Government’s wholesale approval pushes insurers into unhealthy race
The country’s insurance sector is going through a tough time as wholesale approval to insurance companies by the Awami League-led government at the far end of its last term pushed the insurers into an unhealthy competition for survival, senior officials of insurance companies told New Age. Due to the unhealthy competition in terms of getting new policies and hiring skilled manpower, new companies are spending BDT 120.0 -BDT 130.0 against each new insurance policy of BDT 100.0, they said. To survive, all the 13 life insurance companies approved by the government during 2013-14 are spending management expenses beyond the allowable limit set in the insurance rules. An Insurance Development and Regulatory Authority data showed that the excess management expense of the 13 life insurance companies increased to BDT 454.2 million in 2015 from that of BDT 449.2 million in the previous year. As per the rules, insurance companies in the first three years of inception are allowed to spend highest 97.0% of their first year’s premium earnings as management expense and 22.0% of the second year’s premium earnings. Best Life Insurance Company, a new insurance company, spent BDT 44.1 million in the year of 2015 in excess for management expanses violating insurance rules, the IDRA data showed.
CMC Kamal, Alif Unitex merger gets green signal
The High Court has given the go-ahead for the two textile firms – CMC Kamal Textile Mills and Alif Unitex – to merge, continuing a trend in the industry to trim down administrative costs. Under the amalgamation deal, a total of 76,050,000 ordinary shares of BDT10 each of CMC Kamal will be issued to the shareholders of Alif Unitex at an exchange ratio of 8.45 shares of the transferee company for each share of the transferor company. CMC Kamal Textiles, a listed company in which Planning Minister AHM Mustafa Kamal once had a stake, said they received the High Court order on March 16 for merger of non-listed Alif Unitex with the company, according to a statement issued yesterday. The merger will be effective subject to permission of regulators, particularly Bangladesh Securities and Exchange Commission. In May 2015, the CMC Kamal decided to merge with Alif Unitex, a concern of business conglomerate Alif Group. All the properties that include the title of land, building, other movable and immovable assets, tights, patents, interests, goodwill, licences, liabilities, obligations, claims etc. of every description of Alif Unitex will be transferred to and vested in the CMC Kamal as per procedures of the scheme of amalgamation, said the company. Yesterday at the Dhaka Stock Exchange, share prices of CMC Kamal rose slightly 0.5% to BDT 21.8 a share.
World Bank to help Bangladesh Bank recover stolen money
The World Bank has proposed to help the Bangladesh Bank recover the stolen money and enhance cyber security, according to a WB letter sent to the central bank yesterday. If needed, the multilateral lender said, it is ready to extend support to the BB in resolving any issues with the US Federal Reserve. “Meetings with the Federal Reserve and the US Department of the Treasury can be arranged during the WB’s spring meeting in the US next month,” the WB said. The WB offer came following the hacking of around USD 101.0 million from the BB’s foreign currency account with the Federal Reserve Bank of New York. However, prompt actions helped the BB recover some USD 20.0 million from Sri Lanka. The rest USD 81.0 million, which was taken through the Philippines banking system, could not be recovered yet. Earlier, the Bangladesh’s central bank said it would take help of the WB to get back the stolen funds under the WB’s Stolen Asset Recovery Initiative (StAR), which is a partnership between the World Bank Group and the United Nations Office on Drugs and Crime. StAR works with developing countries and financial centres to prevent the laundering of the proceeds of corruption and to facilitate more systematic and timely return of stolen assets.
Bangladesh National Insurance to allocate 17.7 million shares
Bangladesh National Insurance Company will allocate 17.7 million ordinary shares among successful applicants after the lottery of initial public offering (IPO) was held Sunday, officials said. The lottery program was held at 3:00 pm at the Institution of Engineers, Bangladesh (lEB) in Dhaka. The IPO result is available on the websites of Dhaka Stock Exchange (DSE), Chittagong Stock Exchange (CSE) and the company. Abdul Baset Majumder, chairman of the company, inaugurated the lottery program, where representatives of stock exchanges, issue managers and Central Depository Bangladesh Limited (CDBL) were present, among others. IPO subscription of the non-life insurer, which floated 17.70 million ordinary shares at an offer price of BDT 10 each, was held between February 17 and February 25 and raised a fund worth BDT 177.0 million from the public. The insurance company received above BDT 7.1 billion against public issue of BDT 177.0 million, which is oversubscribed by around 40 times, according to the company’s statement.
Arrest warrants against probe body chief, former SEC man: 1996 stock market scam
The special tribunal on capital market issued Sunday arrest warrants against the chief of probe body on 1996 stock market scam Amirul Islam Chowdhury and a former executive director of the securities regulator M A Rashid for failing to appear before the tribunal as directed. The tribunal had earlier advised both of them to appear before it on Sunday for cross-examination in the case of Premium Securities, a brokerage firm which was disposed of by owners after 1996. After the 1996 stock market scam, the government formed a probe body, headed by former vice chancellor of Jahangirnagar University Amirul Islam Chowdhury. Other members of the body were A T M Zahurul Islam and Maniruddin Ahmad. “The tribunal issued arrest warrants against them for not attending the tribunal on Sunday,” said Masud Rana Khan, a lawyer of the securities regulator. “The tribunal fixed March 27 for cross-examination of the Premium Securities case,” he added. In the light of the probe body’s report on the 1996 stock market scam, the securities regulator filed a case in 1997 against former chairman of Premium Securities A Rouf Chowdhury, former managing director Mashiur Rahman and two directors Sayed H Chowdhury and Anu Jaigirdar. A Rouf Chowdhury is the chairman of Rangs Group, whereas Sayed H Chowdhury is the chairman of HRC Group. The accused are presently on bail, granted by the tribunal in September 2015.
SDGs: financing gap is USD 94.0 billion: WB economist says at ICCB dialogue
Bangladesh requires an additional investment of up to USD 93.9 billion annually to achieve the sustainable development goals (SDGs), said a World Bank economist yesterday. Currently, the annual investment stands at USD 59.5 billion against the estimated requirement of USD 109.4 billion to USD 153.4 billion to attain the 17 SDGs by 2030, according to Zahid Hussain, lead economist of the WB’s Dhaka office. The estimate for financing need is based on an approximation that USD5 trillion to USD 7.0 trillion of additional investment will be needed per year to attain the SDGs in all countries. The financing challenge will remain even after the seventh five-year plan, which would run from fiscal 2015-16 through fiscal 2019-20, said Hussain at a dialogue — SDGs: Challenges for Bangladesh. The International Chamber of Commerce (ICC)-Bangladesh organized the event at the capital’s Sonargaon hotel.
World Stock and Commodities
|Index Name||Close Value||Value Change||Percentage Change|
|Crude Oil (WTI)*||$39.00||(0.44)||(1.12%)|
|Crude Oil (Brent)*||$41.01||(0.19)||(0.46%)|
|Dow Jones Industrial Average||17,602.30||120.81||0.69%|
|USD 1||BDT 78.38*|
|GBP 1||BDT 113.46*|
|EUR 1||BDT 88.33*|
|INR 1||BDT 1.18*|
*Currencies and Commodities are taken from Bloomberg.