TT-Clean: 77.1 | TK BC-Selling: 78.1
TK OD-Sight: 76.88 TK | TC-Selling: 78.1 TK
TT-Clean: 77.1 | TK BC-Selling: 78.1
TK OD-Sight: 76.88 TK | TC-Selling: 78.1 TK
TT-Clean: 77.1 | TK BC-Selling: 78.1
TK OD-Sight: 76.88 TK | TC-Selling: 78.1 TK
Rate last updated: 02/01/2014 11:15:04 AM
Private investment continues to remain obstinately stuck in the slow lane, putting a damper on the country’s growth aspirations. In fiscal 2016-17, private investment to gross domestic product ratio is expected to be 23.01% — only 0.02% points higher than the previous year, according to provisional data from the Bangladesh Bureau of Statistics. The ratio has been stagnant for the past several fiscal years save for the last, when it edged up about 1% point to 22.99%. The ennui on the investment front is even more puzzling given the amount of excess liquidity that the banking system is sitting on and the lending rates. As of November last year, BDT 2,779. 6 billion is lying idle among banks, according to Bangladesh Bank. The banks’ lending rate decreased significantly in the past couple of years: the weighted average lending rate stood at 9.7% in March, down from 11.9% two years earlier.
Source: http://www.thedailystar.net/business/private-investment-flatters-deceive-1408462
Country’s credit-rating firms are allegedly giving higher ratings to SMEs mainly in a rat race for their own survival as the number of raters has far outstripped the requirement. Commercial banks that rely on such ratings for the clients’ creditworthiness were inevitably lulled into a comfort zone in lending to the small and medium enterprises (SMEs). People both in the rating companies and the banks admitted that such practice is on and that it would impact on the banking sector. Many believe it is a “serious concern for the banking industry”. Credit rating for the SMEs began just a couple of years back in the country under the guidelines of the central bank. The country’s eight rating firms, believed to be quasi-regulatory bodies, are authorised to do the rating of the units in the booming SME sector. A website-based analysis conducted by this scribe shows that a number of rating companies gave SME-3 rating, equivalent to “A”, to around 60%SME clients.
Source: http://print.thefinancialexpress-bd.com/2017/05/20/172958
Bangladesh Bank’s decision to cap the interest rate on credit card came as a shock for the banking industry, especially those with a good exposure to this segment. Earlier on May 11, the central bank issued a guideline on credit card operations and for the first time, set a limit on the interest rate on credit cards. Banks can charge the highest interest rate of consumer loans plus 5%, meaning that the interest rate on credit cards would come down to 16-17% — half the existing rate. Currently, banks charge as high as 36% interest on credit card, while interest rates on consumer credit stand at 11-12%. Bankers termed the BB move unrealistic and also detrimental to the country’s digital vision that encourages cashless transactions. Amid this situation, bankers called an emergency meeting last week to discuss the issue and decided to write to the BB through the Association of Bankers Bangladesh to reconsider the decision, according to Selim RF Hussain, managing director of Brac Bank.
Source: http://www.thedailystar.net/business/banks-irked-interest-rate-cap-credit-cards-1408468
The amount of defaulted loans in nine newly established banks increased by 86.2%to BDT 5.1 billion in the first three months (January-March) of this year. Bangladesh Bank officials said the upsurge in the non-performing loans in the banks was the fallout of a number of loan-related scams and corruptions in some of the banks. The nine new banks are: Meghna Bank, Midland Bank, Modhumoti Bank, NRB Bank, NRB Commercial Bank, NRB Global Bank, South Bangla Agriculture and Commerce Bank, The Farmers Bank and Union Bank. The BB provided licences to the nine banks in 2012 considering the political background of the owners of the banks despite severe criticisms from different corners, an official of the central bank told New Age on Thursday last. Most of the directors and chairmen of the nine new banks are directly involved with either the politics of the ruling Awami League or those of its allies. The BB inspection teams have already unearthed various types of corruptions in disbursing loans in some of the new banks. The BB data showed as of March 31, 2017, the amount of classified loans in Meghna Bank increased to BDT 455.3 million from BDT 207.7 million as of December 31, 2016, that in Midland Bank to BDT 153.6 million from BDT 143.5 million and that in Modhumoti Bank to BDT 104.5 million from BDT 45.1 million.
