Important Business News Extracts September 29 2016
Bangladesh Bank may approve City Bank’s share sale to IFC
Bangladesh Bank considers allowing City Bank to sell its 5% equity shares to International Finance Corporation, the private sector arm of the World Bank Group, about eight months after the signing of the deal. The development came after a meeting between Finance Minister AMA Muhith and Bangladesh Bank Governor Fazle Kabir at the former’s office last week. Earlier in February, the City Bank signed a deal with the IFC to sell 5% of its shares at more than BDT 1.3 billion. The IFC will pay BDT 28.3 for each share, which includes a premium of BDT 18.3. A City Bank share closed at BDT 23.3 on the Dhaka Stock Exchange yesterday. Accordingly, the City Bank, which is a first generation private lender, applied to the central bank for approval. But the agreement did not get through after the BB declined to approve the deal. The central bank had suggested that if City Bank needs capital, it should raise it from the local market, not from any foreign organization.
Asia Pacific Group recognition to help attract more Foreign Direct Investment: Bangladesh Bank
Foreign investors will choose Bangladesh more for foreign direct investment and portfolio investment in the capital market as its achievement in containing money laundering and terror financing has been recognized by the Asia Pacific Group, said Bangladesh Bank deputy governor Abu Hena Mohd Razee Hassan. The APG is a global anti-money laundering organization. Razee Hasan, who led the Bangladesh delegation to the recently concluded 19th annual meeting of the APG in San Diego, California of the United States, came up with the observation at a press briefing at the BB headquarters in Dhaka on Wednesday. He said a mutual evaluation report on Bangladesh regarding its steps to contain money laundering and terror financing has received the final approval of the AGP. ‘The report has been sent to Bangladesh and finally it will be published on the APG web site,’ he told reporters mentioning that out of the 40 recommendations prepared by the financial action task force of the UN body, Bangladesh became compliant for six of them, largely compliant for 20 and also partially compliant for 14. The APG recognition came from its 19th annual meeting, he said.
Merger and acquisition scheme: BSEC to include provision of vetting before court’s approval
The securities’ regulator is set to include a provision of completing the vetting on the scheme prepared for merger and acquisition before seeking the court’s approval. The regulatory plan comes in the backdrop of some complexities while executing the merger and acquisition of some companies following the High Court’s (HC) order. The latest complexities arose while completing amalgamation process of Summit Power which did not allot shares to the shareholders of another listed company before the record date. A senior official of the securities’ regulator said sometimes problems are created when irregularities are found in the merger’s scheme approved by the HC. He said investors’ interest will also be protected properly if the vetting is completed timely. To make the merger and acquisition rules time befitting, a four-member body been formed by the securities’ regulator is working to C changes in the existing rules.
The Asian Development Bank yesterday announced a $1.5 billion fund to build a key train line from Dohazari in Chittagong to Cox’s Bazar, in its largest investment in railways in the continent. In a statement, the ADB said the new railroad, which is part of the Trans-Asia Railway network, will also improve Bangladesh’s access to Myanmar and beyond. China had sought to finance the project, so this development will be yet another setback for Beijing, whose efforts to turn its Silk Road investments into workable projects are running into brick walls in parts of Asia. The loan, which was approved yesterday in Manila, is the largest amount of funding by any multilateral lender on a single project in Bangladesh, superseding World Bank’s commitments, which were all below $1 billion.
Government reiterates implementing new VAT law from next year
The government Wednesday reiterated its ‘firm stand’ to implement the new VAT and Supplementary Duty (SD) Act, 2012 from next year. The 10-member parliamentary standing committee on the ministry of finance will extend all-out cooperation to enforce the new law from July 1, 2017, said Dr Md Abdur Razzak, chairman of the committee. The Value Added Tax (VAT) online project under the NBR organized the program Wednesday at the city’s Institution of Diploma Engineers Bangladesh (IDEB). The partnership program aims to impart training to leaders of businesses under Training for Trainer (ToT) program of the NBR. A three-day ToT will be held at the VOP office under the program, starting from today (Thursday). Addressing the program as chief guest, Dr Razzak said businessmen may think that implementation of the new law will further be delayed by another year but it would not happen this year. State minister for finance M A Mannan said sales tax or GST is much simpler than the VAT system. He suggested the NBR to simplify VAT form and ease refund system to make it friendly for businesses.
GLOBAL COMPETITIVENESS INDEX: Bangladesh moves up 1 notch in slow progress
Bangladesh has moved up one notch to rank 106th among 138 countries in the Global Competitiveness Index in 2016 mainly on better performance in basic requirements such as infrastructure and institutions but the country is stuck in lower-end segment of the index. In 2015, the country ranked 107th in the index which is prepared by the World Economic Forum every year. The overall score of Bangladesh in 11 selected topics has also improved by 1.06% to 3.80, on a scale of maximum 7, this year from 3.76 last year, according to the Global Competitiveness Report-2016 released worldwide on Wednesday. The report also said that Bangladesh moved only one step up in last six years as the country had ranked 107th in 2011 though the country’s score increased by 7.0% in the period. The Centre for Policy Dialogue, the local partner of the Geneva-based WEF in preparation of the report, unveiled the Bangladesh part of the report at a press conference held at the CIRDAP auditorium in Dhaka. At the briefing, the CPD also released the Bangladesh Business Environment Study which the think-tank prepared analyzing the findings in the Bangladesh part of the GCR. Among the Bangladesh’s competing countries, India has made remarkable progress, advancing by 16 steps up to 39th position this year from the last year’s 55th position.
Cabinet okays BDT 3.1 billion overhaul for Siddhirganj power plant
The cabinet committee on public purchase approved on Wednesday overhauling of the Siddhirganj Power Plant (SPP) at a cost of over BDT 3.1 billion for smooth power generation and transmission. The approval was given following recurring breakdowns of the plant that had severely hampered uninterrupted power generation and supply. The breakdown in ‘bus bar conductor’ and ‘stator winding’ of generator numbers 8, 11 and 16 was later repaired locally. The power plant used local expertise to repair the second-time breakdown. The SPP, which has a 210-megawatt capacity and located in Narayanganj district, has been running on commercial basis since its commissioning on September 3, 2014. The experts suggested running of the power plant with de-rated loads (100-120 MWs) after recurrence of the breakdown, according to the power division.
Local software and digital media firm Tradeshi has teamed up with China’s Alibaba.com as its e-commerce partner for Bangladesh. The companies signed a deal on June 3 in China, said Shadab Parvez, managing director of Tradeshi, at a press meet in Dhaka. Now under separate deals with Tradeshi, local e-commerce companies will be able to purchase or sell products via Alibaba. “This process will help boost export volumes and bring diversity,” said Parvez. Tradeshi will help develop the digital export marketing capabilities of Bangladeshi enterprises and make Alibaba’s online channel popular in Bangladesh. Alibaba’s representatives will be available for seminars and workshops on digital export marketing and e-commerce in Bangladesh. They can groom around 5,000 e-commerce entrepreneurs in the next three years, said Rajib Hossain, chairman of Tradeshi. Tradeshi is also expected to launch an association for the existing Bangladesh-based Alibaba.com ‘Gold’ suppliers.
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