Banks continue to cut interest rates on dull business
The scheduled banks cut rates of interest on lending further in January as the businesspeople continued to show reluctance in receiving loans from the banking sector due to sluggish business amid political uncertainty, said officials of Bangladesh Bank. According to the latest BB data, the weighted average interest rate on lending in the banking sector declined to 11.05 percentage points in January 2016 from 11.18 percentage points in December 2015. The weighted average interest rate on lending continued to decline over the recent months as it was 11.27 percentage points in November, 11.35 percentage points in October, 11.48 percentage points in September, 11.51 percentage points in August, 11.57 percentage points in July, 11.67 percentage points in June, 11.82 percentage points in May, 11.88 percentage points in April, 11.93 percentage points in March, 12.23 percentage points in February and 12.32 percentage points in January of last year.
Government Treasury bill, bond yield rates fall to new low
The yields from both government treasury bills and bonds came down to the lowest ebb at the last auctions, sources said, attributing it to oversaturation of the money market. Such a situation, they viewed, signifies that the commercial banks have adequate liquidity but with limited scope for investment. The yield rates should not have fallen on the back of paltry government borrowing as slow borrowing means slow supply of the government instruments to the market. However, people working with the primary dealers who are authorized to participate in the auctions told the FE that this trend is happening as the banks are desperately investing in this secure investment landscape. The glut leads to fall in the rates on government borrowing tools. The yields both on bonds and bills have fallen by around 5.0 percentage points if it is compared with the yield rates held a year back in 2014.
Bangladesh Bank seeks FBI help to recover stolen money
The central bank has sought cooperation from the Federal Bureau of Investigation (FBI) to recover the money, stolen from the Federal Reserve Bank of New York. The assistance was sought when two senior officials of the Bangladesh Bank (BB) met with the officials concerned of the US Embassy in Dhaka on Thursday, according to sources. The central bank of Bangladesh will also seek cooperation from the World Bank (WB) to recover the stolen money from abroad, they added. The FBI is the domestic intelligence and security service of the United States, which simultaneously serves as its prime federal law enforcement organization. Operating under the jurisdiction of the US Department of Justice, the FBI is concurrently a member of the US Intelligence Community and reports to both the Attorney General and the Director of National Intelligence. BB Governor Dr. Rahman is now in the Indian capital for taking part in a program, organized by the International Monetary Fund (IMF). The central bank official further said the BB will also follow stolen asset-recovery process of the WB, if necessary. The expert team comprising of experienced consultant of the WB and his forensic investigation team are investigating continuously with the help from the BB IT (information and technology) experts.
Rules in the offing to put cap on shareholding in insurers
Shareholders having less than 2.0% of shares would not be allowed to act as director of an insurance company, a draft of the rules also said. The ministry of finance (MoF) last week sent a draft gazette of the rules, under the Insurance Act 2010, to the Ministry of Law, Justice and Parliamentary Affairs for vetting before publication. Presently, there is no mention of the limit of shareholding by individuals, families, and companies in the Insurance Act 2010. Chairman of the Insurance Development and Regulatory Authority (IDRA) M Shefaque Ahmed told the FE presently the limit is being enforced under ‘registration provision’ of insurance companies. However, the IDRA chairman could not confirm if the limit of shareholding is being strictly enforced in all insurance companies. A senior official of the MoF told the FE the rules are being framed to regulate share-holding by individuals and companies so that no quarter can take those under its grip.
DSE, CSE get full income tax exemption this fiscal
The National Board of Revenue (NBR) has decided to offer full tax exemption to the country’s bourses on their income for 2015-16 to facilitate ongoing reform activities and infrastructure development of the capital market. For the current fiscal year (FY), the Dhaka Stock Exchange (DSE) and the Chittagong Stock Exchange (CSE) will enjoy 100% tax exemption on their annual income. As per income tax rules of the NBR, some 20% annual income of both the bourses was to come under income tax net from the current FY. The NBR, in a recent board meeting chaired by its Chairman Md Nojibur Rahman, decided to allow the DSE and the CSE full tax waiver following their requests to the Finance minister. The Bangladesh Securities and Exchange Commission (BSEC) has also recommended to the tax authorities to offer full tax exemption to the two bourses for current FY. Earlier, Finance Minister AMA Muhith instructed the board to scrutinse the applications of the DSE and the CSE following recommendations of the stock market regulator. Under the existing income tax ordinance, the bourses were to come under diminishing tax rate, 7.0% corporate tax, from the current FY.
Telcos start cutting 1.0% talk-time usage surcharge
The government-slapped 1.0% surcharge on mobile phone talk-time usage has been effective from Wednesday. Cell-phone operators have started deduction of the 1.0% surcharge from the subscribers’ talk-time on the day. From now on, mobile phone users have to pay BDT 1.0 on every BDT 100 talk-time. Value Added Tax (VAT) Wing of the National Board of Revenue (NBR) will collect the surcharge from the operators. The collected surcharge will be non-tax revenue that would be spent on development of education and health in the country. The Internal Resources Division (IRD) under the Ministry of Finance issued a gazette, dated March 8, in this regard on Wednesday. The surcharge will be payable on services through use of Subscribers’ Identity Module (SIM) card, Removable User Identification Module (RUIM) or similar microchip cards or Code Division Multiple Access (CDMA) without card. Mobile or fixed wireless phone operators will have to pay the surcharge by collecting from subscribers. In March 2015, the cabinet gave final approval to the Development Surcharge and Levy Act 2015, keeping the provision of charging 1.0% surcharge on mobile phone usage.
