Union alone, followed by 3.9 per cent with non-EU and 7.3 per cent with Canada. The revelation came Saturday at a public dialogue on “Bangladesh’s Graduation from the LDC Group: Pitfalls and Promises” organised by the private think-tank Center for Policy Dialogue in Dhaka. “The estimated export loss of $ 2.7 billion (was) equivalent to about 8.7 per cent of its global exports in the fiscal year 2015,” Mustafizur Rahman, distinguished fellow at the Center for Policy Dialogue (CPD), said, adding the UNCTAD also estimates the export decline in the range of 5.5 per cent to 7.5 per cent. He presented the keynote paper in the second session of the dialogue. Unless Bangladesh manages to renegotiate through bilateral agreement or as part of regional trade arrangements, it will face MFN tariff rates following LDC graduation or reduced preferential margins under standard GSP scheme in the EU market, Mr Rahman said. He recommended that Bangladesh should take the reviews supposed to be taken place in 2018 to 2030 seriously and penetrate its policy according to the challenges emerging from the reviews. Some graduate countries have sought extension and Bangladesh should remain engaged with the development partners with regard to market access while diversifying its financing sources, he added. A B Mirza Azizul Islam, former advisor to the caretaker government, chaired the session. Foreign secretary Md Shahidul Haque was the guest of honour, which was also attended by World Bank Bangladesh lead economist Zahid Hussain and Swedish ambassador to Dhaka Charlotta Schlyter.

Source: http://today.thefinancialexpress.com.bd/trade-market/high-tariff-could-knock-exports-as-bdesh-graduates-from-ldc-1520697939

Good governance most critical to graduation from LDC status

Good governance is most critical in ensuring Bangladesh’s sustainable graduation from the least-developed country (LDC) status, experts said Saturday, as it entails challenges in aid and trade. LDC graduation is not the end of the road, rather it is a milestone, they observed. It does not ensure structural transformation. Therefore, qualitative transition is very important. Their views came at a Public Dialogue on ‘Bangladesh’s Graduation from the LDC Group: Pitfalls and Promises’ held in Dhaka Saturday. Country’s leading think-tank Centre for Policy Dialogue organised the event for deliberations on the pros and cons of the status change as Bangladesh is poised to say goodbye to world’s poor-country club.


More 77 power plants in the offing

Some 77 power plants under both public and private sectors with a total of 18,905-megawatt (MW) generation capacity are now being set up across the country. 47 power plants with the capacity of 13,813 MW would enter into operations in phases from 2018 to 2024. The government is constructing 18 plants having 7,313 MW and the privately-run plants with 6,458 MW installation capacity. According to the power cell information, the country’s power generation capacity stands at 16,046 MW at present and the highest generation was 9,507 MW against the demand. The number of total consumers has reached 28.2 million now and the transmission lines 10,622 ckt km. The country’s distribution line has reached 434,000 km and system loss come down to 12.19%, per capita generation increased to 433 KWh and access to electricity reached 90%.

Source: http://today.thefinancialexpress.com.bd/trade-market/more-77-power-plants-in-the-offing-says-official-1520698109

Like LPG, government leaves auto-gas pricing to private players

Like Liquefied Petroleum Gas used in cooking, the government has also left the pricing issue of auto gas, LPG used in vehicles, to the private players ignoring the legal entitlement of the Bangladesh Energy Regulatory Commission. Liquefied Petroleum Gas is called ‘auto-gas’ when it is used in motor vehicles. Energy division secretary said that the government had created a competitive market by allowing a good number of private companies in the business which would enable consumers to get fuel at reasonable prices. A director of Omera Petroleum Limited claimed that the suppliers would feel secure if there were proper regulations in place and a regulatory body protecting the interests of both the suppliers and consumers.

Source: http://www.newagebd.net/article/36481/like-lpg-govt-leaves-auto-gas-pricing-to-private-players

BCIC incurs Tk 3.9b in loss for gas shortage

Bangladesh Chemical Industries Corporation (BCIC) is in a fix for witnessing a massive loss to the tune of Tk 3.9 billion after making profits in the recent years, said officials concerned. The officials and experts said an acute supply shortage of natural gas to its fertiliser units coupled with high production cost and low selling price of output created a setback in the corporation’s earning-recovery plan. They also pointed out that some other factors, like – apathy to reinvest in its outmoded plants and to introduce modern technology as well as poor management, made things worse. BCIC was established under a presidential order in 1976 with an objective of setting up an efficient operation hub of large and complex industrial units, especially in the chemical sector. But, the corporation witnessed gradual fall in the production of fertilisers over the years. Production cost and debt liabilities continued ballooning, disturbing further growth of BCIC. During inception of the corporation, the number of its running enterprises was 88, which has dwindled to only twelve now. The largest government-run corporation counted profit over the last several fiscal years (FY) though its profit margin declined gradually. But the situation deteriorated from the last fiscal.

Source: http://today.thefinancialexpress.com.bd/public/last-page/bcic-incurs-tk-39b-in-loss-for-gas-shortage-1520613325

BGMEA seeks another year to demolish building

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has filed an application before the Supreme Court, seeking another year for relocating its office, constructed at Dhaka’s Hatirjheel in violation of environmental laws. On March 5, the BGMEA authorities submitted the application before the related branch of the apex court, sources said. On October 8 last year, the Supreme Court gave the BGMEA seven more months to demolish its office. A five-member apex court bench, headed by Chief Justice in-charge Abdul Wahhab Miah, passed the order. The court said: “You are being given time for seven months as the last chance.” On August 23 last year, the BGMEA had filed a petition before the Appellate Division of the Supreme Court, seeking one year’s time for relocating its office. The 16-storey building was constructed in the Hatirjheel area in 2006. The headquarters, popularly called BGMEA Bhaban, was built in a prime location in violation of the Wetlands Protection Act.

Source: http://www.theindependentbd.com/post/140900

Local and Global Stock Indices *

Index NameClose ValueValue ChangePercentage Change
Nikkei 22521,469.20↑101.13↑0.47%

World Commodities *

CommodityClose ValueValue ChangePercentage Change
Crude Oil (WTI)$ 62.04↑1.92↑3.19%
Crude Oil (Brent)$ 65.49↑1.88↑2.96%
Gold Spot$ 1,324.00↑2.30↑0.17%

Major Currencies Exchange Rates Movement in Last Seven Days *

Exchange Rates
USD 1BDT 83.33
GBP 1BDT 115.41
EUR 1BDT 102.55
INR 1BDT 1.28





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