industrial npls swell further in h1 of fy'17€¦ · daily news flash, 11th april, 2017 1...

Daily News Flash, 11th April, 2017

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INDUSTRIAL NPLS SWELL FURTHER IN H1 OF FY'17 .............................................................................. 1

DSEX DIPS BELOW 5700-MARK AGAIN ......................................................................................................... 3

BOURSES VOW TO WORK JOINTLY .............................................................................................................. 4

MAJOR SECTORS WITNESS CORRECTIONS ............................................................................................... 5

BOOMING ECONOMY TO HELP INSURANCE BLOOM INTO $1.5B SECTOR BY 2020 ...................... 6

OIL RISES TOWARDS $56 ON LIBYAN FIELD SHUTDOWN, SYRIA STRIKE ....................................... 7

GOVT HOUSE LOAN CEILING TK1CR ........................................................................................................... 7

GOVT MAY FINALISE TK390,771CR AS FY18 BUDGET OUTLAY ........................................................... 8

BB PROJECTS OVER 7PC GROWTH BUT REMITTANCE POSES RISK ................................................. 8

HASINA WOOS INDIAN INVESTORS, ASSURES 100PC PROFIT REPATRIATION ............................ 10

STREAMLINE INVESTMENT IN NON-LISTED COS .................................................................................. 11

CERAMICS GOODS MAKERS SEEK VAT LAW CHANGE FOR LOCAL INDUSTRY PROTECTION

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RICE PRICES RISE ON FLASH FLOODS....................................................................................................... 13

RETAIL BANKING GROWING FAST ............................................................................................................. 14

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INDUSTRIAL NPLS SWELL FURTHER IN H1 OF FY'17 Banks' classified loans to the country's industrial sector swelled by over 24 per cent or Tk 48.17 billion to Tk 245.63 billion in the first half (H1) of the current fiscal, compared to that of the corresponding period of the previous fiscal. Officials said such climb in the amount of dud loans was taking place despite close monitoring by the central bank to stem the tide.

DSEX -11.12 Gold (Ounce) $1251.50 Dollar 79.72 (Buy) 79.72 (Sell) CSCX -34.95 Oil (Barrel) $52.67 Euro 84.41 (Buy) 84.44 (Sell)


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The non-performing loans (NPLs) in the sector during the July-December period of the financial year (FY) 2016-17 rose sharply from Tk 197.47 billion in the same period of last fiscal, according to the central bank's latest statistics. "Higher NPLs with the state-owned commercial banks (SoCBs) have pushed up the overall classified loans in the financial sector during the period under review," a senior official of the Bangladesh Bank (BB) told the FE Monday while explaining the latest trend in such loans. During the period, the total amount of NPLs with the SoCBs soared more than 41 per cent to Tk 86.51 billion from Tk 61.17 billion in the same period of the FY16. "We've already expedited our monitoring and supervision to reduce the amount of NPLs through increasing the recovery of such loans," the BB official noted. However, the total amount of classified loans with the private commercial banks (PCBs) increased by nearly 34 per cent to Tk 89.12 billion during the period from Tk 66.61 billion in the H1 of the FY16. The volume of NPLs with the foreign commercial banks (FCBs) dropped by 10.21 per cent to Tk 6.37 billion in the first six months of this year from Tk 7.09 billion in the H1 of the last fiscal. The classified loans with specialised banks also fell by 1.44 per cent to Tk 43.02 billion in the July-December period from Tk 43.65 billion six months before. On the other hand, the volume of NPLs with non-banking financial institutions (NBFIs) increased by 8.81 per cent to Tk 20.61 billion in the H1 of the FY17 from Tk 18.94 billion in the first six months of the FY16. Meanwhile, disbursement of the overall industrial credits, covering working capital and term loans, increased by 16.59 per cent to Tk 1446.07 billion during the July-December period of the FY17 from Tk 1240.26 billion in the matching period. The estimate includes disbursement of fresh credits, the rescheduling of term loans and fund release for balancing, modernisation, rehabilitation and expansion (BMRE) of industrial units. Talking to the FE, another BB official said higher capital-machinery imports pushed up the disbursement of overall industrial loans during the period under review. The import of capital machinery or industrial equipment used for production jumped by 58.55 per cent to $3.51 billion during this July-February period against $2.21billion of the same period of last fiscal.


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He also said the existing upward trend in import of capital machinery may continue in the coming months for implementation of different ongoing infrastructure-development projects across the country. Currently, the government is implementing nine projects under a Fast-Track Project Monitoring Committee, headed by Prime Minister Sheikh Hasina. Senior bankers, however, said the power, telecommunications, pharmaceutical, textiles, garment and transportation sectors had received the lion's share of such credits. "The flow of industrial credit may increase further in the coming months if the implementation of different ongoing infrastructure-development projects continues," a senior official of a leading PCB explained. He also said the upward trend in the disbursement of industrial loans may continue in the coming months as the BB is encouraging the banks and NBFIs to expedite their credit flow to the productive sectors. The recovery of the industrial loans increased by nearly 42 per cent to Tk 1210.89 billion during the H1 of the FY17 from Tk 853.61 billion in the same period of the last fiscal. Total outstanding loans in the industrial sector increased by 17.31 per cent to Tk 3225.88 billion during the period under review from Tk 2749.98 billion in the H1 of FY16, the BB data showed. Source: http://print.thefinancialexpress-bd.com/2017/04/11/169706

DSEX DIPS BELOW 5700-MARK AGAIN Stocks extended the losing streak for fourth session in a row Monday, with key index of the premier bourse came down below the 5,700-mark again, as investors continued their selling spree. Daily trade turnover on Dhaka Stock Exchange (DSE) also came down to two-month low at Tk 7.22 billion, which was 7.08 per cent lower than the previous day's Tk 7.77 billion. It was the lowest single-day transaction since February 7, this year when the turnover totaled a record Tk 6.20 billion.

