Farmers Bank continues to worry BB
Bangladesh Bank has asked Farmers Bank to explain why it continues to disburse fresh loans despite having a bar on lending since January. Earlier in January, the central bank slapped some restrictions on fresh loan disbursement and opening of new branches, with a view to protecting depositors’ money given the precarious financial health of the newly established bank. But the bank has frequently breached the central bank’s restrictions and disbursed fresh loans, said a senior BB official. So much that the bank’s credit-deposit ratio stood at 88.70 percent in June — higher than the limit of 85 percent set by the central bank. Subsequently on Thursday, the central bank issued a show-cause letter to the bank’s Managing Director AKM Shameem about the fresh loan disbursement and asked him to respond within seven days. AKM Shameem, managing director of Farmers Bank, acknowledged the receipt of the letter from the BB. He said the central bank wanted to know why the bank suffers from liquidity crisis. “The BB also sought to know why we are disbursing fresh loans despite facing liquidity crisis,” Shameem added. Established in the second half of 2013, the bank’s financial health started deteriorating not long after, and in January last year the central bank appointed an observer in Farmers’ board with the view to bringing in loan discipline and improving risk management and internal control.
Raw materials shortage hits home textile, terry towel industry
The country’s terry towel, home textile and rotor spinning mills have been facing an acute shortage of raw materials — cotton and garment waste — which, industry insiders apprehend, will deepen if the government withdraws or reduces the existing minimum export rate. They also fear many specialized and home textile factories may shut down if the government takes such steps, saying that it would further prolong the shortage of raw materials in the local market. They alleged that cotton waste and garment ‘jhut’ (cutting waste), the main raw materials for the specialised textile mills, home textile and rotor mills, were being smuggled out and exported with false declarations to India through Benapole, Dawki, Akhaura and Tamabil land ports, creating an acute shortage of by-products in the local market. Export of garment waste increased by 140.0% in the first three months of the current fiscal year, according to state-run Export Promotion Bureau (EPB). Such high growth of garment waste indicated that cotton waste was exported in the name of garment jhut, industry people alleged.
NBR to waive duty on electronic cash registers
The National Board of Revenue is set to waive the import duty and taxes on electronic cash registers (ECRs) in a bid to encourage retailers to buy the sales data recording devices and ensure compliance in value-added tax collection. However, the zero-duty import benefit will be applicable for those importers who will bring in fiscal cash registers as per the specifications of the NBR, said Syed Mushfequr Rahman, deputy project director of the NBR’s VAT Online Project. At present, the total tax incidence for the import of the device is 20.07% and for the fiscal printer 26.27%, according to data from the NBR. Firms that have the technical and financial capabilities will be enlisted for zero-duty import of the devices. Besides, the importers must have the capacity to provide spare parts and other services within the specific time and have adequate stock. Importers will have to sell the devices to retailers by adding 30-40% to their purchase prices. Profit and the after-sales service charges should be included in the prices of cash registers. To capture the transaction data from cash registers, the NBR will be establishing the Electronic Fiscal Device Management System, Rahman said. The system will allow the NBR to get real-time data of sales at shops.
Western Marine to spend Tk 500cr on expansion
Western Marine Shipyard, the leading shipbuilder of Bangladesh, has decided to invest Tk 500 crore in expansion. The board of directors of the company approved the shipbuilder’s expansion plan to build special types of vessels, according to a disclosure posted on the Dhaka Stock Exchange website yesterday. Md Sakhawat Hossain, managing director of the shipbuilder, told The Daily Star that the company would issue rights shares to raise a portion of the funds to be invested. The remaining funds will come from the company’s own sources and new loans from banks and financial institutions, he said. “We prefer the stockmarket to raise funds as the shipbuilding industry requires long-term investment,” he said. This will allow the company to generate an additional revenue of Tk 150 crore per annum, enabling it to make 11 percent additional profit, according to the disclosure. Western Marine is now making 38 ships for four countries, according to the company. It exported 14 vessels to three countries in the last one year. Bangladesh’s shipbuilders exported 43 vessels in the last eight years, of which 33 were from Western Marine. Western Marine owes about Tk 700 crore to various banks, according to its company profile.