Source: http://www.newagebd.net/article/15918/defaulted-loans-in-new-9-banks-surge-by-86pc
The foreign exchange reserve which has been expanding fast for the past few years is projected to drop sharply from its expected level, according to government estimate. The government projection came up following a sustained slow growth in remittance inflow and export receipts. The forex reserve may stand at USD 33.5 billion by June 30, down by USD 1.8 billion from its earlier projection. The ministry of finance in its latest meeting with the central bank and the National Board of Revenue revised it downward. This signifies that the government’s move for investing it in newer areas should be reviewed under such a situation. This also signifies that the authorities should take steps to improve its external sector immediately. Economists and senior people at the Finance Division told the FE that if the situation in terms of export earnings and remittance inflow does not improve, this will impact the overall balance of payment.
Source: http://print.thefinancialexpress-bd.com/2017/05/19/172867
N Rajashekaran has recently been appointed as the new country officer of Citi for Bangladesh. Rajashekaran succeeds Rashed Maqsood who has served the bank for 22 years, the New York-based bank said in a statement yesterday. Rajashekaran is a 32-year banking veteran and has previously worked as country business manager for Citi’s global consumer banking business in China, Thailand and India and as the chief risk officer for Citibank Korea. “I would like to thank Rashed for his contribution to building a client-centric business that is reflective of our global business strategy in Bangladesh during his over six-year tenure as the Citi country officer,” said James Morrow, sub-cluster head for Bangladesh and Sri Lanka. “N Rajashekaran brings extensive experience across our client segments to this important role, and post all regulatory approvals, look forward to partnering with him to grow our franchise in Bangladesh.” “The franchise is well-positioned to serve the needs of leading corporate and financial customers and public sector clients under his leadership,” Morrow said. Citi has established a strong presence in Bangladesh since the opening of its first branch in 1987. It now has three branches, two service outlets and more than 150 employees, providing services to institutional clients.
Source: http://www.thedailystar.net/business/citi-gets-new-country-officer-1407403
The capital market refinancing scheme is expected to get an extension of its tenure with a cut in the lending rate. A relevant department of the ministry of finance (MoF) was scrutinising a proposal in this regard earlier submitted by Bangladesh Securities and Exchange Commission (BSEC), a senior official of the MoF told the FE Saturday. The BSEC had proposed reducing the annual rate of interest to 6.0% from existing 9.0% under the scheme. The affected people who invested up to BDT 1.0 million during the period between January 2009 and November 2011 were eligible for the loan. If the rate is set at 6.0%, 4.0% will go to the refinance fund and Investment Corporation of Bangladesh (ICB) while merchant bankers and brokerage firms will charge 1.0%each as management fees.
Source: http://print.thefinancialexpress-bd.com/2017/05/21/173004
Net foreign investment in the capital market more than doubled year-on-year in the third quarter (January-March) of this fiscal year (FY17), according to a latest review released Thursday. “Many overseas investors considered the Bangladesh stock market as a frontier and emerging market and invested more funds there,” said the review on the economic situation in Bangladesh prepared by Metropolitan Chamber of Commerce & Industry (MCCI). It said net foreign investment in the stock market rose to above BDT 7.54 billion in Q3 of FY17 from above BDT.2.14 billion in the corresponding period of FY16.
Source: http://print.thefinancialexpress-bd.com/2017/05/19/172824
Global rating agency Standard & Poor’s (S&P) affirmed its ‘BB-‘ long-term and ‘B’ short-term sovereign credit ratings on Bangladesh with a stable outlook for the consecutive eighth year, notwithstanding some drawbacks. The stable outlook balances the country’s healthy growth prospects and an improving external profile against fiscal weaknesses and development needs, according to the S&P research update, released on May 19. “Although we assess Bangladesh’s external debt as low, the country faces the vulnerabilities of a low-income economy, fiscal constraints, and heavy development needs,” it noted. The rating agency also see moderate risk of contingent liabilities from financial institutions, in particular the state-owned commercial banks (SoCBs) sector.