Commerce Minister expects exports to reach USD 60.0 billion by 2021
Commerce Minister Tofail Ahmed Friday forecast Bangladesh exports will reach to USD60 billion by 2021. “We are confident that Bangladesh will achieve this growth due to its policy, dynamic private sector, strong economic foundation and fundamentals, strategic location and, moreover because of our resilient people,” he said while inaugurating the month long “Chittagong International Trade Fair-2016” (CITF-2016). He added that the country’s current annual export stood at over USD 31.0 billion and was increasing at a rate of 12.5% per annum while “Bangladesh has set a target to take export earnings USD 5.0 billion by 2021 mainly from the Information Technology (IT) and USD 5.0 to USD10.0 billion from medicine sectors”. “The sole aim of this is that we want to transform Bangladesh from a labor-reliant economy to a digital one,” Ahmed said.
Commerce Minister: India’s 12.0% import duty hits Bangladesh’s duty-free export
Commerce Minister Tofail Ahmed yesterday said India’s duty-free market access does not benefit Bangladeshi exporters due to the imposition of its 12.0% countervailing duty on the import from Bangladesh. The minister came up with the remark at “Bangladesh India Cotton Fest 2016” held at Raddission Blu Hotel in the capital yesterday. Bangladesh Cotton Association (BCA) and the Indian Cotton Association Limited (ICAL) in cooperation with the Federation of Bangladesh Chamber of Commerce and Industry (FBCCI) and the India-Bangladesh Chamber of Commerce and Industry (IBCCI) hosted the cotton fest. “India has awarded Bangladesh duty- and quota-free access of all products except alcohol and tobacco to its market, but the question appears as to why we cannot avail the opportunity,” said Tofail. The exporters are not getting benefits of 100.0% duty-free access to Indian markets due to some tariff and non-tariff barriers, Tofail said, adding that negotiation is on to address the issue. According to BTMA, there are 400 cotton mills in the country, which consumed 6.1 million bale cotton worth about USD 2.2 billion in 2015. BTMA mills can produce 2,250 million kgs of yarn over 11 million spindles.
Direct cargo flight from Dhaka: BGMEA leaders fear UK ban to hit exports
Country’s apparel exporters on Thursday expressed their worries over the ban the United Kingdom imposed on direct air cargo from Dhaka to the UK and feared that the UK decision would hamper Bangladesh’s export to the market. The UK on Tuesday decided not to allow cargo on direct flights from Dhaka until further notice, as the security arrangement at the Dhaka airport is not up to the mark in their view. Seeking government intervention the exporters at an emergency briefing at the BGMEA office in the city demanded that Bangladesh government resolve the crisis through a crash program as the UK is one of the important export destinations for the Bangladeshi readymade garment products. They urged the government to request UK government so that they relax their restriction on cargo until March 31 as the UK government earlier reminded Bangladesh to start work for ensuring security at the Hazrat Shahjalal International Airport by the deadline as per the roadmap.
Summit eyes listing with Singapore stock exchange
The country’s largest power conglomerate Summit Group is eyeing to get listed with the Singapore stock exchange to raise capital for future energy projects in Bangladesh. “The group has already started discussions with the concerned authorities in Singapore to facilitate listing there and raise funds to be utilized in projects to provide primary energy,” Summit Group chairman Muhammed Aziz Khan told a group of journalists following a tour to Bibiayana II 341 megawatts (MW) power plant in Habiganj district. He said the Summit is interested to purchase coal mines in Australia and Indonesia and import liquefied natural gas (LNG) to meet the country’s mounting energy demand. Providing primary energy will be the country’s biggest challenge ahead to ensure electricity for all, said Mr Khan. Regarding the Bibiyana II power plant, he said, the plant is providing electricity at the lowest tariff at around BDT 1.50 per unit (1.0 kilowatt-hour), which is around one-fourth of the country’s average electricity generation cost of BDT 6.0 per unit.
Cemex to sell Bangladesh cement unit
Mexico-based cement manufacturer Cemex has announced that it has signed a deal to sell its operations in Bangladesh and Thailand to Bangkok-based Siam City Cement Public Company for about USD53 million. The proceeds obtained from the transaction will be used mainly for debt reduction and general corporate purposes, Cemex said in a statement on its website. The company expects to finalize the divestiture during the second quarter of 2016. Closing of the agreement is subject to the satisfaction of standard conditions for this type of transactions, according to the statement. Cemex is a building materials company that provides high-quality products and reliable services to customers and communities in more than 50 countries. The company started its journey in Bangladesh in 1999, and began sales and distribution activities in May 2000 by importing finished goods from Indonesia. In April 2001, it started manufacturing cement at its own plant in Narayanganj. Currently Cemex Cement Bangladesh is producing Cemex brand Portland composite cement, which was used in some big infrastructure projects such as Khilgaon flyover, Apollo Hospitals Dhaka and Hotel Naz Garden in Bogra.
AFC Health to set up cancer hospital in Chittagong
AFC Health yesterday teamed up with US-based Cancer Treatment Services International (CTSI) to set up a 200-bed cancer hospital in Chittagong. The company will spend BDT 1.1 billion to build the hospital and construction will begin this year and will take up to 20 months to complete, AFC Health said in a statement. AFC Health, which has been providing healthcare services through cardiac care hospitals and pharmacies in Bangladesh since 2012, will own and operate the hospital with full technical collaboration of American Oncology Institute, a subsidiary of CTSI. CTSI President Joseph A Nicholas and AFC Health’s Director for Operations Saidul Amin signed an agreement at Pan Pacific Sonargaon hotel in Dhaka. The specialized hospital promises to provide international standard cancer care with the help of highly experienced local and international consultants, AFC Health said in a statement.
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