Lending rates move closer to single-digit

Banking lending rates have come down closer to single-digit rate following declining deposit rates in August, according to Bangladesh Bank. Average lending rates of all banks stood at 10.24% in August 2016 against 11.51% one year ago while weighted average deposit rates of all banks came down to 5.44% in August 2016 from 6.74% a year ago. The central bank posted the figures on its website yesterday. A turnaround of declining rates does not seem likely because the banks are witnessing healthy deposit growth at existing rates to fulfill credit appetite of the economy, said an analyst. According to a senior banker, banks are slashing lending rates due to pressure from business people. He thinks the rate should be reduced to single digit. Private sector credit grew by 16.21% in August 2016 against same month last year and bank deposits grew 13.15% in July 2016 against same month one year ago.

Source: http://www.dhakatribune.com/business/2016/10/03/lending-rates-move-closer-single-digit/

Investment in savings tools hits record Tk 4,297cr in Aug

The monthly net investment in the national savings certificates and bonds hit its all-time high at Tk 4,297.20 crore in August thanks to low bank rates for deposit products.The net investment increased by 62.10 per cent in August compared with that of Tk 2,650.91 crore in the same month a year ago, according to the latest data of Directorate of National Savings. The previous highest was at Tk 3,605.06 crore in May this year. The government borrowing from the NSCs would cross the annual target within the first half of FY 2016-17 if the existing investment trend continues, he said. In the budget for FY17, the government set an annual borrowing target of Tk 19,610 crore from the NSCs. The DNS data showed that before August, the monthly highest net investment in the NSCs was Tk 3,605.06 crore in May this year.The data showed that the net investment in the savings instruments also increased to Tk 7,795.57 crore in the July-August period of FY17 compared with that of Tk 4,627.19 crore in the same period of FY16. Banks are still continuing to cut the rates of interest on their deposit products as they have been facing excess liquidity in recent years due to lower credit demand from the industrial sector amid dull business.

Source: http://www.newagebd.net/article/180/investment-in-savings-tools-hits-record-tk-4297cr-in-aug

LankaBangla to raise Tk 150cr through commercial paper

LankaBangla Finance is set to raise Tk 150 crore through commercial papers to cut its high financing costs. A commercial paper is a short-term unsecured debt instrument issued by a company to meet interim financing needs. Usually, the debt is issued at a discount from the prevailing market interest rates. The amount will be raised in one or several tranches with validity of nine months. Eastern Bank will act as the lead arranger of the issue. “LankaBangla will be the first non-bank financial institution in Bangladesh to raise funds by issuing commercial paper,” said Quamrul Islam, its head of treasury and financial institutions. The fund is being raised to meet the NBFI’s short-term needs, he said. The majority of the amount will be used to build asset portfolio, with a small portion going towards paying back high-cost borrowing. Prior to issuing the commercial paper, LankaBangla will hold an extraordinary general meeting on October 24 to change some clauses of its memorandum and articles of association to increase the authorised share capital to Tk 1,000 crore from existing Tk 300 crore

Source: http://www.thedailystar.net/business/lankabangla-raise-tk-150cr-through-commercial-paper-1293118

Government plans buyback of its securities

The government plans to buy back its securities for a better cash management, limiting interest payments from annual budget, officials said. As part of the move on prudent financial management, a tripartite meeting among senior officials of both the ministry of finance and the Bangladesh Bank (BB) and treasury heads of all the primary dealer (PD) banks was held at the central bank headquarters in Dhaka on Sunday afternoon. The ministry of finance has made the latest move against the backdrop of a surplus in balance of government account that stands at around BDT 15.0 billion. At the meeting, the PD banks proposed that the government should conduct the buyback as and when required. The treasury head of PD banks also requested the authorities concerned to consider maturity of bonds and treasury bills (T-bills) maintaining the commitment to minimum timeline. The ministry officials disclosed at the meeting that the government could issue another type of bond named ‘callable bond’ in future to bring variety of bonds. They also said the government will introduce 14-day T-bills shortly to handle short-term cash management properly.

Source: http://print.thefinancialexpress-bd.com/2016/10/03/153174

Net foreign investment in DSE jumps 61pc in nine months

Net foreign investment in stocks marked a significant jump in the first nine months of 2016 compared to the same period a year ago as foreign fund managers considered the market lucrative for long-term investment. Analysts said the favourable macroeconomic indicators coupled with easing of political tension in recent months increased the foreign investors’ confidence to pour fresh fund into stocks. Net investment by foreign investors for January to September, 2016 stood at Tk 5.87 billion, which was Tk 818 million in 2015, jumping 617 per cent over the period, according to statistics available with the Dhaka Stock Exchange (DSE). The overseas investors bought shares worth Tk 34.92 billion, while they sold stocks of Tk 29.05 billion in nine months of 2016, the DSE data showed. In 2015 for January to September, the foreign investors bought shares worth Tk 27.75 billon, while they sold shares worth Tk 26.93 billion, taking the net position at Tk 818 million.

Source: http://www.thefinancialexpress-bd.com/2016/10/02/47969/Net-foreign-investment-in-DSE-jumps-617pc-in-nine-months