Important Business News Extracts – October 03, 2017
Sept remittance hits 84-month low
The inflow of remittance in September this year registered US$853.73 million, which was lowest in seven years. It was around $838 million in September 2010, according to the central bank figures. The remittance fell by $564.85 million or more than 39 per cent from the receipts of $1.42 billion in August this year. It was $1.06 billion in September last year. The sharp fall registered in September as the month followed a high remittance inflow season ahead of Eid-ul-Azha, officials said. Talking to the FE, an executive director of Bangladesh Bank (BB) said the flow of inward remittance usually fall after the Eid-ul-Azha. “It’s a normal phenomenon.” He expected the inflow of remittance would increase in the coming months. However, the flow of inward remittances increased by 4.38 per cent to $3.39 billion in the first quarter (Q1) of the current fiscal year (FY 2017-18) from $3.24 billion in the same period of FY2016-17. Currently, 29 exchange houses are operating across the globe, setting up 1,184 drawing arrangements abroad, to help boost the remittance inflow, according to the BB officials. They said the central bank has already taken measures to expedite the flow of inward remittances in the current fiscal year. As part of the move, the BB had asked the banks for taking measures to attract non-resident Bangladeshis (NRBs) through improving the quality of remittance services. The banks have also been instructed to open ‘help desk’ at each branch concerned for ensuring better remittance services.
MTB opens air lounge at Hazrat Shahjalal International Airport
Rashed Khan Menon, MP, Minister for Civil Aviation and Tourism inaugurated the MTB Air Lounge at Hazrat Shahjalal International Airport (HSIA), Dhaka recently at a ceremony held at the lounge premises. Air Vice Marshal M. Naim Hassan, BBP, OSP, afwc, psc, Chairman, Civil Aviation Authority of Bangladesh (CAAB), M. A. Rouf, JP, Chairman, MTB, Syed Manzur Elahi, Founding Chairman, MTB, Rashed A. Chowdhury, former chairman and director and Anis A. Khan, Managing Director & CEO of the bank seen. Mutual Trust Bank Ltd (MTB) inaugurated its Air Lounge at Hazrat Shahjalal International Airport (HSIA), Dhaka with a view to providing MTB customers with greater comfort and convenience when travelling in and out of the country, said a statement. Rashed Khan Menon, MP, Minister for Civil Aviation and Tourism inaugurated the Air Lounge recently at a ceremony held at the lounge premises.
BRAC Bank Limited has won “Best Bank for SMEs” Award
BRAC Bank Limited has won “Best Bank for SMEs” Award from Asiamoney Magazine. Chowdhury Akhtar Asif, Deputy Managing Director & CRO and Syed Abdul Momen, Head of SME Banking, formally received the award in Beijing recently.
Modhumoti Bank to raise $ 10.5m for offshore banking unit
Modhumoti Bank Limited (MMBL) recently entered into an agreement with Symbiotics S.A. (“Symbiotics”), a Geneva-based global investment company dedicated to inclusive and sustainable finance in emerging frontier markets, to raise upto USD 10.5 million through debt arrangement, said a statement. Under the terms with Symbiotics-managed funds, the USD funding will be made available in two tranches Symbiotics which has invested over USD 2.8 billion across more than 60 countries is mainly engaged in Asset Management, Investment Advisory, Investment Analysis, Capacity Building and Technical Assistance Research.
Prime Bank Ltd signed an agreement with Bandar Steel Industries Ltd
Prime Bank Ltd signed an agreement with Bandar Steel Industries Ltd in the city recently. Head of Sales & Collection of Consumer Banking Division of the bank Mamur Ahmed and Managing Director of Bandar Steel Industries Md Abul Kalam signed the payroll agreement on behalf of their respective organisations.
