Nine banks suffer Tk 194.67b capital shortfall in 2017
Nine banks, six owned by government, suffered an aggregate capital shortfall worth over Tk 194.67 billion in the last calendar year mainly as their swelling classified loans took a toll. Sources in the banking circles indicated a worrying feature of the syndrome as two more banks hit the list of capital-deficient ones during the third quarter of 2017. The nine banks-four state-owned commercial banks (SoCBs) out of total six, three of 40 private commercial banks (PCBs) and two specialised banks (SBs)–were put on the list of capital-deficient ones, according to the central bank officials. Of the two latest entrants, one is a SoCB and another one fourth-generation PCB.
Tk 1,100cr bailout fund sought for Sonali, Janata, BASIC
The Financial Institutions Division has asked the Finance Division to disburse Tk 1,100 crore in bailout funds to three scam-hit state-owned commercial banks in a move that experts termed unethical amidst continuing loan scams. Officials said that the Financial Institutions Division recommended that the Finance Division should dole out Tk 400 crore each to Sonali and Janata banks and Tk 300 crore to BASIC Bank in a proposal to finance division on March 11 despite protests from experts who said that recapitalisation of the scam-hit banks should be stopped to protect wastage of public money.
Open-ended Mutual Funds boom as bourses stay bearish
By a seeming contrast to a bearish run of Bangladesh’s bourses, trading in open-ended mutual funds finds an exponential growth, with the number of investors in ICB tools showing a boom. According to Investment Corporation of Bangladesh (ICB), the number of investors in their funds had risen fast in recent years, coming to nearly 13,000 until June 30, 2016 and booming by nearly 270% to 35,000 in a year to June 30, 2017. Totaling now 41 with their aggregate initial sizes amounting to BDT 207.35 billion. They think such fast bucks may help stabilize the capital market as the wealth companies invest in the funds by analyzing scrips. Open-end fund’s fastest growth had been seen in last two years to December 2017, with 22 such funds being operationalized during the period. As of March 2018, some 37 such funds are in operation and the remaining four either under subscription process or some beginning to receive subscriptions.
Formation of clearing co hits snag as bourses fight for stakes
The formation process of a clearing and settlement company has run into trouble as Dhaka and Chittagong stock exchanges have sought 70% stakes in total in the company, going beyond the ceiling of 65%. Earlier, the Dhaka Stock Exchange sought the highest shareholding ceiling for a single bourse — 49% — in the clearing and settlement company when the port city bourse did not mention any shareholding demand. The Chittagong Stock Exchange has recently demanded 21% stake in the company making the process deadlocked as the DSE is unwilling to lower its demand. A DSE official said that the bourse was trying to find ways to mitigate the issue without lowering the bourse’s demand. Under the central counterparty rules, a clearing and settlement company would be formed for smooth settlement of transactions to be taken place at the bourses.
Move to tax businesses operating in tax havens
A move is underway for taxing the tycoons operating businesses in tax havens by incorporating international legal provisions into Bangladesh’s income-tax law, sources said. At the core of the set of provisions lies Controlled Foreign Corporation (CFC) that enables the country of origin to levy taxes on business operations in another country. Under the provision, Bangladeshi companies having businesses in the low- tax regimes would have to pay a part of tax as per country’s corporate-tax rates, officials said. A CFC is a corporate entity that is registered and conducts business in a different country but controlled and managed by residents of the country of origin. The drafting committee of the new income-tax law is also vetting matters of imposition of tax on mergers and acquisitions, thin capitalisation, General Anti-Avoidance Rule (GAAR), Special Anti-Avoidance Rule (SAR), Base Erosion and Profit Shifting (BEPS) which are used as international best practices in income-tax regime. Sources said some of those provisions may be proposed to be interpolated into the budget for Fiscal Year (FY) 2018-19 as per the Income Tax Ordinance 1984. Talking to the FE, a senior tax official said companies having 51 per cent shares of Bangladeshi owners and operating in low-tax domains or tax havens would have to pay the rest of the amount of tax as per tax rate of Bangladesh as CFC.
Kuwait to provide $51m for infrastructure dev
Bangladesh will receive US$51 million in credit from the Kuwait government to develop urban infrastructure in 53 municipalities across the country. The fund will be utilised for ‘Urban Infrastructure Improvement Project’ to be implemented by the Local Government Engineering Department (LGED). An agreement on the credit was signed between the Kuwait Fund for Arab Economic Development (KFAED) and the Economic Relations Division (ERD) in the city on Tuesday. ERD secretary Kazi Shofiqul Azam and Deputy Director General of KFAED Hamad Al-Omar signed the agreement. Speaking on the occasion, Shofiqul Azam said the fund would help enhance living standards of dwellers in 53 municipalities under eight divisions through developing drainage system, bridges, culverts and lighting facilities.
