Loan deal with China’s Exim Bank likely by Dec

A year-long uncertainty over getting Chinese loan for the Padma Rail Link project is likely to go soon as Exim Bank has confirmed signing of a loan agreement under government-to-government arrangement by December. Official sources said the Exim Bank board of directors approved the loan for the Tk 349.88-billion project at the end of October. The bank authority is now looking to China’s Ministry of Commerce for approval. The Bangladesh Railway (BR) is expected to get the draft of the loan agreement by this month (November), they added. Rail Secretary Mohammad Mofazzel Hossain said Chinese Foreign Minister Wang Yi, during his recent visit to Bangladesh, had also assured them of signing the loan deal by December. Soon after the draft of the loan agreement is finalised, the date for the loan signing ceremony will be announced, he told the FE. Financing the Padma rail link project, part of a dream project on communications infrastructure, had become uncertain as the designated Chinese bank remained silent about signing of the loan agreement for long.

Source: http://today.thefinancialexpress.com.bd/last-page/loan-deal-with-chinas-exim-bank-likely-by-dec-1511628065

India doubles export incentive for apparel

Hit by a sharp decline in textile exports in the current fiscal year, India’s commerce and industry ministry has announced doubling an incentive under the Merchandise Export from India Scheme (MEIS) for garment exporters with immediate effect. Now exporters of garments will get back 4 percent of their exports’ value, an increase of 2 percentage points, in the form of duty exemption scrips, which can be used to pay duties on inputs, including customs. A ministry statement on Friday said the enhancement was to support declining textile exports. “The estimated annual incentives will be Rs 1,143.15 crore for 2017-18 and Rs 685.89 crore for 2018-19,” it said. “This measure will incentivise the exports of labour-intensive sectors of readymade garments and made-ups and contribute to employment,” it added. The sharp decline was not only in export of textiles but also in that of leather, gems and jewellery, handicrafts, readymade garments and carpets, among others. India’s exports fell 1.12 percent in October this year to $23 billion with most of the traditional exporting sectors contributing to the fall. Garment exports from India fell 39.2 percent in October to $829.4 million following the rollout of the goods and services tax (GST) on July 1, which is touted as a major economic reform of Prime Minister Narendra Modi’s government. The GST subsumes a plethora of local taxes. The made-ups sector, which includes products such as towels and bedsheets, is the second-largest employer in the textile sector after apparel.

Source: http://www.thedailystar.net/business/india-doubles-export-incentive-apparel-1496485

First quarter sees BDT 42.64 billion budget surplus for spending slowdown

The current fiscal year’s first quarter saw a budget surplus worth BDT 42.64 billion mainly as the government couldn’t go by its spending plans, sources said. As of September last, government mobilized resources amounting to BDT 507.89 billion while spent BDT 465.25 billion, leaving BDT 42.64 billion unspent as per data available with the ministry of finance. Economists view the “tragedy” is that government had borrowed a large amount of money in the quarter under review although the budget remained in a surplus territory for spending slowdown. They said such ‘unnecessary’ money borrowed through national savings certificates (NSC) would continue to come in unless there is a reform on the financial front. Government’s total borrowings from sources other than banks came to BDT 134.98 billion. Of the amount, BDT 126.94 was borrowed through National Savings Department (NSD) instruments during July-September FY18. The target of receipts from the NSD is BDT 300 billion for the current financial year (FY), 2017-18. However, people at the Ministry of Finance (MoF) told the FE that the government had much less expenditure than expected in the quarter — subsidies and transfers, development expenditure and current expenditure. They said the government spent BDT 106 billion in the quarter under review on account of subsidies against an optimum figure which should have been around BDT 200 billion. The whole-year subsidy target is worth nearly BDT 838 billion.

Source: https://thefinancialexpress.com.bd/economy/bangladesh/q1-sees-BDT-4264b-budget-surplus-for-spending-slowdown-1511582091

Subsidy shrinkage soothes government’s Fiscal Year 2017 budget-deficit burden

Government subsidies shrank in 2016-17 for subdued demand from some sectors to the relief of fiscal administrators from budget-deficit burden, but economists foresee a reversal this year. Officials concerned said the subsidy shrinkage last financial year helped the government lower the budget deficit to comfort zone of 5.0 %. However, leading economists who are conversant with fiscal affairs told the FE that subsidy payments, especially for food and export sectors, might rise in the current fiscal year (FY) 2017-18. Their predictions on subsidies for agriculture and power development for the current fiscal year, on the other hand, remain low as of FY 2017. In the meantime, the earmarked subsidy remained unutilized by nearly 49 % or BDT 90.75 billion in the last fiscal year to June 30 last — in what is seen as a very unusual fiscal event — against its original estimation of BDT 177.29 billion or around 1.2 % of the GDP. People familiar with the development at the Ministry of Finance attributed the sharp fall mainly to low demand for subsidies from some key areas, like Bangladesh Petroleum Corporation (BPC), Petrobangla and agriculture sector.