Investors should make investments based on financial literacy
Finance Minister AMA Muhith on Monday said necessary reforms have been made to avert situation like 1996 and 2011 stock market debacles. The finance minister said this while inaugurating World Investor Week 2017 being observed during October 2-8 across the country under the leadership of the securities regulator. “Those stock market debacles posed a blow and later the capital market witnessed a stable situation in 2013 following reforms in the regulatory body and also rules and regulations,” Muhith said. He said the government is prioritising investments and established relevant frameworks in the country. “But the investors always should make investments based on financial literacy for ensuring safety of their investments. Otherwise, they will have to face the consequences,” said Muhith, also the chief guest of the ceremony. In his speech the senior secretary of the bank and financial institutions division Md. Eunusur Rahman said the financial literacy is also a bread and butter issue for educated persons along with general investors.
Bangladesh-which remains largely ‘underinvested’ by global investors, can attract more foreign investment in its infrastructure sector to feed the country’s ongoing infrastructure demand, a leading global banker has said. At the same time, the country needs to have a transparent issuance policy that allows further depth and breadth to the country’s domestic bond market, the top banking executive has opined. “When you look at the Bangladesh debt market, I think it is underinvested by foreign investors”, according to Roberto Hoornweg, Global Head of Financial Markets of the international banking giant Standard Chartered. “So, I feel that there is room for more foreign investors to come in- especially those who are long term debt and currency investors”, Hoornweg, who was in Dhaka recently, said in an exclusive interview with the FE. The Standard Chartered top boss also identified the country’s nascent infrastructure sector as the perfect arena for drawing more overseas investment.
The Bangladesh Investment Development Authority (BIDA) will launch a pilot by the middle of next year aiming to provide better, easier and transparent services to investors from a single window. “The required fund is available and the one stop service will be launched by the middle of next year,” Kazi M Aminul Islam, executive chairman of BIDA, said. He made the announcement at a press briefing held Monday at a hotel in Dhaka. The law related to the ‘one stop service’ is in Parliament now and the rules are at final stage, he said. “We want to establish such a service, which would able to provide all required and effective services so that entrepreneurs can make investment and do business smoothly.” Though the reform work related to easing of doing business in the country started a couple of months back, the end-level work has just begun recently, he said at the briefing after the technical workshop on the service. “So, we don’t expect significant progress in the upcoming doing business index,” he said, expressing the hope that the progress would be evident in the next year’s index. The single physical or virtual location service is expected to provide consolidated services to the applicant and coordination of government institutions, operations and services in a specified regulatory area or activity.
India-BD deals on investment protection, $4.5b LoC tomorrow
Dhaka signs a deal with Delhi tomorrow (Wednesday) on a US$4.5 billion third line of credit (LoC) tagged with stringent conditions, officials said Monday. Besides, they said, the two sides will enter into another deal on investment promotion and protection the same day, in presence of the Indian finance minister, Arun Jaitley. Mr Jaitley is arriving in Dhaka today (Oct 3) for a three-day visit to Bangladesh. About the terms and conditions binding the use of the LoC funds officials at the Ministry of Finance (MoF) in Dhaka said Bangladesh will have to purchase 65 to 75 per cent of the services, goods or works from the Indian market with the money from the $4.5 billion LoC-III. Some $2.93 billion to $3.37 billion of the funds out of the total $4.5 billion worth of credits will go for such purchases, they said. The loan-signing ceremony is likely to be held at the Bangladesh secretariat with Bangladesh Finance Minister AMA Muhith and his Indian counterpart, Mr Jaitley, witnessing.
Exports to India are not picking up despite a host of positive initiatives by both the countries. “We are struggling to cross the $1 billion-mark on export to India although India is one of the high potential markets for Bangladesh,” said Abdul Matlub Ahmad, former president of the Federation of Bangladesh Chambers of Commerce and Industry. In fiscal 2016-17, Bangladesh’s exports to India stood at $672.40 million, according to data from the Export Promotion Bureau. Bangladesh will now endeavour to hit the milestone within the next two to three years, he said.