Analysts said the market witnessed another downbeat session as investors were mostly on selling mood, especially from bank, engineering and fuel and power sectors' issues. The market started with a downward trend and the index fell sharply by 38 points within first half of the session, but index fought back and recovered 27 points in later half as financial institutions and textile stocks took the lead, finally closed 11 points lower. By the end of the session, DSEX, the prime index of the Dhaka Stock Exchange (DSE), came down below the 5700-mark after five straight sessions and settled at 5,689.67, losing 11.12 points or 0.19 per cent. DSEX lost more than 87 points in the past four consecutive sessions after reaching record high of 5,777 points on April 4 since its introduction in January, 2013. The two other indices also finished lower. The DS30 index, comprising blue chips, fell 3.10 points or 0.15 per cent to finish at 2116.46. The DSE Shariah Index (DSES) lost 2.31 points or 0.17 per cent to close at 1,302.

http://print.thefinancialexpress-bd.com/2017/04/11/169706


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EBL Securities, a stockbroker, said, "The market showed robust selling vibe that continued till the mid-session as risk-averse investors spurred their profit booking in sector specific large-cap stocks especially from bank and engineering sectors". "However, in the later part of the session, opportunistic investors opted to take fresh position in sector specific stocks and upbeat vibe emerged especially riding on financial institutions and food and allied sectors but failed to close green due to mid-session sell pressure," said the stockbroker. The banking sector maintained its dominance in turnover chart for the second day, capturing 19 per cent of the day's total turnover value. The non-bank financial institutions followed next, seizing 16 per cent of the total turnover. Sheltceh Brokerage, "Following last corrective session, the prime index of the DSE showed volatility throughout the session amid profit taking". IDLC Investments, a merchant bank, said, "DSEX came down below 5,700 points level, losing a sum of 87.5 points during last four trading sessions with smaller caps confronting heavy selling pressure". Among the major sectors, financial institutional institutions showed the best performance with 1.90 per cent gain, riding on the price appreciation of ICB, Delta Brac Housing Finance and LankaBangla Finance, which gained 3.80 per cent, 3.20 per cent and 4.0 per cent respectively, followed by food and allied sector 1.43 per cent. Engineering sector posted the highest loss of 0.87 per cent, closely followed by banks 0.73 per cent, fuel and power 0.30 per cent, telecommunication 0.09 per cent and pharmaceuticals 0.07 per cent. The port city bourse, the Chittagong Stock Exchange (CSE), also closed lower with its Selective Categories Index - CSCX - losing 34.95 points to settle at 10,684. Losers beat gainers as 133 issues closed lower, 90 closed higher and 30 remained unchanged on the CSE. The port city bourse traded 18.93 million shares and mutual fund units' worth Tk 545 million in turnover. Source: http://print.thefinancialexpress-bd.com/2017/04/11/169642

BOURSES VOW TO WORK JOINTLY Both the stock exchanges have decided to work jointly to ensure further development of the country's capital market. The decision was taken Monday at a meeting held at the office of the Dhaka Stock Exchange (DSE). After the meeting, managing director of Chittagong Stock Exchange (CSE) M. Shaifur Rahman Mazumdar said both the stock exchanges would work together for sustainable development of the capital market. "Initially, we will try to formulate a strategy paper targeting further development of the capital market. Later, the attention of state policy makers will be drawn for implementing the development policy," Mazumdar said. He said the exchanges' development policy will include some budget proposals. At the meeting Abdul Matin Patwary, acting managing director of DSE, presented some budget proposals for the capital market. The proposals were: full tax exemption facility for another three years for both bourses for sustainable growth and smooth operation of the exchange, widening of gap of corporate tax rate between the listed and non-listed companies by at least 10 per cent and tax holiday facility for at least three years for newly listed companies. The exchanges also urged the government to increase the ceiling of tax-free dividend income to Tk 100,000 from the existing Tk 25,000, to bring government companies' shares to the capital market, to enhance trading time and introduce a trading board for small companies. The issues of developing trading software jointly, opening new branch of brokerage houses, among others, were also discussed at the meeting.


