$400m up for grabs for key infrastructure dev
The central bank has undertaken Investment Promotion and Financing Facility (IPFF-II) project with over US$400 million disbursement target for infrastructure development in nine key sectors. An official list of the sectors eligible for drawing the funds includes ports, power, environment, industrial estates and water supply. In the meantime, the Bangladesh Bank (BB) has sought applications from interested scheduled banks and non-banking financial institutions (NBFIs) for selection of participating financial institutions (PFIs) in the IPFF-II project. “Scheduled commercial banks in private sector and financial institutions that meet the eligibility criteria and intend to avail financial facility may apply to the project director of IPFF-II project preferably by April 19, 2018,” the BB said in a notification Tuesday.
Green investment rises by 24.61%
Investments under green initiatives increased by 24.61 % or BDT 34,326.75 million as of the October-December quarter of 2017, compared to the previous July-September period, reports BSS. According to the latest data of Bangladesh Bank (BB), total amount invested as green finance stood at BDT 173,801.77 million in October to December quarter of last year. Out of the total invested amount, direct green finance was only 7.78 % or BDT 13,527.65 million and indirect green finance was BDT 160,274.12 million. The official said, 44 banks out of 57 and 13 FIs out of 34 had exposure in green finance, either direct (31 banks and eight FIs) or indirect (29 banks and 13FIs) mode in the Oct-Dec quarter.
Bangladesh Bank sells $10m to four banks
The central bank of Bangladesh has sold US$10 million more to four commercial banks to meet the growing demand for the greenback in the market. The central bank sold the foreign currency to the banks on Tuesday at market rate to settle import payment bills particularly for food grains and fertilizers, according to a senior official of the Bangladesh Bank (BB).
BB’s server crashes again
The central bank’s Credit Information Bureau server collapsed once again yesterday — less than 24 hours after it was brought back to working order after an abrupt shutdown of seven days. The latest disruption means banks’ lending activities are on pause again. The CIB report, which informs on the clients’ credit status, must be collected from the central bank’s server to sanction, extend or renew any loan. Banks are not allowed to provide any loan if the CIB report, which was put up online in July 2011, informs that the clients are defaulters. Earlier on March 6, the CIB server and some other segments of the central bank’s data centre had collapsed due to failure of the cooling system. A BB official told The Daily Star yesterday that the CIB server was brought to order at 5:00pm on Monday, but it collapsed again at 11:00am yesterday due to failure of the hard disks.
Bangladesh’s forex reserves declining
The foreign currency reserves of the Bangladesh Bank is on the decline. The reserves dropped to $31.93 billion from $33.36 billion between February 28 and March 8, according to the central bank. Officials of the central bank say import costs have increased, particularly after the rise in onion and rice prices in India. Moreover, the reserves took a hit after clearing payment for imports of Asian Clearing Union (ACU). A Bangladesh Bank official says there is no reason to panic at the decline of the reserves mainly because of a rise in import cost. “It will be possible to foot import bills for the next six to seven months with the current reserves,” the official added. According to the central bank, the import cost increased by 25.78% in the first six months of the 2017-18 fiscal compared to the same period the previous year. During July to December, food import (rice and wheat) increased by 212%. The import of necessary machinery for setting up industries rose by about 35% during this period while the import of fuel oil and raw material for industries increased by 28% and 15% respectively. In the first six months of this year, Letters of Credit (LC) worth $40 billion were opened. The amount is expected to cross $60 billion at the yearend. Bangladesh’s foreign currency reserves stood at $33.01 billion on June 21 last year. It came down to $32.31 billion on January 17 this year. The country was witnessing a rise in forex reserves over the last few years but the import cost jumped in the election year, putting pressure on the reserves. However, remittance inflow and export income are increasing. Bangladesh Institute of Development Studies researcher Dr Zaid Bakht said there was no reason to panic even though the forex reserves had declined a little due to increased import cost. “The works of some big projects like Padma Bridge and metro rail are going on in full swing. The cost for importing necessary equipment for these projects is increasing,” he noted.