Source: http://print.thefinancialexpress-bd.com/2017/05/20/172960
The tax administration prefers a single and uniform value added tax rate to bring discipline in the system and avoid complexity, said a member of the National Board of Revenue. The new VAT law, scheduled to be effective from July 1, has incorporated a single VAT rate of 15 percent. “We would prefer a single rate, not multiple rates of VAT,” said Jahangir Hossain, VAT policy member of the NBR. He said multiple rates would be complex to keep accounting under digitised system. It would be difficult to reap the actual benefit of the new VAT law.
Source:
http://www.thedailystar.net/business/nbr-still-prefers-uniform-vat-rate-1408465
http://www.newagebd.net/article/15976/nbr-firm-on-single-vat-rate
Some 23 ongoing projects, funded by the Asian Development Bank (ADB), are facing various hurdles that have led to long delays in their implementation, officials said. The issues include delay in procurement, failure to disburse and spend money in several years after their approval, lack of environmental monitoring reports, implementation delays due to delay in handing over of sites to contractors and in consultant selection. The ADB and the Economic Relations Division (ERD) have jointly identified the 23 projects that will come under scanner during the tripartite portfolio review meeting in Dhaka scheduled for next week. Of the projects, seven are of energy sector, three on urban development, four on transport sector, five on public and finance, three on agriculture and natural resources, and one on education.
Source: http://print.thefinancialexpress-bd.com/2017/05/20/172954
The government will implement a project to develop infrastructure for setting up the Chinese Economic and Industrial Zone (CEIZ) in Anwara, reports UNB. The Economic Relations Division (ERD) sent a Letter of Intent to the Economic and Commercial Counsellor of the Chinese Embassy in Dhaka Li Guangjun on May 9 for implementing the “Infrastructure Development of Chinese Economic and Industrial Zone (CEIZ)” project on government-to-government funding, said an ERD official preferring anonymity. The official told the news agency that Bangladesh Economic Zones Authority (BEZA) under the Prime Minister’s Office will implement the proposed project at an estimated cost of USD 280.71 million with Chinese government’s concessional loan. The Planning Commission has already approved the Preliminary Development Project Proposal (PDPP) of the project to be completed by June 2020.
Source: http://print.thefinancialexpress-bd.com/2017/05/20/172937
IFAD Autos Limited, a leading assembler and seller of vehicles, has recently signed an agreement with Gulf Oil Bangladesh Limited (GOBL) on buying 49% of its equity stakes at a cost of USD 1.7 million. The company made the announcement by a price sensitive information (PSI) statement on Thursday after the end of trading hours. GOBL, the subsidiary company of Gulf Oil International Limited (UK), is engaged in importing and selling lubricants, greases and car care products in Bangladesh. Purchase of the new company will diversify the revenue stream of IFAD Autos, which currently deals with only assembling and selling of vehicles and spare parts, said an equity research analyst. IFAD Autos will finance the investment with its own fund and the management expects the investment to contribute a profit of approximately BDT 43.6 million next year, said the statement. According to the Dhaka Stock Exchange website, IFAD Autos currently has 155.0 million shares outstanding, suggesting the expected profit next year from the investment in GOBL will be BDT 0.28 per share. On April 30, IFAD Autos reported earnings per share of BDT 2.01 during the first nine months (ending in March 2017) of its operation in Fiscal Year 2017. Stock price of IFAD Autos closed at BDT 137.4 on Thursday after registering a gain of 6.5% over the last week. The stock was the mostly traded in Dhaka Stock Exchange last week contributing 3.0% to the total turnover.
Source: http://www.dhakatribune.com/business/2017/05/21/ifad-autos-buy-equity-stake-gulf-oil-bangladesh/
The Star Infrastructure Development Consortium Limited (Star Consortium) of Bangladesh has teamed up with a Chinese company to set up a steel plant with annual production capacity of 2.0 million tonnes in the country. Bangladesh Steel Rerolling Mills Limited (BSRM) will take a lead role on behalf of the Star Consortium to implement the project, said a press release Thursday. If implemented, it would be the largest steel manufacturing plant in Bangladesh. A delegation of China’s Kunming Iron and Steel Holding Company Limited (KISC), led by its chairman Zhao Yongping, sought necessary support to this effect during a meeting with executive chairman of Bangladesh Investment Development Authority (BIDA) Kazi M Aminul Islam at the BIDA headquarters in the capital.