Ship collisions at Ctg port raise concerns
Ships have frequently been colliding with each other and running aground at Chittagong port’s outer anchorage and approaches for the last couple of months, raising concerns among ship owners, charterers, shipping agents and other stakeholders. Over 30 such incidents occurred from July to October, according to local representative firms of international protection and indemnity (P&I) clubs, which provide liability coverage for oceangoing vessels. One collision on September 9 with Malta flagged vessel MV Orhan led to a crack on Belize flagged vessel My Meray, where water damaged around 7,400 tonnes of TSP fertiliser, as per a local agent of the latter. Two P&I clubs—The American Club and Gard—have recently issued warnings asking members to take extra precaution and care. The American Club’s alert on September 20 was titled “Perils at Anchorage of Chittagong, Bangladesh”. It said collision risks had increased owing to strong spring/flood/monsoon tides and silted shallows. Most collisions resulted from manoeuvring vessels failing to take account of the variability and strength of the tide and currents, leading to contact between anchored and embarking vessels, it stated. Port users mainly blame an unprecedented congestion at the outer anchorage, where a huge number of bulk carriers wait for days to discharge cargoes due to a scarcity of lighter vessels. A seminar was organised by the Nautical Institute’s Chittagong branch at a Chittagong restaurant on Saturday to underscore the need for raising awareness and take remedial steps to avoid accidents. Maritime professionals of the international representative body expressed deep concern over the increasing number of accidents since it could create a negative image of the port.
Six million people working in country’s poultry industry
The poultry sector of Bangladesh has employed around six million people, of whom 40 per cent are women. These people are employed either directly or indirectly. The investment in the industry is above Taka 300 billion, while it contributed about two per cent in the GDP (Gross Domestic Product), Bangladesh Poultry Industries Central Council (BPICC) President Mashiur Rahman told BSS. He said about Taka 550 billion to 600 billion more will be needed to invest in the sector by 2021. There are about 65,000 to 70,000 poultry farms across the country, Mashiur added. He said around 8.21 billion eggs were produced from the poultry farms in 2016, while the number was 7.12 billion in 2015 and 6.39 billion in 2014. The demand of eggs will increase to about 14.8 billion by 2021, he said. The BPICC president said the poultry industry is developing gradually, reducing import dependency. A silent revolution has taken place in this sector as the investment is now around Taka 300 billion while it was Taka 15 billion only in the 80s. According to the BPICC sources, the production of chicken was 675,000 tonnes in 2016 while it was 574,000 tonnes in 2016 and 551,000 tonnes in 2014. Mashiur said, “We are now self-reliant in producing eggs and broiler chickens. We have seven grandparent stock farms and around 80 small parent stock farms across the country.” Besides, he said, there are around 186 feed mills in the country. Of them, 70 feed mills are modern and registered.
Local and Global Stock Indices
|Index Name||Close Value||Value Change||Percentage Change|
|DSEX||6,223.78||↑ 30.22||↑ 0.49%|
|DJIA||23,422.21||↓ 39.73||↓ 0.71%|
|FTSE100||7432.99||↓ 51.11||↓ 0.68%|
|Nikkei 225||22527.21||↓ 154.21||↓ 0.68%|
|Commodity||Close Value||Value Change||Percentage Change|
|Crude Oil (WTI)*||$56.83||↑ 0.09||↑ 0.16%|
|Crude Oil (Brent)*||$63.59||↑ 0.07||↑ 0.11%|
|Gold Spot*||$1,276.18||↑ 1.11||↑ 0.09%|
Major Currencies Exchange Rates Movement in Last Seven Days
|USD 1||BDT 83.02|
|GBP 1||BDT 108.94|
|EUR 1||BDT 96.84|
|INR 1||BDT 1.27|
*CURRENCIES AND COMMODITIES ARE TAKEN FROM BLOOMBERG.