SC orders BGMEA undertaking over office relocation from Hatirjheel
The Appellate Division of the Supreme Court (SC) asked on Tuesday the Bangladesh Garment Manufacturers and Exporters’ Association (BGMEA) to give an undertaking saying that it will not file any petition seeking more time to relocate its office from the city’s Hatirjheel area, reports UNB. The SC will consider their time petition this time once it gets the undertaking in this regard. A four-member SC bench, led by Chief Justice Syed Mahmud Hossain, took the decision. Advocate Kamrul Haque Siddiqui and Imtiaz Moinul Islam stood for the BGMEA while Attorney General Mahbubey Alam for the state.
Listed ceramic makers’ profit leapt in 2017
Listed ceramic companies saw higher growth in profit last year owing to an increase in demand from the real estate sector and export markets. Five companies are listed on the Dhaka Stock Exchange. Of them, three posted more than 150 percent growth in profit in 2017 from a year earlier. Monno Ceramic’s profit grew a staggering 676.38 percent to Tk 4.27 crore, while Standard Ceramic’s profit rose 209.24 percent to Tk 1.17 crore. Shinepukur Ceramics’s profit went up 188.86 percent to Tk 3.82 crore and RAK Ceramics’ 11.17 percent to Tk 101.86 crore, the highest among the listed ceramic makers, according to an analysis of Prime Finance and data from the DSE. Only Fu-Wang Ceramic’s profit declined — by 36.49 percent to Tk 8.07 crore.
Furniture industry posts 31.98pc growth in 8 months
The furniture sector fetched export earnings of USD 37.64 million in the first eight months (July–February) of the current fiscal year (2017–18). This was up from the USD 28.52 million recorded for the same period in the previous financial year, thus showing a steady growth of 31.98 per cent. Bangladesh Furniture Industries Owners’ Association (BFIOA) president Selim H Rahman told The Independent: “China had been the furniture-sourcing country throughout the world during the last couple of decades. But it has started shifting towards high-tech industries and therefore we have a huge opportunity to capture the global market.” Rahman, who is also the managing director of Hatil Furniture, said the government’s decision to provide a 15 per cent cash incentive on furniture export has also boosted the export growth. “Our furniture is being exported to Middle Eastern countries, Canada, Nepal, Bhutan, India, Malaysia, the US, Belgium and other European countries. The products have become popular because of their quality and innovative designs,” he added. He also said that Hatil Furniture exports products worth around USD 100,000 to the Middle East, Canada, Nepal and Bhutan every month. The domestic furniture market has been growing at a rate of 15-20 per cent a year, he added.
Rice import leaps due to production shortfall
Rice imports jumped in the current fiscal due to what officials said huge production shortfall. Already 34.55 lakh tonnes of rice were imported by the government as well as merchants between July 2017 and March 21, according to the records of the Food Ministry. But only 1.3 lakh tonnes of rice was imported throughout fiscal 2016-17, shows Food Ministry records. The previous fiscal’s entire amount was imported by the private sector, Food Ministry officials told New Age. Agriculture economists think that imported rice helped stabilize the domestic rice market. But the imports dashed the government’s food security claims, they said. They said frequent import of rice and wheat spending foreign exchange was far from healthy symptom for domestic cereal production programme. They said that domestic rice output dropped in all the three seasons, aus, aman as well as the boro due to recurrent floods between April and August. Blast attacks also took a toll on this fiscal’s rice production, said agricultural officials. According to Bangladesh Bank statistics, increase in rice imports began in July 2017.
Govt won’t allow fish import to protect local industry: Minister
The government will not allow fish import for protecting the local fisheries industry, Fisheries and Livestock Minister Narayon Chandra Chanda said, reports BSS. “We need to discourage import of fishes and milk power for producing adequate fish, meat and milk of international standard to fulfill our deficiency,” said the minister while speaking at a citizen’s dialogue at CIRDAP auditorium here on Sunday. Although Bangladesh has secured the 4th position in sweet water fishes and black Bengal goat production in the world, the contribution of meat and fishes to the GDP is very little, he said. The minister, however, said, “We must earn people’s confidence in local fish, meat, milk and egg production so we can overcome the necessity of import.”
Thrust on proper agri data for attaining SDGs
A gradual decline in arable land, growing population and resource constraints are key challenges for the country to be addressed in order to achieve the Sustainable Development Goals (SDGs). Experts came up with this remark at a seminar styled ‘The role and steps taken by the Department of Agricultural Extension (DAE) to achieve SDGs’ held at Khamarbari in the city on Tuesday. They also identified non-availability of proper agricultural data as another barrier to improving the situation. DAE Director General Mohammed Mohsin chaired the event, while Senior Secretary of agriculture ministry Md Moinuddin Abdullah was present as the chief guest and Additional Secretary Nazrul Islam as special guest.