Source: http://today.thefinancialexpress.com.bd/first-page/subsidy-shrinkage-soothes-govts-fy17-budget-deficit-burden-1511627602

3G internet finally gets momentum

As of June, the total active 3G SIMs stood at 49.7 million, up 72.60 % year-on-year, according to the draft of the Bangladesh Telecommunication Regulatory Commission’s annual report. As of June this year, 72.35 % of the 68.7 million active SIMs with internet connection was enjoying the fastest data service, according to the report. As of June, the total active SIMs were 136.0 million. The industry as a whole invested BDT 320 billion for 3G but total revenue from this segment was only BDT 60 billion up to December.

Source: http://www.thedailystar.net/business/3g-internet-finally-gets-momentum-1496500

Two multinationals vie for contract on Liquefied Natural Gas (LNG) supply

Two global firms are vying for clinching contract to build a small floating storage and re-gasification unit (FSRU) and supply around 200-million-cubic-foot-per-day (mmcfd) re-gasified LNG to Bangladesh. Both the multinational firms–ExxonMobil and Vitol Asia–are currently in close contact with top officials of the state-run Petrobangla and Energy and Mineral Resources Division (EMRD) under the Ministry of Power, Energy and Mineral Resources (MPEMR) to get the works. They were among a dozen international firms that had submitted expression of interests (EOIs) to build a small-scale LNG terminal on a build-own-operate (BOO) basis and supply LNG from Sangu platform. Australia’s oil and gas major Santos had operated the offshore Sangu gas field to supply natural gas through Sangu platform until the closure of its operations in October 2013. Separately, Petrobangla has picked up Trafigua and Exmar to build two small FSRUs, import LNG and supply around 400 mmcfd re-gasified LNG to two separate jetties adjacent to the state-owned Chittagong Urea Fertilizer Company Ltd (CUFL) and multinational joint-venture Karnaphuli Fertilizer Company Ltd (Kafco) on the River Karnaphuli near the Bay of Bengal, he said. All the three small FSRUs are in addition to the currently under- construction two bigger-capacity FSRUs, said the official, requesting anonymity. The selected firms will be responsible to build the FSRUs, import LNG, re-gasify it and supply the re-gasified LNG into a gas-transmission pipeline owned by the state-run Gas Transmission Company Ltd (GTCL) at their own costs Petrobangla will only purchase re-gasified LNG from the contractors.

Source: http://today.thefinancialexpress.com.bd/last-page/two-multinationals-vie-for-contract-on-lng-supply-terminal-bldg-1511628212

Bankrupt owner laments ignoring compliance

Once Delwar Hossain was a very busy businessperson having to travel frequently, getting breakfast in Paris and dinner in London, with his Western buyers. Now he goes to and fro over Dhaka’s streets trying to manage money to pay back his Tk 150 crore bank loan. But he does not pass the busy times of the past as the owner of Tazreen Fashions which burned down in a devastating fire on November 24, 2012 is out of business. The fire changed the life of this successful businessman.

Source: http://www.thedailystar.net/business/bankrupt-owner-laments-ignoring-compliance-1495651

Gold prices to go up from Sunday

The Bangladesh Jewellers Samity has hiked gold prices, to be effective from Sunday, as the winter season approaches. During the winter season, the wedding season in the country, demand for gold normally remains high. According to a BJS statement on Saturday, the finest quality 22-carat gold will be sold at Tk 4,220 per gram, which is about 3 per cent higher. The price of silver has also gone up. 21-karat silver will cost Tk 90 per gram. BJS General Secretary Dilip Kumar Agarwala said international global prices and rising local demand were behind the latest revision. “The demand has climbed as November and December are the wedding season in Bangladesh,” he said. According to bdnews24.com, prices were last revised on September 26 this year, when it was cut for a second time in two weeks.

Source: https://thefinancialexpress.com.bd/economy/gold-prices-to-go-up-from-sunday-1511620472

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