Bangladesh Bank wants list of goodies among bank borrowers
The central bank has sought information about good borrowers from all the commercial banks, as the goodies would enjoy financial incentives. “We’ll issue an instruction for furnishing the information (in prescribed form) to know about the number of good borrowers, amount of rebate on interest and other relevant matters from the banks,” a senior official of Bangladesh Bank (BB) told the FE Wednesday. He also said the central bank may assess the impact of the good credit culture on the country’s banking sector after receiving such data. Earlier on March 19 last year, the central bank had issued a policy for good borrowers for the first time aiming to establish a sound credit culture-in contrast to reported pervasive loan-default culture.
Aided special fund fuels SME growth
A foreign-aided special fund fuelled performance of small and medium enterprises (SMEs) with turnover, profit and job creation marking significant increases. Bangladesh Bank’s SME and Special Programmes Department gave an account of such advances, crediting the improvements largely to loans created under Japan International Cooperation Agency’s funding. It said the fund worth Japanese Yen (JPY) 5.0 billion helped increase SME lending by 27.51%. Some 36.79% increase is also found in medium-and long-term lending amounts. The central bank data show that 513 SMEs were able to increase turnover by 49.35%, profit by 16.3% and employment by 15.7% after having received high-compliance credits. The data were accumulated at the end of an umbrella project for funding titled ‘Financial Sector Project for the Development of SMEs (FSPDSMEs)’. Seventy-four% of the SMEs are from manufacturing sector and 20% of the loan-recipients repeatedly utilised JICA loan, the BB department said.
Private sector credit growth rises to 14.82% in January
The country’s private sector credit growth increased sharply to 14.82% in January, exceeding the growth ceiling of 14.80% set for June in the monetary policy statement of the January-June this year as the clients are now taking credit from banks due to lower rates of interest on the banks’ loan products. The private sector credit growth in the first month of this year also surpassed its three-year-high growth of 14.19% achieved in December 2015. Overburdened with excess liquidity, most of the banks are now disbursing consumer loans with an interest rate of 13% to 14%, a Bangladesh Bank official said. Credit flow to the private sector stood at BDT 6,221.9 billion in January 2016 against BDT 5,418.8 billion in the same month of 2015. It was BDT 6,205.1 billion in December 2015 against BDT 5,434.1 billion in December 2014.
Exports cross USD 22.0 billion in first eight months of fiscal year
Bangladesh’s export earnings posted a nearly 9.0% growth to USD 22.12 billion in the first eight months of the current fiscal year, according to Export Promotion Bureau data. The provisional data showed that in the months from July the country earned USD 22.12 billion from exports, which was 8.92% higher compared to USD 20.03 billion a year ago. Readymade garment sector, the major industry, was able to fetch USD 18.13 billion during the period, making a 9.52% increase from USD 16.55 billion one year earlier. The woven sector exported products to receive USD 9.48 billion and the knitwear products to get USD 8.64 billion. The data said in February the exports registered a 13.60% growth to USD 2.85 billion from USD 2.51 billion in the same month last year. The figure exceeded the target by 4.90%. The target was set at USD 2.72 billion for the month. In February, the apparel exports increased by 12.29.
Bibiyana II power plant starts operation
The country’s largest independent power plant (IPP), the Summit Bibiyana II having a generating capacity around 341 megawatts (MW) of electricity, has started commercial production. Summit Bibiyana II Power Company Limited (SBIIPCL), a company owned by Summit Corporation Ltd and General Electric (GE) of the USA having 80% and 20% stakes respectively, has implemented the power plant project, a company insider said. The power plant is located at Parkul village in Nabiganj upazila of Habiganj district, some 180 kilometres northeast of Dhaka. Multilateral donor agencies — Asian Development Bank (ADB), International Finance Corporation (IFC) and Islamic Development Bank (IDB) — provided USD 210 million to implement the project. This is the largest amount of direct loan given to any Bangladeshi private sector project by any of the three development agencies. It is the largest project finance transactions carried out by a privately-owned local company. The loan repayment period is approximately 14 years.
Government plans to invest with IOCs for offshore exploration
Energy adviser to the prime minister Tawfiq-e-Elahi Chowdhurty on Saturday said that the government was planning to invest together with the international oil companies in oil and gas exploration in the Bay of Bengal to facilitate the search for new deposits. ‘We can invest USD 200.0 million to USD 300.0 million in offshore exploration through state-run Bapex as the IOCs are not interested in exploration in the wake of rise in cost of investment,’ he said. He was addressing a seminar, hosted by the Dhaka Chamber of Commerce and Industry, on prospects and challenges for industries in the energy and power sector in the 7th Five-Year Plan at the DCCI auditorium in the city. Tawfiq said that the cost of investment in oil and gas exploration shot up in the wake of price crunch of natural gas following fuel oil prices on the international market.
IDB to provide USD 248.3 million for three Bangladesh projects
The Islamic Development Bank (IDB) is going to provide USD 248.3 million credit assistance to Bangladesh against three projects in power sector, sustainable housing for low-income urban communities and development of a technical teacher training institute. Out of the USD 248.3 million credit assistance, the IDB is providing USD 220.0 million loan for the 400-MW Ashuganj (East) power plant efficiency improvement project in Bangladesh, USD 20.0 million for the Sustainable housing for the low-income urban communities and USD 8.3 million for a technical teacher training institute project in Bangladesh. Talking to UNB, an official at the Economic Relations Division (ERD) said the loan agreements for these three projects between the government of Bangladesh and the IDB are likely to be signed by March next.