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The DSE chairman Dr. Abul Hashem, CSE chairman Dr. A. K. Abdul Momen spoke at the meeting. DSE independent directors Justice Siddiqur Rahman Miah, Monowara Hakim Ali, Abul Hashem, Waliul Islam, M Kaykobad, shareholders directors Md. Rakibur Rahman, Md. Shakil Rizvi, Sharif Ataur Rahman, MD. Hanif Bhuiya and CSE independent directors Major General Mohammad Shamim Chowdhury, nwc, psc (Retd.), Prof. Mamtaz Uddin Ahmed and shareholder director Major (Retd.) Emdadul Islam, were present among others. Meanwhile, the City Bank Capital Monday signed a memorandum of understanding (MoU) with CSE to work as arranger of strategic investors required for completing demutualization of the port city bourse. Source: http://print.thefinancialexpress-bd.com/2017/04/11/169645

MAJOR SECTORS WITNESS CORRECTIONS The Dhaka bourse Monday declined marginally, extending the losing streak for the fourth consecutive session as major sectors witnessed corrections. The market started the session positively, but soon afterwards it witnessed a straight fall that continued for more than one hour. Later, an effort was observed during midsession that helped the Dhaka Stock Exchange (DSE) to minimise large fall in the indices. At the end of the session, the DSE broad index DSEX shed 0.19 per cent or 11.12 points to close at 5689.67. According to a market review of International Leasing Securities, the premier bourse closed lower for the fourth session in a row amid choppy trading. The shariah-based index DSES lost 0.17 per cent or 2.31 points to close at 1301.94, whereas the blue chip index DS30 declined 0.14 per cent or 3.10 points to close at 2116.45. "The investors' shaky confidence prevailed throughout the session in the current gloomy market scenario which resulted in selling pressure," said the International Leasing Securities. Of 327 issues traded, 121 advanced, 168 declined and 38 were unchanged on the premier bourse. The turnover stood at above Tk 7.22 billion which was 7.0 per cent less than the turnover of the previous session. Of the total turnover, Tk 253 million came from transactions executed in spot market, while Tk 244 million came from block board. The financial institution, food and textile sector witnessed buoyancy, but the selling frenzy in engineering, bank and fuel & power sectors contributed the plunge in indices. Among the major sectors which declined, bank lost 0.7 per cent, engineering 0.9 per cent, fuel & power 0.3 per cent, general insurance 0.5 per cent, pharmaceuticals & chemicals 0.1 per cent and telecommunication 0.1 per cent. Investors' activities were concentrated mostly on bank which contributed 18.70 per cent in market turnover followed by financial institutions 16.40 per cent, pharmaceuticals & chemicals 13.20 per cent, textile 12.60 per cent and engineering 12.10 per cent. LankaBangla Finance topped the turnover chart with a value of Tk 452 million followed by RSRM Steel Tk 253 million, IDLC Tk 249 million, Regent Textile Mills Tk 205 million and City Bank Tk 198 million. Matin Spinning Mills was the number one gainer with a rise of 9.65 per cent to close at Tk 44.30, whereas United Airways topped the losers chart after declining 5.97 per cent to close at Tk 6.30. Source: http://print.thefinancialexpress-bd.com/2017/04/11/169647


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BOOMING ECONOMY TO HELP INSURANCE BLOOM INTO $1.5B SECTOR BY 2020 Bangladesh's life insurance market is likely to expand US$1.5 billion in the next three to four years, driven mostly by a growing economy, a senior MetLife executive has said. "Currently, Bangladesh's life insurance market is around $1.0 billion a year and we expect it will expand at least 50 per cent in around 2020," Chris Townsend, the US-based insurer's Asia president, said. Bangladesh's economy has grown over 6.0 per cent in past decade and the life insurance has also advanced steadily, he said, drawing a close relationship between the GDP growth and the insurance sector. "Insurance growth outpaced the GDP rate," Mr Townsend, who had visited Dhaka in the past week, told the Financial Express in a recent interview in Dhaka, and called the industry "amazing." He has been president of MetLife's Asia region since 2012. He is also a member of the company's executive group. He oversees all of MetLife's businesses and operations across 12 markets in Asia including Bangladesh and he said that the country's market is one of the fastest growing in the continent. He, however, noted Bangladesh's insurance penetration remained lowest in South Asia as the rate in other countries was around 3.5 per cent. "Bangladesh's penetration rate is around 0.5 per cent, which indicates the level of development of insurance sector in a country," he said. Penetration is measured as the ratio of premium underwritten in a particular year to the GDP. For a robust growth of insurance business, he placed importance on the partnership between the banks and the insurers. He believed that such partnership with the banks will accelerate insurance growth and enhance its penetration tremendously. Terming it a key challenge for Bangladesh, he said most of the countries and the insurers of the region had distribution channels named bancassurance. "We believe the biggest opportunity for the growth in the sector is bancassurance," he said. Bangladesh's insurance sector is run though an old-fashioned mode and MetLife Bangladesh has 15,000 agents. He said his company had been the number one player in the past 20 consecutive years commanding a market share of around 28 per cent. He disclosed that the MetLife Bangladesh has emerged the biggest investor in the country's government bonds with its share equivalent to over $1.0 billion. "We are the biggest investor in the government's long-term bonds," he said. He said that Bangladesh is one of the fastest growing market for the MetLife. Bangladesh ranks number four country in terms of its profitability in the region. He said globally they over 200 products and they launch products on intensive research on the needs and expectation of the customers. MetLife has around 12 products in the country now. He said his company has been promoting actuary education through scholarship to deserving students. Prior to joining MetLife, Townsend was, since 2010, Chief Executive Officer of the Asia Pacific region at AIG. Townsend currently sits on the Board of Directors for MetLife's philanthropic organisation, the MetLife Foundation. He also serves as Vice Chairman of the US-Korea Business Council, Advisor to the Asia Society, and Commissioner on the Asia Economic Strategy Commission (AESC) at the Center for Strategic and International Studies (CSIS).


