NBFI allowed to invest 50.0% of capital in special purpose funds
Non-bank financial institutions will be allowed to invest up to 50% of their paid-up capital in non-listed special purpose funds like alternative investment fund, said a Bangladesh Bank circular issued on Wednesday The aggregate investment of any NBFI in such funds like alternative investment fund, special purpose vehicle or any other similar fund registered with the Bangladesh Securities and Exchange Commission must not exceed 50% of its paid-up capital, the BB circular said. The investment in such a single fund made by any NBFI, however, must not exceed 10% of its paid-up capital or 20% of that particular fund, whichever is lower, the circular said. The capital market regulator, BSEC, in June last year enacted alternative investment rules in a bid to pool funds from high net worth local and foreign investors. It said that the investment decision in such funds must be approved by the board of directors of the NBFIs. The NBFIs will also have to obtain approval from Bangladesh Bank before making commitment to invest in such funds. The institutions will also have to submit their latest information on capital, liquidity, quality and quantity of assets and liabilities along with all the information related to the funds to the central bank.
Bangladesh Securities and Exchange Commission seeks one year extension
The securities regulator has submitted its proposal to the ministry of finance (MoF) for extending the tenure of IPO (initial public offerings) quota for affected investors by one year more, officials said. The Bangladesh Securities and Exchange Commission (BSEC) recently took the decision of submitting a proposal regarding extension of the tenure of IPO quota considering the market situation. Small investors, who were affected during 2010-11 stock market debacle, are availing 20% quota under the capital market refinancing scheme. The tenure of small investors’ quota facility in IPOs will end on June 30 this year. Rahman said affected investors will be able to avail the quota facility till June 30, 2017, if their proposal is approved by the MoF. Apart from 20% quota for affected investors, 10% quota is preserved for mutual funds and 10.0% for non-resident Bangladeshis (NRBs) in the IPOs. Earlier, the government disbursed BDT 9.0 billion as loan under the capital market refinancing scheme.
Bangladesh needs to meet policy challenges to break +6% growth cycle: Asian Development Bank
The Asian Development Bank (ADB) has listed many policy challenges facing the Bangladesh economy though it has kept the growth projection unchanged at 6.7% for the current fiscal. In its latest outlook the Manila-based development financier said government employees’ pay hike has spurred consumption and steady readymade garment exports helped out the economy. However, the ADB painted a grim picture of the remittance front that feeds the economy substantially. The multilateral financier had earlier in September projected the same figure of growth for the current fiscal year (FY) 2015-16. Private consumption is rising, spurred by wage increases in public sector. But growth in remittances remained subdued, leading to stagnancy there, the ADB noted in its release Wednesday. The Asian bank sees many policy challenges in Bangladesh, like boosting investment and creating enabling business environment which are vital for stimulating growth to break the six-plus cycle. “Implementing VAT Act on time, removing anti-export bias, rationalizing administered prices of oil and electricity, strengthening financial sector disciplines remain the key policy challenges,” it observed in the economic outlook.
World Bank insists lifting ban on private sector in petroleum business
The World Bank has proposed lifting the restriction on the operation of private petroleum marketing companies in the local market and deregulation in petroleum prices so that consumers and businesses get benefit of sliding global oil prices. Urging the government for adopting automatic pricing formula, the WB in an official document submitted to the finance ministry a couple of days back asked the policymakers for structural changes on managing fuel oil import, marketing and pricing. Finance ministry officials, however, said the issue needed to involve higher authorities of the government as the suggestions from the multilateral lending agency came after the finance minister AMA Muhith had approached the World Bank a month back. The document also suggested to impose carbon tax on motorists, but would not elaborate the implementation mechanism. The Bank said the needed reforms require adoption and adherence to the pricing formula, and an action plan for opening up oil marketing to the private sector, with clear monitoring steps, designated responsibilities, and setting target dates for implementation.
Bangladesh to buy 1.3 million tons of oil from KSA, UAE
Bangladesh will import 1.3 million tons of crude oil from Saudi Arabia and the United Arab Emirates (UAE) at a cost over BDT 43.98 billion. The cabinet committee on public purchase approved Wednesday this big buy of petroleum fuel alongside seven other projects worth a total of BDT 51.0 billion. Eastern Refinery Ltd will import 0.6 million tons of crude at a cost of BDT 21.33 billion from Abu Dhabi National Oil Company (ADNOC) while 0.7 million tons at BDT 22.65 billion from Saudi Arabian Oil Company (SAUDI ARAMC) for January- December 2016 calendar year.
State, private agencies owe BDT 76.56 billion to Bangladesh Power Development Board
Non-payment of over BDT 76.56 billion in dues by its customers has put the Bangladesh Power Development Board (BPDB) in serious liquidity trouble, officials said. The Board usually makes payments to creditors and finance its development projects with its sales proceeds. The development activities have been suffering due to the non-payment of arrear electricity bills by the state and other agencies, they said. The statutory body is likely to request the Ministry of Finance to help recovery of the arrear power bills or arrange an inter-ministerial meeting for tackling the existing liquidity crisis, a source concerned, who deals with financial issues at the BPDB, said. Of the defaulters, state entity Dhaka Electric Supply Authority (DESA) (former) owes BDT 28.04 billion, private/non-government organizations owe BDT 13.64 billion, Rural Electrification Board (REB) owes BDT 13.19 billion, Dhaka Power Distribution Company Limited (DPDC) BDT 11.29 billion and Dhaka Electric Supply Company Limited (DESCO) BDT 5.27 billion, according to BPDB data. DPDC, DESCO, REB and West Zone Power Distribution Company Ltd (WZPDCL) are bulk customers of the Board. On the other hand, the rest of the public and private agencies are its retail customers.
Allow investment of undisclosed money: realtors
Local realtors have proposed the government to allow investment of legally-earned undisclosed money in real estate sector without any question to check capital flight from the country. They urged the National Board of Revenue (NBR) to re-introduce the provision in Income Tax Law from the budget for the next fiscal year, 2016-17, and continue it for at least five to 10 years. Real Estate and Housing Association of Bangladesh (REHAB) placed the proposal at a pre-budget meeting at NBR on Wednesday. Many countries are offering the facility of investment in second home that is driving away Bangladesh’s money to those countries, they said. The government can bring the people under tax-net with the opportunity of declaring undisclosed income, said REHAB Vice-President Liakat Ali Bhuiyan. Currently, people can invest their undeclared money in any sector, but there is no ‘indemnity’, as the government agencies can ask questions on source of their money. The REHAB leader proposed to incorporate the indemnity in the income tax ordinance 1984.
World Stock and Commodities
|Index Name||Close Value||Value Change||Percentage Change|
|Crude Oil (WTI)*||$37.80||(0.52)||(1.36%)|
|Crude Oil (Brent)*||$38.86||(0.4)||(1.02%)|
|Dow Jones Industrial Average||17,716.66||+83.55||+0.47%|
|USD 1||BDT 78.38*|
|GBP 1||BDT 112.37*|
|EUR 1||BDT 88.67*|
|INR 1||BDT 1.18*|
*Currencies and Commodities are taken from Bloomberg.