TT-Clean: 77.1 | TK BC-Selling: 78.1
TK OD-Sight: 76.88 TK | TC-Selling: 78.1 TK

TT-Clean: 77.1 | TK BC-Selling: 78.1
TK OD-Sight: 76.88 TK | TC-Selling: 78.1 TK


TT-Clean: 77.1 | TK BC-Selling: 78.1
TK OD-Sight: 76.88 TK | TC-Selling: 78.1 TK

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Rate last updated: 02/01/2014 11:15:04 AM

Important Business News Extracts September 26 2016

Bangladesh Bank issues guideline on commercial paper

Bangladesh Bank yesterday issued a guideline on commercial paper (CP) for banks to put in place a uniform procedure for this short-term money-market instrument. Banks are allowed to invest in CPs, provide credit enhancements to CP issuers and act as an issuing and paying agent of CPs as per the guideline. However, banks shall not issue CPs in any form or provide any guarantee for CPs. Banks will have to ensure that they have written guidelines approved by their board of directors for dealing with CPs. The net worth of the issuer should not be less than BDT 300.0 million as per the latest audited balance sheet and the net profit after tax shall be positive for the last three years, according to the guideline. The current status shown in the Credit Information Bureau report of the issuer company shall be ‘standard’ and have no track record of classified status for last two years. Before investment in any CP, banks should assess the issuer’s overall debt repayment capacity by taking into consideration the issuer’s liabilities with other banks and financial institutions to make sure that the issuer has the ability to repay. It also said the current ratio of the issuer must be at least 1:1 as per latest audited balance sheet and the debt-equity ratio of the issuer must be maximum 70:30 as per latest audited balance sheet.


BB seeks list of top written-off loan defaulters

Bangladesh Bank has sought the list of top written-off loan defaulters as the sum have already crossed Tk10,000crore-mark during last one year, official sources said. The authorities of the central bank sent a letter to the managing directors of all scheduled banks on Sunday, asking them to send the list of top defaulters. The MDs have been asked to submit the list with the BB authorities within seven working days, says the letter. The letter also asked for the financial statements of top 20 written-off defaulters.

Source: http://www.dhakatribune.com/bangladesh/2016/09/25/bb-seeks-list-top-written-off-loan-defaulters/

BIDA approves GPH term loan

The Bangladesh Investment Development Authority (BIDA), through its memo dated September 22, has approved term loan worth US Dollar 94,849,404.00 under Austria’s OeKB (Export Credit Agency – ECA). It has also approved deferred payment facility worth USD 5.9 million under the ECA, said a statement of the GPH Ispat Ltd. BHF Bank of Germany will sanction the loan through a consortium of five banks of Bangladesh. The term for repayment of the loan is 12 years and a half at the rate of interest at 1.4% plus six months Libor (London Inter Bank Offered Rate). Australian Primetals Technology GmbH is the deferred payment providing agency and the term of repaying this loan is six years and three months from the issuance of the Performance Acceptance Certificate. The GPH Ispat Ltd has informed the BSEC (Bangladesh Securities and Exchange Commission), DSE (Dhaka Stock Exchange and CSE (Chittagong Stock Exchange) of the loan acceptance approval.

Source: http://print.thefinancialexpress-bd.com/2016/09/26/152540

Higher NPLs widen interest spread: Bangladesh Bank study finds NPL net of

provisions to capital higher in BD than in India, SL
Non-performing loans (NPLs) net of provisions to capital in Bangladesh’s banking sector is higher than in India and Sri Lanka, which is also responsible for higher interest rate spread, experts and academics said. Among the three countries, the banking sector of Bangladesh scored higher NPL net of provisions to capital during the last five years, according to a Bangladesh Bank (BB) study, prepared by Ala Uddin and Shamima Sharmin. The research paper, styled ‘Banking Sector Soundness and Financial Stability: The Cases of Bangladesh, India and Sri Lanka’, was presented in a plenary session on banking at the two-day International Conference for Bankers and Academics (ICBA). Higher credit-portfolio loss serves as a stain in smooth financial intermediation process, according to the findings. Higher NPL ratio might serve as hindrances to reducing financial- intermediation cost in Bangladesh, the researchers explained. Banking sectors of both India and Sri Lanka are in a much better position in terms of capital adequacy, asset quality, and liquidity compared to those in the Bangladesh banking system, according to the paper.


CAPITAL MACHINERY: Banks asked to collect lifespan certificates before import

Bangladesh Bank on Sunday asked the country’s scheduled banks to collect lifespan certificates against capital machinery from foreign exporters when the local importers will open letters of credit to import such products. The BB issued a circular to the authorised dealer branches of all banks saying that age-old machinery, imported from abroad, was harmful for public health. Besides, the old-age capital machinery are not also environment friendly, the circular said. The BB issued the circular following a directive given by the commerce ministry on August 10. A BB official told New Age on Sunday that the commerce ministry and the BB had recently received a number of allegations that the importers had frequently imported old-age capital machinery from abroad.Such products are not also viable enough for the country’s industrial sector, he said. The BB also received allegations that a section of people have been laundering money abroad through the import of capital machinery by manipulating prices through under-invoicing.