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MetLife bought American Life Insurance Company in 2010 and Bangladesh's operation also merged thorough MetLife. He said half of its business comes from two major cities-Dhaka and Chittagong and the remaining from other districts. One of his key objectives to visit the country was to launch a tab-based insurance solution named "Butterfly,' which helps calculate premium rates easily. Source: http://print.thefinancialexpress-bd.com/2017/04/11/169667

OIL RISES TOWARDS $56 ON LIBYAN FIELD SHUTDOWN, SYRIA STRIKE Oil rose towards $56 a barrel on Monday, supported by another shutdown at Libya's largest oilfield, tension over Syria following the US missile strike and signs that an OPEC-led supply cut is helping to clear excess supplies. Libya's Sharara oilfield was shut on Sunday after a group blocked a pipeline linking it to an oil terminal, a Libyan oil source said. The field had only just returned to production, after a week-long stoppage ending in early April. "It means that at least one potential source of additional supply has fallen away for the time being," said Carsten Fritsch of Commerzbank, referring to the Libyan outage. Brent crude LCOc1, the global benchmark, rose 58 cents to $55.82 at 1332 GMT, not far from the one-month high of $56.08 reached on Friday. US crude CLc1 was up 55 cents at $52.79. Oil also climbed on heightened tension in the Middle East, a region that is home to more than a quarter of the world's oil output. Crude rallied last week after the United States fired missiles at a Syrian government air base. "The developments in Syria should be factored in as an additional risk premium in the oil price going forward, especially now that oil inventories are drawing down and the market is no longer in massive surplus," said Bjarne Schieldrop, analyst at SEB. He expects Brent to average $57.50 in the second quarter, "which means we are likely to see $60 printed at times during this period." Oil prices have also been supported by a deal led by the Organization of the Petroleum Exporting Countries to cut output by 1.8 million barrels per day for the first six months of 2017, to get rid of excess supply. Libya, and another OPEC member Nigeria, are exempt from cuts. In a sign of OPEC confidence that the deal is working, Kuwait's oil minister said he expected producers' adherence in March to their supply cut pledges to "be higher than the previous couple of months." The minister, Essam al-Marzouq, also said he saw "positive indications" in the decline of global oil stocks. However, the price rally has been limited, as oil price gains have encouraged production in other countries such as the United States, filling some of the gap left by OPEC-led cuts. US drillers added oil rigs for a 12th straight week, Baker Hughes said on Friday, as energy companies boost spending on new production. Source: http://print.thefinancialexpress-bd.com/2017/04/11/169712

GOVT HOUSE LOAN CEILING TK1CR The interest rates of the loan for Dhaka and Chittagong areas have also been reduced to 9.5%-8.5% from existing 10%-12% The government has doubled its house loan ceiling to Tk1 crore from Tk50 lakh now as construction costs surged in recent years. Finance minister AMA Muhith gave its consent to a proposal of Bangladesh House Building Finance Corporation about the doubling of the loan ceiling.


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The interest rates of the loan for Dhaka and Chittagong areas have also been reduced to 9.5%-8.5% from existing 10%-12%. The BHBFC proposed to lower the interest rates to make it competitive in the market. BHBFC will issue a circular in this regard. Five new house loan products have also been approved. They include home loans for expatriate Bangladeshis, home loans for rural people and farmers, house development and construction of houses. Apartment loans for Dhaka and Chittagong areas will be increased to Tk90 lakh from the existing Tk40 lakh with interest rate reduced to 10% from existing 12%. Home loan ceiling of Tongi and Savar areas and in other divisions and district will be increased to Tk40 lakh from Tk30 lakh, according to the approved summary. Source: http://www.dhakatribune.com/business/2017/04/10/govt-house-loan-ceiling-tk1cr-2/

GOVT MAY FINALISE TK390,771CR AS FY18 BUDGET OUTLAY The size of the current fiscal years budget is Tk3,40,605 crore. Finance Division is preparing next fiscal years budget outlay keeping the figure at Tk3,90,771 crore which is 14.73% higher than the current budget, official sources said. The size of the current fiscal years budget is Tk3,40,605 crore. We are preparing the next budget. The figure will not cross Tk4,00,000 crore, said a Finance Division official involved with the budget preparation. Development projects could be above Tk1,31,000 crore, he said. He said next fiscal years budget outlay and the revenue target may be finalised at the meeting of fiscal coordination council and budget management committee on Thursday. Finance Minister AMA Muhith will preside over the meeting. The meeting will also discuss revenue budget outlay that was earlier fixed at Tk2,36,017 crore. This is 16.13% more than the current fiscals outlay. The revenue collection target by the NBR for the FY2016-17 is Tk2,03,152 crore. AMA Muhith said: We will achieve the revenue target as the new value-added tax system will be strictly implemented from next fiscal year. Local businessmen will be bound to pay VAT as the electronic billing machines are going to be set up in the shops for collection of VAT. The process will be centrally controlled, he said. The government has revised down this fiscal years budget by 7.23%, with the non-development sector taking the hit mostly. The revised budget outlay will be of Tk315,991 crore, according to the finance ministrys documents. The non-development budget will be decreased by about 11% to Tk204,700 crore, despite an increase in government expenditure caused by salary hike of public servants. Source: http://www.dhakatribune.com/business/2017/04/10/govt-may-finalise-tk390771cr-fy18-budget-outlay/