Dhaka Power Distribution Company Ltd (Desco), which distributes electricity to the capital’s northwest and eastern areas, has proposed hiking the retail power tariff by 6.34 per cent on an average, report UNB. It has sought refixing the average power tariff at Tk 7.40 per unit from existing Tk 7.20, increasing Tk 0.20 per unit. Placing the proposal at the public hearing arranged by Bangladesh Energy Regulatory Commission (Berc) at the TCB Auditorium in the city, Desco Managing Director Brig General (retd) Md Shahid Sarwar on Monday said if the bulk tariff is raised, they will have to count extra expense to provide electricity to the consumers. “To offset our possible loss, we need to enhance the tariff at the retail level,” he told the hearing. However, evaluating the proposal, a Berc technical committee said if the bulk tariff is raised, Desco may face 0.08 percent loss in its business. So, Desco could at best raise its tariff by Tk 0.7 per unit, it said.
Technology as a differentiator in the retail sector
Bangladesh’s retail industry is growing at an impressive rate due to the country’s booming economy. A few retail companies have crossed the milestone of 100 retail outlets in the country. More importantly, multiple formats of retailing are getting deployed, indicating that the industry is reaching a new level of sophistication. A number of large retail companies today use at least one software application to manage their organisational activities. While some of them have implemented globally recognised retail solutions, others have chosen locally developed ones. Most of these companies use software at the point of sale and to manage their finance and accounting. In Bangladesh, most of the large 15 retail companies have an online presence. This is an encouraging sign and indicates that the industry is well aligned with global trends. While online sales growth is expected to dwarf the overall industry growth by several percentage points, retail companies need to carefully choose the right channel from the available options. Global trends over the last three years suggest that the prospect of sales growth via mobile devices is much higher compared to that via other devices(desktop computers, tablets, etc.). There are two technology options for selling goods via mobile devices: a) mobile apps and b) mobile sites. Worldwide, consumers are showing a preference for mobile sites rather than mobile apps, primarily due to the high number of apps already installed on their devices.
Food officials have not been properly monitoring the market for long, allowing a section of unscrupulous traders to do business of essentials like rice and wheat without having licence and hoard them. A meeting of district and divisional-level food officials held in the city yesterday acknowledged the issue and decided to follow rules strictly from now on. Amid concern over hoarding of rice, the food ministry yesterday asked all importers, wholesalers, retailers and millers of rice and wheat to obtain licence from the Directorate General of Food by the end of this month. The meeting, chaired by Food Minister Qamrul Islam, made a decision to issue a circular in this regard by October 10, asking all unregistered traders of rice and wheat to secure the licence by October 30 and share their food stock information every 15 days with the respective district food offices.
World Food Program (WFP) Executive Director David Beasley has reiterated his agency’s commitment to supporting people fleeing violence in Myanmar as he met refugee families and saw its relief activities in new settlements in Cox’s Bazar. Mr Beasley has also appealed for $ 75 million in emergency aid over the next six months to help ease sufferings of the Rohingya people fleeing violence in Myanmar. He made the appeal while speaking at a press conference held at the hall room of Sayman Beach Resort in Cox’s Bazar town on Sunday evening. The WFP executive director also said his organisation will provide food support to more than 0.5 million Rohingya refugees who have fled to Bangladesh from Rakhine state in Myanmar until they are repatriated. “I heard heart-breaking stories on Sunday speaking to people who ran for their lives and saw loved ones killed before their eyes. These horrors must be stopped. Many of these people were receiving WFP food assistance in Myanmar. Now they will receive WFP food assistance in Bangladesh,” Mr Beasley said.
Bangladesh halts limestone import from Bhutan for two years
Limestone export from Bhutan to Bangladesh is slowing down because of changes in bilateral trade agreement protocol between the two countries, reports kuenselonline.com. Because it was the government policy to encourage value addition on mineral products instead of exporting the minerals in its raw form, local industries started to process limestone powder for manufacturing of poultry and fish feed in Bangladesh, which is the primary market. The issue arose because the earlier HS code was included in duty free commodity list under the trade agreement and the new HS attracts a tax of 59.9%. Exporters said that this is as good as blocking the import of this product into Bangladesh from Bhutan as the end buyers are small-scale poultry farmers who cannot afford such huge increase in prices. Since February 3 last year, Bhutanese exporters were unable to export this product.
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