World Bank identifies 5 key areas for growth
The World Bank has identified five key areas where concerted efforts over the next 3-5 years could lead to creation of more and better jobs. The five areas are: inland connectivity and logistics, energy, regional and global integration, urbanization and delta management. Bangladesh has largely neglected investment in infrastructure, the WB said in a report — “A Systematic Country Diagnostic”. Public investment in infrastructure was less than 2% of the gross domestic product, and it lags far behind its regional competitors in infrastructure quality, it said. Total investment in hard infrastructure in China, Thailand and Vietnam exceeded 7% of their GDPs. To attain 7.5-8% growth, Bangladesh will require investment of at least 33% of GDP and an increase in infrastructure investments to around 10% of GDP per year, according to a WB estimate. The suggestions came in the 200-page report which identifies key priorities for Bangladesh to reduce extreme poverty and boost shared prosperity.
Public Private Partnership projects to draw USD 14.0 billion in investments
Forty-three projects, now in the pipeline of Public Private Partnership (PPP) initiative, are expected to draw some USD 14.0 billion investment, reports UNB. This was informed at the first Board of Governors meeting of the PPP Authority held at the Prime Minister’s Office on Thursday with Board of Governors Chairperson and Prime Minister Sheikh Hasina in the chair. PM’s Press Secretary Ihsanul Karim briefed reporters after the meeting. He said the meeting reviewed the implementation and progress of PPP activities in the country for the last couple of years. The meeting was also informed about the development of the PPP projects, selecting private partners, possible time for signing the final agreements and the possible amount of overall investment. The meeting was also informed that the final agreements on six projects work signed.
Raw materials import-RMG export gap raises questions
The country imported a substantial volume of raw materials, especially raw cotton, cotton yarn, woven fabrics and synthetic fibres, last year to feed local textile and ready-made garment (RMG) industries, said industry insiders. Import of key raw materials had increased by about 5-10% last year despite a comparatively slow growth rate in RMG export. The sector saw a 4.08% export growth in the last fiscal year, 2014-15. However, it failed to keep pace with the growth of imported input. According to Bangladesh Textile Mills Association (BTMA), the country imported about 1.32 million tons (6.1 million bales) of raw cotton in 2015, up by 10% from 1.20 million tons (5.5 million bales) last year. At present, local textile mills meet 90% of the demand for raw materials for knitwear sub-sector of the apparel industry and 40% for woven sub-sector. The country imports more than 95% of cotton to feed the industries, as the domestic production can hardly meet 3-5% of the country’s total demand. Last year, it produced about 1, 45,000 bales of cotton.
BSEC asks for accounts on liquidation of two MFs
The securities regulator asked on Thursday the trustees of the AIMS First Guaranteed Mutual Fund and the First Scheme of the Grameen Mutual Fund to submit accounts by completing liquidation of these two funds duly, officials said. The regulatory instruction came at a meeting held at the office of the Bangladesh Securities and Exchange Commission (BSEC). “In Thursday’s meeting the trustees informed us about the amount of shares so far sold from the portfolios of the funds to complete the liquidation,” said a BSEC official. He said the regulator asked the trustees to submit the accounts by completing liquidation of AIMS First Guaranteed Mutual Fund and the First Scheme of the Grameen Mutual Fund. Referring to the trustees, the BSEC official said the asset management company (AMC) concerned has almost completed the sale of shares. As per the BSEC decision, which stands valid after the legal battle in the highest court, the trustees and the AMC are working on completing liquidation of these two closed-end MFs.
Government earnings from DSE drop 30.6% in February
The government revenue earnings from the Dhaka Stock Exchange (DSE) fell 30.6% month-on-month in February on the back of falling trade volumes. The government bagged tax worth BDT 107.94 million in the second month of 2016, which was BDT 155.42 million in January, according to statistics from the DSE. The government earned the amount on TREC (trading right entitlement certificate) holders’ commission and share sales by sponsor-directors and placement shareholders. Of the total earnings in February, BDT 86.42 million came from the TREC holders’ commission and BDT 21.52 million from the share sales by sponsor-directors and placement holders, the DSE data showed. The DSE, on behalf of the government, collects the revenue as TREC holders’ commission and share sales by sponsor-directors and placement holders at the rate of 0.05% and 5.0% respectively and deposits the amounts to the government exchequer. In eight months (July-February) of the current fiscal year (FY), the government earning stood at BDT 1063.67 million from the DSE, down by 12.97% over the same period in the previous fiscal.
World Stock and Commodities
|Index Name||Close Value||Value Change||Percentage Change|
|Crude Oil (WTI)*||$35.92||+1.35||+3.91%|
|Crude Oil (Brent)*||$38.72||+1.65||+4.45%|
|Dow Jones Industrial Average||17,006.77||+62.87||+0.37%|
|USD 1||BDT 78.43*|
|GBP 1||BDT 111.59*|
|EUR 1||BDT 86.31*|
|INR 1||BDT 1.17*|
*Currencies and Commodities are taken from Bloomberg.