BB PROJECTS OVER 7PC GROWTH BUT REMITTANCE POSES RISK Bangladesh Bank has projected that the growth of the countrys gross domestic product would be more than 7 per cent in the current fiscal year, but a negative growth in inward remittance and a moderate export growth might create downside risks. The central bank made the projection in its quarterly (October-December of FY 2016-17) publication Bangladesh Bank Quarterly. The government has set the GDP growth target at 7.2 per cent for FY17. In FY16, the countrys GDP growth was 7.1 per cent.

http://www.dhakatribune.com/business/2017/04/10/govt-may-finalise-tk390771cr-fy18-budget-outlay/http://www.dhakatribune.com/business/2017/04/10/govt-may-finalise-tk390771cr-fy18-budget-outlay/


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The BBQ publication for the first quarter (July-September) of FY17, however, had projected that the GDP growth would be in 7.1-7.3 per cent range in the current fiscal year. In the second quarter of the FY17, economic activities witnessed a strong growth impulse, stemming mainly from the industry and the service sectors which would help to achieve more than 7 per cent GDP growth, the BBQ said. The large- and medium-scale industries output registered a double digit (13.8 per cent in October, 2017) growth, aided by continued improvement in electricity supply and falling lending rates, it said. Around 22 per cent growth in the number of cargoes handled through the Chittagong port, strong credit growth in the transport sector, and in trade and commerce (18.8 per cent and 11.7 per cent respectively) pointed to a robust growth of the service sector activities. The agriculture sector also remained active, benefiting from benign weather condition and timely availability of agricultural inputs and credits. From the demand side, expected growth of private sector credit and a fresh wave of capital machinery import indicated buoyant domestic demand. The BBQ, however, said that the negative growth in the remittance inflow and a moderate growth in export earnings might have some dampening effect on the domestic demand. The inward remittance decreased by $1.86 billion or 16.86 per cent in the July-March period of FY17 compared with the corresponding period of FY16 as the inflow dropped for the ninth month in a row this FY. The country received $9.19 billion in remittance in July-March of FY17 against $11.05 billion in the same period of FY16. The inward remittance significantly decreased in recent months as a good number of expatriate Bangladeshis sent their money by using illegal hundi channel, according to a BB observation. The current account balance recorded a deficit of $432 million in the second quarter of FY17. The deficit was due largely to the negative growth of remittance inflow and a large deficit in the trade balance even though the trade balance deficit shrank in the second quarter of FY17 from the level of the first quarter of FY17, owing to the low growth of import payments, the publication said. At the same time, low growth of exports was also suggesting weak external demand during the period under review, it said. Countrys export earnings in the July-March period of FY17 increased by 3.97 per cent to $25.94 billion from $24.95 billion in the same period of FY16, the EPB data showed. The movement of money market indicators loosely followed the programme path set in the monetary policy statement (MPS) for the first half of FY17, the BBQ said. Despite a high growth in net foreign asset (18.1 per cent) and a satisfactory growth of private sector credit (15.6 per cent), the broad money (M2) growth (13.8 per cent) remained below the programme path due to the negative growth of credit to the public sector in the second quarter of FY17. The banking sector indicators depicted a mixed picture in the second quarter of FY17 compared with that in the same quarter a fiscal year ago, the BBQ said. Banks capital-risk weighted asset ratio and asset quality (in terms of both gross and net non-performing loans ratios) showed some improvements, while profitability and provision shortfall against classified loans deteriorated during the second quarter of FY17. Source: http://www.newagebd.net/article/13227/bb-projects-over-7pc-growth-but-remittance-poses-risk

http://www.newagebd.net/article/13227/bb-projects-over-7pc-growth-but-remittance-poses-riskhttp://www.newagebd.net/article/13227/bb-projects-over-7pc-growth-but-remittance-poses-risk


