Most banks operate sans risk coverage
Most commercial banks in the country have been operating without risk coverage even though they are vulnerable to financial crimes like burglaries and skimming, a spot survey reveals. The bankers appear blissfully oblivious of a policy on overseas reinsurance, styled, the financial institutions’ comprehensive crime insurance, available in the country since mid-2015. There is scope for introducing more such polices in the country with foreign reinsurance supports, but many believe lack of awareness about such safeguards left it in oblivion as an option. However, only three commercial banks out of 57 — AB Bank, Bank Asia and Dubai-based Bank Al Falah — are insured under the policy. On the other hand, the affected banks are now compensating clients for the recent burglaries through ATM skimming by using their cards. The heists, inter-alia, affected their profits, though marginally. Top executives at some banks said this is a new development in Bangladesh and they are observing the phenomenal cyber-attacks on bank coffers.
City Capital raises BDT 1.0 billion thru commercial paper
The City Bank Capital arranged commercial papers worth BDT 1.0 billion for the Max Infrastructure Limited (MIL) recently. The investors to the commercial paper are Bangladesh Infrastructure Finance Fund Limited (BIFFL), the Premier Bank Limited, NRB Bank Limited, Industrial Promotion and Development Company of Bangladesh Limited (IPDC). The closing ceremony of commercial paper subscription was held at the Lakeshore Hotel in Gulshan recently. MAX Infrastructure Limited, a concern of the MAX Group, started its journey in the railway segment as sub-contractor for foreign contractors and suppliers of track fittings. Over the years, the company has grown to engage in infrastructure development, and spearheads turn-key projects of any size, complexity and nature in railway construction and infrastructure in Bangladesh.
Drug makers to get a boost
The government has started the process of allotting plots at the active pharmaceutical ingredients (API) industrial park, which promises to propel Bangladesh to the next stage as a drug exporter. The Bangladesh Small and Cottage Industries Corporation, the developer of the park for API or pharmaceutical raw materials, has already invited applications from local companies for plots in the industrial enclave. The deadline for applications is March 27. Work to develop the API industrial park began in 2008 on 200 acres of land in Munshiganj district by the Dhaka-Chittagong highway. The park was built under the public-private initiative with the Bangladesh Association of Pharmaceutical Industries (BAPI). All formalities, including plot allotments, will most likely be completed by June this year, said SM Shafiuzzaman, secretary general of the BAPI. The park’s 42 plots will only be allocated to BAPI members and the association has already received applications from 32 companies for a total 57 plots, he said. Since the demand is higher, BAPI will now scrutinize applications on the basis of the firms’ ability and make recommendations for plot allocations At present, the local pharmaceutical industry, which churns out about 8,000 generic drugs, has to import the majority of the raw materials Although several local firms currently manufacture the pharmaceutical raw materials, production is not enough to meet the demand, said industry insiders.
Japan, Australia emerge as shining market for Bangladesh exporters
Two non-traditional markets — Japan and Australia — have appeared as promising export destinations for Bangladeshi exporters as an encouraging export earnings growth has been registered from the markets for last couple of months. The country’s export earnings from Japan in the July-February period of the financial year 2015-16 increased by 14.9% to USD 711.5 million from USD 619.0 million in the same period of the FY15, according to the Export Promotion Bureau data published on Sunday. The data showed that the earnings from Australia in the first eight months of the FY16 amounted to USD 488.2 million which is 21.0% higher than the earnings of USD 403.6 million in the same period of the FY15. Exporters expect that Japan will be the next billion dollar market for Bangladesh by the end of the current financial year while the earnings from Australia will witness a significant increase by next fiscal as the country has shifted its procurement from China. According to the EPB data, the promising export earnings growth from Japan and Australia continued based on the performance of the readymade garment sector.
Tax waiver facilities to come under high-level scrutiny
The government moves to cut tax-exemption facilities to help raise the country’s ‘poor’ tax-GDP ratio, officials said. Currently, the ratio of tax to GDP (gross domestic product) is only 10.0% — rated one of the poorest in the region. As per the initiative, the tax authority is going to review the taxation policies following a recent instruction from Finance Minister AMA Muhith. The finance minister directed the National Board of Revenue (NBR) to prepare a working paper with some key issues that would be placed in a top-level government meeting. Prime Minister Sheikh Hasina is expected to preside. The minister’s directive came following a tax-holiday plea of the Public Private Partnership (PPP) Authority under the Prime Minister’s Office (PMO). The meeting is likely to be held this month (March) with ministers and secretaries concerned attending. Mr Muhith instructed the NBR to include five points in the working paper, purportedly to substantiate the move to squeeze the tax-waiver facility.
Four services to PPP projects get VAT waiver
National Board of Revenue has waived value added tax on four types of services being used by the projects taken under public private partnership initiative. Signed by NBR Chairman Nojibur Rahman, the VAT wing recently published a special order, offering the facility to construction firms, consultancy and supervisory firms, suppliers of construction materials (except petroleum products) and legal consultants. The decision was taken in line with proposals made by Public Private Partnership Authority (PPPA), officials said. The authority is run under the Prime Minister’s Office. Officials said the VAT waiver on the services would facilitate development of the public sector infrastructure and services vital for the country. The government has taken up PPP projects to reduce government expenditure and ensure cent% public services to the people through PPP projects. However, the NBR has tagged few conditions for suppliers to get the VAT exemption. The investors will have to get certification from a nominated official of PPPA for receiving the tax benefit, according to the order. The certificate should have clear mentioning of the investing firm’s name, address, VAT registration number, name of approved PPP project, work and duration of the project and if the services involved with the project are under the PPP or not. A copy of the certification has to be sent to the NBR directly from PPPA to help suppliers get the benefit.