Bank, non-bank officials asked to join March 22 celebration
The financial institutions division has asked the Bangladesh Bank, state-owned commercial and specialised banks, and non-bank entities to join a procession on March 22 for celebrating the country’s elevation to a lower middle-income country. The division issued the directive, signed by its secretary Eunusur Rahman, on Sunday as the government expected that the United Nation would come up with the announcement on March 15 or16.
Mutual fund penetration abysmally low
Bangladesh has among the lowest mutual fund investment in the world, offering a vast untapped opportunity for local asset managers. A mutual fund is an investment fund that gathers capital from a number of investors to create a pool of money that is then re-invested into stocks, bonds and other assets. Investors are effectively shareholders in the fund in proportion to their investment. Bangladesh’s asset under management to gross domestic product ratio is a mere 0.48 percent, according to Brac EPL. In contrast, the ratio is 10.73 percent in India and 31.02 percent in Thailand. The global average is 32 percent. Mohammed Rahmat Pasha, managing director and chief executive of UCB Capital Management, blamed the Bangladeshi fund managers’ poor performance for the abysmally low ratio.
Market price-based calculation of exposure limit creates havoc
Identifying liquidity shortage as the key reason for the sustained market fall, the market operators made a set of demands including revision of exposure limit to help revive the capital market. The representatives of Bangladesh Merchant Bankers Association (BMBA) and DSE Brokers Association of Bangladesh (DBA) said at a press briefing that general investors are panicked over the liquidity shortage. The market price-based calculation of exposure mainly created the liquidity crisis, they said. “There is a serious fund crisis in the capital market. Those who have funds are not able to invest in the market as the bank’s exposure is calculated on the basis of market price,” DBA president Mostaque Ahmed Sadeque told the press briefing. He said cash reserve ratio (CRR) should also be reduced to 5.5 per cent from existing 6.0 per cent. “The DBA earlier sent a letter to the Bangladesh Bank for considering the calculation of exposure limit based on cost price instead of market price. But the BB is yet to consider our proposal.” Sadeque said. He also said high interest rate on deposits offered by the commercial banks is another reason behind the liquidity shortage in the capital market.
Listed cos urge NBR to waive double taxation
Listed companies have urged the National Board of Revenue (NBR) to eliminate multiple taxation on inter-company dividend and establish an introductory version of participation exemption (PE) regime in the country. PE is related to exemption from taxation for a shareholder in a company on dividends received, and potential capital gains arising on the sale of shares. The justification for a participation exemption is to eliminate double taxation of shareholders. Bangladesh Association of Publicly Listed Companies (BAPLC) made the appeal Tuesday when a delegation of the association, led by its vice president Anis A Khan, called on Md Mosharraf Hossain Bhuiyan, chairman of National Board of Revenue (NBR), in the city.
Completion of current projects takes priority in coming ADP
Government’s election-year development programme will be focused on timely implementation of the ongoing projects, instead of undertaking new ones, alongside proper use of resources and optimum output. Officials concerned gave such a preview of the next development budget as the finance and planning authorities are doing the arithmetic of the Annual Development Programme (ADP) for the fiscal year (FY) 2018-19. The new ADP will comprise only the approved projects, says a Planning Commission directive, asking the ministries concerned not to send any project proposals sans approval from the appropriate authorities. Another instruction in the note prohibits sending any proposal on a project for inclusion in ADP 2018-19 that is slated for completion under the revised ADP of FY 2017-18. Projects whose tenures expire on June 30 can be sent for inclusion in the new ADP only after tenure extension, the directive on preparation of the ADP for FY 2018-19 mentioned.
Bangladesh, Singapore trade bodies sign 4 MoUs
Trade bodies and government agencies of Bangladesh and Singapore on Tuesday signed four Memorandum of Understandings (MoUs) for collaboration over ICT, trade and investment. The signing ceremony was held at the opening programme of the Bangladesh-Singapore Business Forum 2018, which was jointly organised by International Enterprise Singapore, Singapore Business Federation and Bangladesh Business Chamber of Singapore (BDCham) at the Shangri-La Hotel in Singapore. Prime Minister Sheikh Hasina witnessed the signing. Of the four deals, the MoU on Collaboration of Investment Activities into Bangladesh was signed between Bangladesh Investment Development Authority (BIDA) and International Enterprise Singapore (IE Singapore). BIDA Executive Chairman Kazi Aminul Islam and Acting CEO of IE Singapore Kathy Lai signed the deal on behalf of their respective sides.