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HASINA WOOS INDIAN INVESTORS, ASSURES 100PC PROFIT REPATRIATION Prime minister Sheikh Hasina on Monday wooed Indian business leaders urging them to invest in Bangladesh, particularly in its infrastructure projects, and power and energy, manufacturing and transport sectors. The Indian business community can take full advantage of Bangladeshs steady economic growth, high demographic dividend, cheaper business cost and huge consumer base, she said while addressing the inaugural ceremony of a business event at Hotel Taj Palace. Mentioning that an Indo-Bangla investment agreement is already in place to protect Indian investment, Hasina said, Were providing attractive packages, including 100 per cent repatriation of profit and invested capital. Ministers and state ministers of India and Bangladesh, the president of Chamber of Commerce of India, FBCCI president, other business leaders of both the countries attended the meeting. I hope this event will enable us to reflect on how we want to see the collective future of our two economic communities, Hasina told her audience. Drawing attention of the entrepreneurs that today all are witnessing major political and economic uncertainties, Hasina said, At the same time, were observing the continuation of prosperity and economic gains in Asian countries. Presently, South Asia is recognised as the fastest growing region of the world. In Bangladesh, Hasina said, her government has been equally making significant and economic progress. Were on track to become middle-income Digital Bangladesh by 2021 and a developed country by 2041. She mentioned that PricewaterhouseCoopers in its report titled The World in 2050 has predicted that India will be the worlds 3rd largest economy by 2030, while Bangladesh will be the 29th economy by 2030. Hasina said Bangladesh is currently getting benefits of Generalised System of Preferences from 38 countries of the world, including the EU, Japan, Australia and Canada. You can also avail yourselves of duty- and quota-free benefits extended to Bangladesh from countries such as China, South Korea, Thailand, Malaysia and Chile. Weve a huge market of around 160 million people with 30 per cent of population having the middle-class affordability, the prime minister said. She said Bangladesh has declared to build 100 special economic zones to boost industrialisation and attract foreign investment while some of the economic zones in Mongla, Bheramara and Mirsarai have been exclusively dedicated to Indian investors. Noting that energy security continues to remain an important element of business, she said, Our power generation now has reached 15,726 megawatts. Hasina said Bangladeshs investment in infrastructural development has now risen to $ 6.32 billion and the country needs to invest $ 20 billion annually till 2030 to take the full advantage of high demographic dividend and low labour cost. She said her government has taken up massive infrastructure development projects like the Padma Multipurpose Bridge and Rooppur Nuclear Power Plant, which will significantly change the future of the country. I would urge the Indian investors to consider possible investments in infrastructure projects, power and energy, manufacturing and transport sectors, she said adding, I urge you to take this opportunity to bring your businesses and investments in Bangladesh. The prime minister also mentioned various socio-economic achievements of her government over the last eight years, including achieving GDP growth between 6 and 7 per cent in the past eight years. We expect that the GDP growth will progressively reach to 8 per cent by 2020, she said.


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She said Bangladeshs foreign exchange reserve currently stands at nearly $ 32 billion. Weve received over 2 billion US dollars of FDI and planned to raise the FDI level to 9.6 billion US dollars by 2020. Mentioning that the countrys export earnings reached over $ 34 billion in 2015-16, the PM said, With the increasingly diversified export basket, were planning to enhance annual export earnings to $ 54 billion by 2020. Besides, she said, target has also been set for $5 billion ICT exports by 2021 while per capita income has gone up to $ 1,466. The prime minister, however, came down heavily on BNP for its allegation of selling the country during her India visit. Those who are saying that we have sold our country are just foolish, she said. Pointing to the business community coming from Bangladesh as part of her entourage, she said, Youve seen here whether we have sold the country or achieved something here. Indian minister for Petroleum and Natural Gas Darmendra Pradhan, chairman of Indian conglomerate and former president of the Association of Chambers of India Adi Godrej and incumbent president of Swandeep Jaiodia, president of Bangladesh Chamber of Commerce and Industry Matlub Ahmad and former president of Federation of Indian Chamber of Commerce and Industry Harsh Mariwala, among others, spoke on the occasion. Source: http://www.newagebd.net/article/13228/hasina-woos-indian-investors-assures-100pc-profit-repatriation

STREAMLINE INVESTMENT IN NON-LISTED COS The Bangladesh Securities and Exchange Commission has instructed trustees of all mutual funds to streamline their investment of the funds money in non-listed securities in line with the mutual fund rules. The trustees oversee mutual funds while the asset management companies operate the funds. The capital market regulator gave the instruction after the trustees of the mutual funds submitted data on the MFs investment in non-listed securities. A BSEC official told New Age on Monday that the commission recently issued separate letters to the trustees in this regard. BSECs initial findings suggest a number of mutual funds did not comply with the securities rules in making investment in non-listed securities, he said. Despite the violation, the commission has so far refrained from taking any harsh measure against trustees or asset management companies of the mutual funds so that they can bring down their investment in non-listed securities within the stipulated limit, the BSEC official said. The commission asked the entities to follow the rule number 55 of Securities and Exchange Commission (Mutual Fund) Rules, 2001 in bringing down the investment. The BSEC official said the commission would take its next course of action in this regard based on the next report on the MFs investment. As per the mutual fund rules, closed-end mutual funds are allowed to invest up to 60 per cent of their fund size in listed securities including initial public offering and pre-IPO placement shares. Of the 60 per cent, half of the amount has to be invested in listed securities. In case of investing in non-listed securities, MFs are allowed to invest only in those companies which have got the BSECs approval for issuing pre-IPO placement shares. Closed-end MFs are allowed to invest the rest 40 per cent of their fund size in entities other than capital market instruments including banks and non-bank financial institutions. Investments by MFs in non-listed securities in violation of securities rules first came into light in 2010 when the commission found LR Global Bangladesh Asset Management Company made Tk 46.39 crore investment in non-listed companies from its mutual funds in violation of rules.