Benefits of food production boom bypass poor
Bangladesh is one of the worst countries in the world where around 44 per cent of Bangladeshi women suffers from anaemia due to lower intake of nutritious food, according to a report. The report also said that some 50 per cent of the country’s girl-child is suffering from malnutrition, of which 35 per cent are underweight. At the same time, some 32 per cent of the country’s adolescent girls (10 to 18 years of age) are stunted compared with their age, which is 42 per cent for women as around 60 per cent of females eats non-nutritious food. The report was presented on Tuesday at a national seminar on ‘Food situation and food rights of women and girl-child’ at the CIRDAP auditorium in the city. Right to Food Bangladesh (RFB) with the support from Christian Aid organised the seminar. Food minister Qamrul Islam addressed the programme as the chief guest. Director of the Institute of Disaster Management and Vulnerability Studies of Dhaka University Professor Mahbuba Nasreen, Department of Women Affairs director general Kazi Rowshan Akter, joint secretary of the Women and Children Affairs Ministry Abdul Karim, ActionAid Bangladesh (AAB) country director Farah Kabir, Christian Aid Bangladesh country director Shakeb Nabi and RFB general-secretary and WAVE Foundation executive director Mohsin Ali also spoke at the seminar. RFB vice-chairman Khandker Ibrahim Khaled chaired it.
Training goes digital
Holding a training session for a large group of employees posted across Bangladesh would be a backbreaking task for any company headquartered in Dhaka. To make it a success, the firms have to bring their staff members together, manage their accommodation, food and other facilities, arrange the venue, develop training curriculum, and put in place many other things. Now e-learning platforms have come up as saviour of the organisers of such events. Summit Communications Ltd, a local telecom networking provider, is taking advantage of the platforms to improve the skills of their employees. Summit is taking the service of sudoksho.com—an e-learning platform—which has designed an exclusive course for its employees.
Uber to raise presence in S Asia after SE Asia departure
Uber, a US-based ride sharing entity, would increase its presence and investments in South Asian countries including Bangladesh despite the entity’s agreement with Grab, another ride sharing company, to merge its Southeast Asian business, an Uber statement said on Tuesday. The Uber-Grab merger would not cover and would not have any impact on Uber’s Bangladesh operations, the statement said. ‘The great news about our Grab deal is that it allows us to double down to invest aggressively in our core markets, which includes the India and South Asia region, namely, India, Bangladesh and Sri Lanka,’ the statement said. ‘We are 100 per cent committed to serving our riders and driver partners in Bangladesh,’ it said. Under the Grab-Uber agreement, around 500 colleagues across the region will transition to Grab, and over the coming weeks Uber customers would be moved to Grab’s apps. The Grab-Uber merger deal would impact or involve 10 Southeast Asian countries — Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
Appollo Ispat’s new plant starts operation April 1
The commercial operation of Appollo Ispat Complex’s IPO-funded project will start from April 1. It was stated to be a green and environment-friendly (no use of acid & lead) most advanced radiant tube furnace (RTF) technology-based NOF-CGL plant, having 72,000 tonnes of annual capacity. The estimated revenue of the project will increase by BDT 5,400 million per annum with the utilisation of 80% production capacity, according to the disclosure. The cost of the project will be BDT 2,038.69 million and its useful life will be 15-20 years. Machine supplier is ESMECH Equipment (Pvt.) Ltd. technology from SMS Germany & ESMECH India joint venture, it added. In 2013, the corrugated and galvanized sheet manufacturing company raised BDT 2.20 billion through issuing 100 million ordinary shares of BDT 22 each, including a premium of BDT 12 per share. According to the IPO prospectus, Appollo Ispat used around BDT 1.53 billion from the IPO proceeds to repay bank loans, BDT 600 million for project development and the rest to bear the IPO expenses. The company’s earnings per share stood at BDT 0.03 for October-December quarter of 2017 as against BDT 0.69 for the corresponding period of 2016. In six months from July to December of 2017, the EPS was BDT 0.10 against BDT 1.36 for the same period a year ago.
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)||$ 64.74||↓0.51||↓0.78%|
|Crude Oil (Brent)||$ 69.66||↓0.45||↓0.64%|
|Gold Spot||$ 1,346.61||↑1.56||↑0.12%|
Major Currencies Exchange Rates Movement in Last Seven Days *
|USD 1||BDT 83.46|
|GBP 1||BDT 118.41|
|EUR 1||BDT 103.65|
|INR 1||BDT 1.29|
*CURRENCIES AND COMMODITIES ARE TAKEN FROM BLOOMBERG.