Source: http://print.thefinancialexpress-bd.com/2017/05/19/172839
Supermarket chains are stepping into the e-commerce bandwagon, to meet the growing demand for convenience in shopping for perishables and other consumer goods. On April 18 leading supermarket chain Meena Bazar launched its online platform, meenaclick.com, while Shwapno and Agora are gearing up to roll out their e-stores. All the products that are available in the brick-and-mortar stores will be available on the e-store as well. However, the brands’ grocery delivery will be limited to Dhaka and Chittagong for now. Meena Bazar has been working on meenaclick.com for a few years now to provide the best shopping experience for customers, said Maruf Nafiz, the in-charge of the online platform. Shwapno is all set to roll out its e-commerce platform in the next three to four months, said Ayaz Aziz, who is responsible for designing the channel. Agora, the country’s first supermarket chain, is yet to join the e-commerce bandwagon.
Source: http://www.thedailystar.net/business/supermarket-chains-move-e-commerce-1407421
A global association of mobile operators has called for lower 4G licensing fees ahead of the next round of auctions, due to be held in a couple of months’ time, to reflect the local market realities and facilitate the Digital Bangladesh goals. The country’s mobile operators are already burdened with some of the highest taxes in the world and the high fees would make it more challenging for them to roll out the new technology, said the Global System for Mobile Association in a press statement recently. In that case, the government move would be counterproductive: the high prices would impose a significant burden in meeting the ‘Digital Bangladesh’ objectives and impact the future of mobile broadband services in the country. The Bangladesh Telecommunication Regulatory Commission has sent its proposal to the government on the 4G spectrum prices last month. For each megahertz, it recommended $35 million on the 1,800 band, $30 million on the 900 band and $27 million on the 2,100 band. The BTRC also plans to slap on an additional $7-$8 million for per MHz of technology neutrality on the existing spectrum on the 1,800 and 900 bands.
Source: http://www.thedailystar.net/business/gsma-calls-lower-4g-spectrum-prices-bangladesh-1408456
Regent Airways, the country’s one of the top private carriers, has begun flights from Dhaka to Doha, the capital of Qatar. The inaugural flight, a 167-seat Boeing 737-800, departed Hazrat Shahjalal International Airport around 10:45pm on Friday and reached Hamad International Airport in Doha around 1:45am local time the next day. The flight, which has eight business class and 159 economy class seats, was greeted with water cannon salutes at the airport, said the private carrier in a statement.
Ashud Ahmed, Bangladesh’s ambassador to Qatar, received the passengers. Initially, Regent Airways would operate flights on the new route four days a week. Regent Airways Chairman Yasin Ali inaugurated the new route at the VIP lounge of the Hazrat Shahjalal International Airport.
Source: http://www.thedailystar.net/business/regent-starts-doha-flights-1408453
Foreign companies should invest in Bangladesh as the opportunities the country offers far outweigh the challenges, said a top banker. “There are business opportunities in Bangladesh. There are also challenges. But the opportunities probably outweigh the challenges in this market,” said Abrar A Anwar, chief executive officer of Standard Chartered Bangladesh. Standard Chartered has about $6 billion in onshore and offshore assets in Bangladesh, including a capital of $500 million in the market.
Source: http://www.thedailystar.net/business/business-opportunities-rising-bangladesh-1408303
| Index Name | Close Value | Value Change | Percentage Change |
|---|---|---|---|
| DSEX | 5,399.66 | ↓30.01 | ↓0.55% |
| DJIA | 20,804.84 | ↑141.82 | ↑0.69% |
| FTSE100 | 7,470.71 | ↑34.29 | ↑0.46% |
| Nikkei 225 | 19,590.76 | ↑36.9 | ↑0.19% |
| Commodity | Close Value | Value Change | Percentage Change |
|---|---|---|---|
| Crude Oil (WTI)* | $50.33 | ↑0.98 | ↑1.99% |
| Crude Oil (Brent)* | $53.61 | ↑1.1 | ↑2.09% |
| Gold Spot* | $1,255.93 | ↑8.86 | ↑0.71% |
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