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Based on the finding, the commission in 2015 fined LR Global Bangladesh Asset Management Company Tk 50 lakh, Bangladesh General Insurance Company (trustee of LR Global-managed mutual funds) Tk 25 lakh and Hoda Vasi Chowdhury, auditor of LR Global, Tk 5 lakh. The capital market regulator also barred LR Global from forming any fresh fund for one year. Source: http://www.newagebd.net/article/13230/streamline-investment-in-non-listed-cos

CERAMICS GOODS MAKERS SEEK VAT LAW CHANGE FOR LOCAL INDUSTRY PROTECTION Bangladesh Ceramics Wares Manufacturers Association on Monday demanded an increase of supplementary duty on import of ceramics items through amendment of the new Value-Added Tax law to protect the local industry from uneven competition with imported goods. The National Board of Revenue should increase supplementary duty to 60 per cent on import of ceramics items including tiles, table wares and sanitary wares in the new VAT and Supplementary Duty Act-2012 in which the rate of SD was reduced to 45 per cent. Local industry will face a stiff competition with imported ceramics goods after the implementation of the new law from July 1 as the revenue board will reduce the SD on import and increase the duty on local production, BCWMA president Shirajul Islam Mollah said at a pre-budget discussion with the revenue board. In the new VAT law, SD on the locally produced ceramics wares has been increased to 45 per cent from 15 per cent. The new VAT law will affect the local industry in both ways, he said. In addition, under-invoicing has become the major concern for the sector as some unscrupulous traders are selling the imported products at local market at much less price than the cost of production, he added. Price of locally produced ceramics items will increase by 36 per cent compared with that of imported goods due to the change in the SD structure, he said, adding that importers will also get on an average 9 per cent duty benefit. In this context, there is no way without amending the VAT law to protect the local industry in which more than 5 lakh people are directly and indirectly involved, he said. The BCWMA also demanded withdrawal of 15 per cent SD on production of local tiles and withdrawal of all types of customs duty on import of raw materials required for manufacturing of ceramics items. It also sought an increase of minimum import value of the products to prevent under-invoicing. The association secretary general Irfan Uddin said that there were currently 56 factories in the country and the sector experienced 200 per cent growth over the last five years. The association senior vice-president Moynul Islam, also vice-chairman of Monno Ceramics Industries Ltd, said the sector needed government support to grow further. At the meeting, Bangladesh Beverage Manufacturers president Sheikh Shamim Uddin demanded reduction of supplementary duty on production of soft drinks to 15 per cent from existing 25 per cent. He said that reduction of SD would boost the local industry. More than 90 per cent of the domestic demand is now met by the local producers while nine big companies are planning to make investment worth Tk 4,000 crore in next six years, he added. At the meeting, NBR chairman Md Nojibur Rahman said that they would examine the proposal and urged the businesses to pay the tax properly. He also requested the businesses to pay back the tax benefit getting from the government in the form of exemption to the economy and to the welfare of people. Tax benefit to the businesses is one kind of gift of the NBR to the economy and society, he said.

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NBR chief said that the NBR would assess and disclose the data of tax expenditure which is given to businesses and different sectors in the form of tax exemption to support the industrial growth of the country. The tax authority is collecting data as there is currently no statistics on the volume of tax expenditure. NBR members Jahangir Hossain and Parvez Iqbal, among others, spoke at the meeting while deputy commissioners of taxes Nafisa Noor made a presentation on tax expenditure. Source: http://www.newagebd.net/article/13231/ceramics-goods-makers-seek-vat-law-change-for-local-industry-protection

RICE PRICES RISE ON FLASH FLOODS

Rice prices edged up as large millers are cashing in on crop losses, caused by the recent flash floods in the greater Sylhet region, amid depleting stocks from previous harvests and low imports, said traders. In Dhaka, retail prices of coarse rice such as the swarna variety rose to a new level of Tk 40-42 a kilogram now, up 6.49 percent from Tk 37-40 a week ago. Prices of the medium and fine categories of the staple also went up between 1.96 percent and 4.65 percent in the last one week, according to Trading Corporation of Bangladesh. The prices rose in other parts of the country as well. Millers and traders said rice prices typically go up near the end of a season for dwindling stocks. There is a shortage of paddy in the market. The small mills do not have paddy, and neither do the large mills. Those who had paddy might have milled the grain to empty their storages and make space for freshly harvested grains, said Chitta Majumder, managing director of Majumder Group of Industries that operates an auto rice mill. Every year, paddy markets usually get an initial supply from harvests from the haor or seasonal water bodies in the northeastern region. Farmers in the region usually begin to harvest their crops in the third week of April. However, floods in the haor regions have not only affected standing crops and caused losses to growers but also dampened prospects of an early arrival of fresh paddy, said Nirod Boron Saha, a wholesaler in Naogaon, one of the main rice trading hubs in the northwest. We usually rely on supplies from the haor region until harvests in the north begins; it keeps prices stable in the initial days of the harvest season. The haor areas account for nearly 10 percent of the total boro cultivation area at about 48 lakh hectares this year.