Source: http://newagebd.net/253394/capital-machinery/

Research can help solve banking problems: analysts

The country’s banking industry is plagued by rising nonperforming loans (NPL), governance and internal control failures, liquidity gluts and slow credit growth, experts said yesterday. The problems can be addressed through rigorous studies and research, they added, speaking at a two-day international conference for bankers and academics at the Bangladesh Institute of Bank Management or BIBM. BIBM and Australian Academy for Business and Social Sciences jointly organised the programme attended by bankers, academics, researchers, practitioners and policymakers from home and abroad.

Source: http://www.thedailystar.net/business/research-can-help-solve-banking-problems-analysts-1289761

Conflict over insurance of public projects

As per the existing insurance laws of Bangladesh, any public property, moveable or immovable, has to be insured only with Sadharan Bima. After private players entered the insurance sector in the 1980s, Sadharan Bima’s monopoly on public property came under scanner. Later in 1990, a deal was signed between the Bangladesh Insurance Association, a forum of the private companies, and Sadharan Bima on insuring the public property. As per the deal, Sadharan Bima will solely issue insurance policy for public property but will share 50 percent of the premiums with the private insurers. This distribution of share will be equal among the private companies, no matter what the size of the company is. For example, premium earnings from public property insurance were nearly Tk 390 crore in 2015. According to the rule, Sadharan Bima got 50 percent of the premiums worth Tk 195 crore and the remaining 50 percent was distributed among 44 other non-life insurers equally, meaning that each company got about Tk 4.43 crore from public property insurance.

Source: http://www.thedailystar.net/business/conflict-over-insurance-public-projects-1289752

China likely to pledge big: During President Jinping’s visit next month, China may

commit loans under 5-year cooperation plan involving billions of dollars
China may commit to a five-year comprehensive cooperation plan, including assistance in several billion-dollar projects, during the Chinese president’s Bangladesh visit in the middle of next month. Already, the Chinese government has expressed initial interest in giving around USD 23 billion in soft loan for 20 projects to be implemented between 2016 and 2020. A Memorandum of Understanding (MoU) is likely to be signed in this regard when Xi Jinping comes to Dhaka on October 13 or 14, finance ministry officials said. The comprehensive plan may also include a commitment for increasing Chinese grant and long-term cooperation in disaster management. All the line ministries will hold a meeting at the Economic Relations Division (ERD) to discuss the latest about the 20 projects on October 2. The projects will later be finalized at an inter-ministry meeting, said one official. Before that, on September 28 and 29, the ERD will sit with officials of the Chinese Exim Bank over signing of loan agreements for two of these projects. The two projects involve purchasing six ships from China with a loan of USD 184 million and setting up Dasherkandi Water Treatment Plant with a USD 280-million loan. The loan agreement is likely to be signed during the Chinese president’s visit, said an ERD official. Bangladesh has already selected some Chinese companies to implement seven to eight of the 20 projects, said the finance ministry official, asking not to be named.

Source: http://www.thedailystar.net/frontpage/china-likely-pledge-big-1289737

Robi-Airtel merger will complete in a month

Robi and Airtel will wrap up their entire merger process by October 23, said a senior official of Robi yesterday. The development comes after Robi, the main player of the merged entity, on September 21 collected the Supreme Court’s certified order that gave the go-ahead to the much-awaited merger between the two operators. Robi has to complete the merger within one month of receiving the Supreme Court order, the official said. Since October 21 is a Friday, Robi will get an additional two days. In the merged entity, Axiata, the parent company of Robi, will hold a 68.7% controlling stake. Bharti Airtel will hold a 25% share in the company and Axiata’s old partner NTT Docomo of Japan 6.3%. Currently, Malaysia-based Axiata has a 91.6% stake in Robi and NTT Docomo 8.4%. The operators will start the integration of their networks from the first week of October. Besides, the operators will also need to amalgamate their spectrums, which is a complicated process in itself.

Source: http://www.thedailystar.net/business/robi-airtel-merger-will-complete-month-1289746

Dan Cake looks to double production

Stepping into its second year, Dan Foods plans to double its manufacturing capacity by installing a new production line at its factory in Savar. The maker of Danish muffins and pound cakes under the brand name Dan Cake will introduce new bakery items such as donuts and brownies under the new initiative by the first quarter of next year. Dan Foods currently produces muffins and pound cakes through a single production line, though it has the capacity to install four production lines on its 18,000 square feet of main manufacturing area. The factory is located on 1.6 acres of land in the neighborhood of Birulia.It supplies around 140 tonnes of muffins and pound cakes a month to the local market. Dan Foods began its journey in Bangladesh in 2012 through a joint venture between Dan Cake, Denmark and Pandughar Ltd. It launched its products last year. Dan Foods’ initial investment was Tk 55 crore. Bangladesh is also the first country in Asia for Dan Cake; it looks to step into other countries in the region from here.

Source: http://www.thedailystar.net/business/dan-cake-looks-double-production-1289758

Local and Global Stock Indices

Index NameClose ValueValue ChangePercentage Change
Dow Jones Industrial Average18,261.45↓131.01↓0.71%
Nikkei 22516,612.57↓141.45↓0.84%
FTSE 1006,909.43↓1.97↓0.03%

World Commodities

CommodityClose ValueValue ChangePercentage Change
Crude Oil (WTI)*$44.82↑0.34↑0.76%
Crude Oil (Brent)*$46.28↑0.39↑0.85%
Gold Spot*$1,333.75↓3.81↓0.28%

Major Currencies Exchange Rates Movement in Last Seven Days






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