Prime Minister declares jute ‘agro-based’
Prime Minister Sheikh Hasina declared on Sunday that jute and its products would be considered as agro-based ones so that this foreign exchange-earning sector could get all the facilities like the country’s other agro-based ones, reports UNB. The Prime Minister was speaking at a program organized by Textiles and Jute Ministry at Bangabandhu International Conference Centre (BICC) in the city to award individuals and organizations who played a pivotal role in implementing the Mandatory Jute Packaging Act 2010. Textiles and Jute Minister Emaj Uddin Pramanik presided over the program. Commerce Minister Tofail Ahmed, State Minister for Textiles and Jute Mirza Azam and Parliamentary Standing Committee on Jute Minister Saber Hossain Chowdhury also spoke on the occasion. Sheikh Hasina made the declaration after repeated requests from previous speakers of the function to declare jute as the agro-based product. Currently, the agro-based products are getting 20% cash incentives on their exports.
DSE launches mobile trading app March 09
The Dhaka Stock Exchange (DSE) will launch the DSE-Mobile on March 09 to facilitate share trading through the mobile application, officials said. The premier bourse authority announced the date of launching the mobile app at a press briefing at DSE on Sunday. Finance Minister A M A Muhith is expected to launch the DSE-Mobile at Bangabandhu International Conference Centre. The investors will be able to avail the service without any charge for a few months initially. The DSE-Mobile has two versions. The first one is called DSE-Mobile VIP, which is a non-trading version. The second one – DSE-Mobile Trader – is a trading version of the mobile app. The premier bourse authority has provided relevant trainings to brokerage firms through whom the investors would get the mobile trading service.
Apollo Hospitals to go public
Apollo Hospitals Dhaka, one of the fastest growing and leading hospitals of the country will go public through Initial Public Offering (IPO) under Book- Building method for expanding their business. ICB Capital Management Limited (ICML) and AFC Capital Limited have been appointed as Managers to the Issue and Langkabangla Investment Limited has also been appointed as Registrar to the issue. In this connection, the issuer has signed two separate agreements with the issue managers and the registrar to the issue recently. The signing ceremony was graced by Mr. Md. Iftikhar-uz-zaman, MD of ICB. High officials of respective Organizations including Mr. Khandaker Monirul Islam, Managing Director of Apollo Hospital Limited, Mr. Md. Nasir Uddin Chowdhury, MD, Langkabangla Finance Limited, Ms. Nasrin Sultana, CEO of ICML, Mr. Mahbub H. Mazumder, CEO of AFC Capital Limited were present at the signing ceremony, said a statement.
United Airways suspends flights once again
United Airways has once again suspended flight operations due to unavailability of aircraft, just ten days after resumption of domestic flights. After remaining suspended for three weeks, domestic flight operations recommenced on February 24 with daily flights on the Dhaka-Cox’s Bazar route. The latest suspension again created uncertainty for those who have bought tickets with the airline for domestic travelling. Earlier on February 4, the private carrier announced that its flights on both domestic and international routes have been suspended due to unavailability of serviceable aircraft. Foyez Ahmed, manager of public relations of the airline, confirmed the latest flight suspension. But he did not give any details as he was on leave. Sources, however, said the aircraft were grounded for maintenance, but the airline does not have enough funds to do the required servicing, which is a matter of high cost. The net operating cash flow of the airline also shows its financial weakness. It was only BDT 0.26 during the July-December period of last year, down from BDT 0.40 a year earlier, according to data on the DSE website.
SIM tax exemption: NBR asks for BTRC guidelines on biometric re-registration
The National Board of Revenue has sought new guidelines from the Bangladesh Telecommunication Regulatory Commission on ongoing biometric re-registration for SIM cards in a bid to facilitate exemption of SIM tax supposed to be derived in the process, officials said. They said that the government had already decided not to receive any tax on SIMs during the biometric re-registration process but the existing laws and regulations of the revenue board and the BTRC on SIM replacement does not support the decision. A senior NBR official said that according to the BTRC guideline issued in August 2012, any change of subscribers’ information including name, address, photo, SIM number and other basic information will be considered as the change of ownership of SIM cards. In that case, it will be considered as a new connection of SIM cards which is subject to SIM tax at the rate of BDT 100, he said. Value-added tax rules also say that any change in ownership of existing SIM cards will be counted as sale of new connection, he added. In this context, the revenue board requested the BTRC to frame a guideline for the biometric re-registration so that the revenue board can offer exemption to the mobile phone operators from paying tax on SIM cards for the period of re-registration.
World Stock and Commodities
|Index Name||Close Value||Value Change||Percentage Change|
|Crude Oil (WTI)*||$36.54||+0.62||+1.73%|
|Crude Oil (Brent)*||$39.41||+0.69||+1.78%|
|Dow Jones Industrial Average||17,006.77||+62.87||+0.37%|
|USD 1||BDT 78.43*|
|GBP 1||BDT 111.42*|
|EUR 1||BDT 86.17*|
|INR 1||BDT 1.17*|
*Currencies and Commodities are taken from Bloomberg.