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The flood has affected 1.40 lakh hectares of paddy in the fields, according to estimates of the Department of Agricultural Extension (DAE). Saha said speculation over delayed harvest for the bad weather is another reason for the recent price spiral as farmers, small and medium millers and wholesalers do not have paddy stocks. Only large mills have grains now, he said. Bappi Saha, a rice miller from the northeastern district of Netrokona, said, This may be an artificial shortage. The price hike is temporary, he added. The government, for the time being, can reduce the import duty on rice to encourage imports and increase the supply in the market, he said. Rice imports by private traders slumped 65 percent to 76,600 tonnes in July-March of the current fiscal year from the same time last year, after the government hiked the duty from 20 percent to 28 percent to ensure that growers get fair prices for their produce. Boro, one of the three rice crop seasons in a year, accounts for nearly 55 percent of the country's annual rice output of 3.47 crore tonnes. DAE earlier targeted to ensure the production of 1.91 crore tonnes of rice during the current boro season to attain the total output goal of 3.51 crore tonnes for this fiscal year. Rice production in the two crop seasons -- aus and aman -- rose 0.11 percent to nearly 1.58 crore tonnes year-on-year, according to Bangladesh Bureau of Statistics (BBS). Aus output declined but aman production rose, according to the BBS. Source: http://www.thedailystar.net/business/rice-prices-rise-flash-floods-1389394

RETAIL BANKING GROWING FAST Banks are increasingly focusing on retail customers as more and more people are coming under the formal banking channel, a banker said. The retail banking is providing exciting business opportunities to banks which have largely concentrated on the corporate clients, said Nazeem A Choudhury, head of consumer banking at Eastern Bank. The nature of retail banking is changing every day, he said. I believe in the next 10 years the change will be even more exciting. In the past, banks were not much enthusiastic about consumer banking. But the retail banking segment has been changing rapidly over the decade. Banks are now more focused on retail and small business spaces, churning out new products, innovative services and customer engagements, he said. Banks should not only lend funds to the corporate clients, they need to empower the consumers also, he said. We need to focus equally on the two areas. Eastern Bank has rolled out at least 50 new products in the last one decade. It launches five new products every year. Recently, EBL won the Best Retail Bank of Bangladesh title at Singapore-based The Asian Banker's Excellence in Retail Financial Services Awards for the fifth consecutive year. The award has been given to EBL in recognition of the bank's solid growth, adoption of technology and a strong customer-centric strategy. Choudhury attributes the feat to the adaptive and responsive nature of the consumer banking team of the bank. Winning any award is a statement of the good work someone is doing. And when you get it repeatedly, it means you have been able to benchmark your standards and uphold the commitment you have made towards your customers. But rather than being carried away, the bank is now stepping up efforts not only to retain its position but also to offer diversified products and services to the retail banking clients.

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The bank has ventured into new service concepts like priority banking, banking centres for women and students, card-based corporate payment solutions, mobile app for banking services and various lifestyle enhancement programmes. EBL is largely a retail banking focused bank and has invested a lot in digital space in recent years. This year, the bank has brought in small business under the retail banking category, said Choudhury. The bank is working to launch agent banking and mobile banking in the coming months. EBL now has over 500,000 customers. And Choudhury said the bank's focus is not to grow large on customers' numbers. Rather, we want to keep the number steady but we want to grow on their transaction and service level. Whoever becomes EBL's customer they should make EBL as their primary bank of choice for all of their banking needs this is our retail banking aspiration. Choudhury said as the banking has become system and technology-based, interpersonal skills have become a critical factor for a bank to be a good one, particularly in the retail banking segment. Interpersonal skills include how one deals with customers, sources business and deliver services within the shortest possible time, he said. EBL regularly organises trainings on interpersonal skills, motivation and behavioural training to develop the soft skills of its employees, according to Choudhury. The bank is not that large when it comes to the number of branches or customers. But when it comes to profitability, efficiency and market reputation, EBL is one of the top private banks in the country. He said the banking sector has failed to keep pace with the growth of the population of the country; only 20-30 percent people have access to formal banking services. The rest has remained out of the formal financial service, which has brought about the idea of financial inclusion. Both the central bank and banks are working on the issue. Instead of working independently, banking and mobile banking should work together to take financial services to the masses, according to Choudhury. The banker lauded the central bank's role for the growth of retail banking. To verify a customer's authenticity and creditworthiness, the banking sector stands on a strong footing thanks to the access to the central bank's Credit Information Bureau and the Election Commission's national ID database. Thanks to these accesses, the non-performing loans will gradually go down, he said. NPL always stands at low level in case of consumer banking, and it stood at below 1 percent last year for Eastern Bank, he said. Service holders form the client base of the retail banking at the bank. The interest rate on personal loans stands at around 11 percent at the bank, Choudhury said. Industry-wide, the retail banking sector is growing at 20 percent annually on an average. The bank is hiring more and more women as employees to serve the growing army of female women clients. At present, 20 percent of the bank's staff is female. Currently, one-third of loans of EBL go to retail banking clients while corporate clients account for 70 percent. EBL has 83 branches and opens two branches every year. Its 11 branches offer priority banking services to high net worth clients. Choudhury said a good retail bank needs a lot of commitment from the top management and the board of directors. We are indeed fortunate to have a CEO and board of directors who are friendly to retail banking. Source: http://www.thedailystar.net/business/retail-banking-growing-fast-1389346

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