Buyers’ credit in the country’s business sector continued to maintain an upward trend and reached to almost USD5 billion at the end of July as the local importers are taking the advantage of receiving foreign loans at lower rates of interest. The buyers’ credit increased by 11.0% to USD 4.9 billion as of July 31 from USD 4.5 billion as of June 30 of this year, according to the latest Bangladesh Bank data. Bangladesh Bank officials said that the increased trend in the buyers’ credit might put the financial sector at risk as it would become a burden for the country. Besides, the country has to pay a large amount of interest to foreign banks and offshore banking units of Bangladeshi banks against the buyers’ credit taken by the local importers. According to BB rules, the importers are now allowed to take buyers’ credit to import capital machinery and industrial raw materials. The importers usually take the external credit at interest rates within the range of 5.0%. The BB data showed that the buyers’ credit increased almost in every month in last one year as it stood at USD 4.2 billion in May, USD 3.9 billion in April, USD 3.8 billion in March, USD 3.7 billion in February, USD 3.8 billion in January of 2016.
Bangladesh saw 17.0% rise in remittance inflow last month from its expatriates as they sent home more of their earnings on the occasion of Eid ul Azha, one of the largest Muslim festivals. The total amount of remittance sent in August ahead of Eid was USD 1.2 billion compared to USD 1.0 billion in July, according to the Bangladesh Bank data. The remittance Bangladesh received in the first two months of the current fiscal year was 15.0% lower than the same period in previous fiscal year. A total of USD 2.2 billion remittance came in July-August period while at the same time last year, it was USD 2.6 billion. Remittance inflow became slower after gulf countries fell in crisis of low oil price, said a senior executive of Bangladesh Bank. Remittance from gulf countries dropped by 5.7% to USD 8.6 billion in the last fiscal year compared to USD 9.0 billion in the previous fiscal year. The total remittance came below USD 15.0 billion mark in the last fiscal year reaching USD 14.9 billion mainly hit by low oil price in global market. Bangladesh experienced a significant rise in manpower export to Saudi Arabia last year after the country lifted ban on hiring Bangladeshi workers.
Foreign institutions, including local business groups, have showed interest to be strategic partners of the country’s demutualized premier bourse, officials said. The officials of the Dhaka Stock Exchange (DSE) have said foreign partners meanwhile held meeting with the DSE board of directors. Some foreign partners Monday held a meeting with board of directors of the premier bourse and made a presentation on their capacity. According to DSE officials, foreign strategic partners who attended Monday’s meeting are: International Finance Corporation (IFC), a member of the World Bank Group, NASDAQ, an American stock exchange, Common Wealth Development Corporation, Drummer and Partners, a Swedish Partner, KFW, a German Corporation and Kingway Capital. Square Group also attended the Monday’s meeting with an interest of becoming strategic partner of the premier bourse, the DSE official said. Another multinational professional services firm Ernst & Young made its presentation in last board meeting. International professional services firm Price WaterhouseCooper, will give a presentation in next board meeting as part of its interest to be strategic partner, the DSE officials said. As per the demutualization scheme approved by the Bangladesh Securities and Exchange Commission (BSEC) on September 26, 2013, the DSE shareholders primarily got 40.0% of their stakes along with receiving TREC (trading rights entitlement certificate) certificates.
Major activities at the newly established Bangladesh Investment Development Authority (BIDA) are being ‘hampered’ as officers drawn from the defunct BoI lack legitimate authority to sign on decisions, sources said. The now-defunct Board of Investment (BoI) used to actually run with officers deputed from different departments, including autonomous organisations. The government formed BIDA with the merger of BoI and the Privatisation Commission aiming to expedite services to businesses in respect of investment and industrialisation. The investment-promotion entity practically came into being on September 01 last. Kazi M Aminul Islam leads it as executive chairman.
Government to declare Product of the Year for export push
The government is going to announce the ‘Product of the Year’ for the first time in the current financial year 2016-17 to encourage product-specific exports. Senior officials of the commerce ministry have already held two meetings and prepared a shortlist of three export products. The list will be submitted to commerce minister Tofail Ahmed within short time, officials concerned said. The short-listed three export products are: jute goods, denim and pharmaceuticals. The ministry will select a product every year aimed at diversification of export items and will take necessary steps to augment the export prospect of the product. Zahir Uddin Ahmed, additional secretary (export) of commerce ministry, told New Age on Monday that the work was still on progress and finally the commerce minister would announce the Product of the Year for the FY17. According to the Export Policy, every year a specific product will be picked as the ‘Product of the Year’ to encourage product-specific exports. This is for the first time that the commerce ministry has taken the initiative to select the Product of the Year though the provision was included in the Export Policy 2012-2015, Export Promotion Bureau officials said. Any of the three export products — jute goods, denim and pharmaceuticals — will be declared as the Product of the Year, EPB officials said.
BERC readies draft LPG regulation: Insurance a must for its businesses
The government has finally stepped in to formulate the country’s first-ever LPG (liquefied petroleum gas) operation, storage, supply, distribution and marketing regulation to ensure safety and quality in mounting usages of the fuel. The country’s energy regulator has already drafted the regulation, spelling out necessary safety measures, which would be called as the Bangladesh Energy Regulatory Commission (BERC) LPG Storage, Bottling, Transportation and Dispensing Codes and Standards, 2016. It would cover storage, bottling, transportation and dispensing, including container, piping and associated equipment and appurtenances of LPG, a senior BERC official said. Insurance has been made mandatory for the LPG businesses to cover any loss and damage to the public life and property due to fire or any operational reason or accident etc. A licensee will be responsible for any mishap that takes place at his workstation or LPG outlets, on distributor’s premises or during transportation of LPG due to incompetence, negligence or use of substandard material or equipment, and will be liable to compensate the loss of life and property, it spells out.
Smartphone imports rose 57.4% in the first half of 2016 from a year earlier, in a development that will bring cheers to mobile operators and the government alike as it strives for a Digital Bangladesh. Between January and June, 3.6 million pieces were brought into the country, according to Bangladesh Mobile Phone Importers Association. Last year, the ratio was one in five, he said, adding that it will definitely become bigger in the next few years. During the January-June period, the industry imported a total of 13.5 million handsets, up 23.8% year-on-year. Smartphones accounted for 26.6% of the imports in the first half of 2016, in contrast to 20.9% a year earlier. This year, the importers aim to sell 9.0 million smartphones. Symphony’s low-cost smartphones are dominating the segment. The local brand accounted for 43.8% of the total smartphones imported during the period. Though Samsung is far behind Symphony in import quantity, it superseded the local brand in import value. Samsung accounted for 18.8% of the smartphone imports in the first half of the year, but the import value of handsets was 34.0%. In contrast, Symphony’s import value stood at 30.3%.
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