Govt won’t continue energy supply at cheap rate for a long period: Muhith
Finance Minister AMA Muhith Tuesday spelled out the government’s inability to continue providing energy support at cheap rates for long as LNG (liquefied natural gas) is expected to arrive in the domestic market from April. “We shall not be able to continue supplying energy cheaply for a long period. The price of LNG in international market is several times higher compared to local gas price,” he said. Mr Muhith, however, opined for continuation of providing subsidy to ensure that it remains within the capacity of consumers. The minister was speaking as the chief guest at a seminar titled, “Emerging role of BERC in 2021 and 2041,” in a city hotel Tuesday. Bangladesh Energy Regulatory Commission (BERC) organised the seminar in observance of its 16th founding anniversary where Prime Minister’s adviser on energy issues Dr Tawfiq-e-Elahi Chowdhury attended as the special guest. BERC member Md Mizanur Rahman delivered the keynote paper in the seminar, presided over by BERC chairman Monwar Islam.
Summit Power, Mitsubishi sign MOU on 2,400MW LNG plant
Summit Power Interna-tional (SPI) has teamed up with Japan’s Mitsubishi Corp and subsidiary Diamond Gas International to set up a 2,400MW LNG-based power plant and an onshore LNG terminal at Matarbari of Moheskhali at a cost of around US$3.0 (300 crore) billion. Summit Corporation Ltd, a subsidiary of the SPI along with Summit Holdings Limited, Japanese Mitsubishi Corporation and its subsidiary Diamond Gas International Pte Ltd signed a memorandum of understanding (MOU) on Tuesday to this end. The MOU was inked at the Bangladesh-Singapore Business Forum 2018 held in Singapore. The signing ceremony was witnessed by Prime Minister Sheikh Hasina. Singapore’s Minister for Trade and Industry Lim Hng Kiang was also present at the function, according to a company statement released on Tuesday.
NBR expands duty benefit on import of RMG fire safety tools
National Board of Revenue (NBR) has extended the duty benefit on import of fire safety equipment by the export-oriented ready-made garment (RMG) industries to help them comply with the safety rules. It has also relaxed the condition of importing the materials under the benefit by scraping the provision of availing the facility only for once. Now the RMG industries will be able to import the materials enjoying the benefit under certain conditions whenever they need, according to a Statutory Regulatory Order (SRO), issued on March 11. NBR’s Customs Wing issued the SRO, signed by NBR chairman Md Mosharrof Hossain Bhuiyan. In the new SRO, the wing has brought some amendments to its previous SRO, issued in this regard in 2017. It has included a number of fire-safety items in the list of reduced import duty. Import taxes on those items are ranging from 31.07 per cent to 104.79 per cent as per the customs law.
Govt works on 3rd submarine cable
Bangladesh Submarine Cable Company Ltd (BSCCL) has kick-started the preparations for its third undersea cable link to meet the country’s growing demand for data. “It will hardly take few years to consume all the bandwidth the country has right now,” said Mustafa Jabbar, telecom minister. The country’s data consumption is growing at triple digits over the last few years and it will only accelerate with the rollout of 4G service, said Jabbar, who is also a leading entrepreneur in digital business. “To meet that demand we need to take prior preparation, as establishing the link with submarine cable is time-consuming.” The telecom minister has discussed the matter with Prime Minister Sheikh Hasina and she has given her verbal consent, he 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)||$ 60.83||↑0.12||↑0.20%|
|Crude Oil (Brent)||$ 64.72||↑0.08||↑0.12%|
|Gold Spot|| $ 1,328.58||↑2.07||↑0.16%|
Major Currencies Exchange Rates Movement in Last Seven Days *
|USD 1||BDT 83.09|
|GBP 1||BDT 116.26|
|EUR 1||BDT 103.09|
|INR 1||BDT 1.28|
*CURRENCIES AND COMMODITIES ARE TAKEN FROM BLOOMBERG.