10-08-16

IDLC Investments, a wholly owned subsidiary of the IDLC Finance, Tuesday formally
launched the country's first ever portfolio management product "Easy Invest" to ensure
better returns from the listed blue chip stocks.
Country's overall economic situation was positive in the immediate-past financial year
and it would even be better in the first quarter (Q1) of the current fiscal, says a leading
business body, The Metropolitan Chamber of Commerce and Industry (MCCI), Dhaka.
The country's exports and imports are expected to rise during the first quarter of the
current fiscal year (2016-17), according to a projection of MCCI.
The country's capital market remained almost at the same state with no significant
improvement or deterioration during the immediate-past fiscal year (FY16), despite
several market supportive measures taken after market debacle.
11-08-16
The government's revenue earnings from the premier bourse fell 16 per cent year-on-year
in July. "A bearish trend in the capital market affected the government's earnings from the
stock trading as the trading volume was on the decline," said an official of the premier
bourse. "The earnings are related to turnover. It's usual that tax will fall if turnover
declines," said an analyst at a leading brokerage firm.
The United States uses the Generalised System of Preference (GSP) to provide for dutyfree entry into the US market for some 5,000 products of 122 countries. All member
states of the South Asian Association for Regional Cooperation (SAARC), barring
Bangladesh, are now entitled to GSP. The validity of GSP for Bangladesh ended on June
30, 2013. Due to the Rana Plaza factory building collapse and the Tazreen Fashions fire
that killed more than 1,200 workers.
Demographic Dividend (DD) means, "The economic growth potential that can result
from shifts in a population's age structure, mainly when the share of the working-age
population (15 to 64) is larger than the non-working-age share of the population (14 and
younger, and 65 and older)." Bangladesh has already entered into the period of DD as 66
per cent of its population is in the workforce bracket.
Economics science measures money in terms of monetary aggregates which are
symbolically written as M1, or narrow money and M2 or broad money consists of cash in
hand, money in bank's current account and also in time deposits. Now-a-days, there are
other measures of monetary aggregates, like M3 etc. Hoarded money is idle money.
12-08-16
Stocks closed slightly higher Thursday with the turnover hitting Tk 5.0 billion-mark after
eight sessions as enthusiastic investors injected fresh funds into the stocks amid
optimism. The DSEX, the prime index of the Dhaka Stock Exchange (DSE), closed at
4,574.36, advancing 5.07 points or 0.11 per cent over the previous day due to
expectations about upcoming declarations of earnings. Top ten companies on the turnover
list captured on Thursday more than 25 per cent of transactions on the country's premier
bourse DSE with Bangladesh Steel Rerolling Mills (BSRM) topping the chart.
Although the govt. targeted 7.5 per cent GDP growth it attained 7.02 per cent. The
inflation rate has come down to 5.4 per cent. In the recently announced monetary policy

statement (MPS) the repo and reverse repo rates remain at 6.75 and 4.75 per cent
respectively. Anticipating a winding down of this dependence on national savings
certificates by the government the MPS has prudently fixed a target of 11.90 per cent of
credit growth in public sector and 16.60 per cent in private sector during the current
fiscal.
Country's export earnings in the first month of the current fiscal year fell short of the
month's target by 24.93% by official count. Total export earnings stood at $2.53 billion in
July against targeted $3.37 billion, according to Export Promotion Bureau (EPB) data
released Thursday. The export earnings also declined by 3.49 per cent compared to $2.62
billion earned in July 2015.
The rescheduling and subsequent writing off of loans is a new way in Bangladesh to loot
public money. Rescheduled loans have created concern for the credit-risk management of
the entire banking industry. Under the present provision, Bangladesh Bank can break up
the board of any private bank, but not that of a state-owned one. Now it is suggested
giving the central bank "this authority" over the public banks, too. Banks should allow
rescheduling facility based on future cash flow and repayment ability of the borrower
rather than using rescheduling as a stimulating instrument of non-performing loan
management.
13-08-16
The central bank is set to bar banks from giving guarantee for commercial papers (CPs)
to avert possible risks involving such money-market hotcakes. However, the commercial
banks may be allowed to invest in the CPs for enhancing credits to CP-issuers by acting
as an issuing and paying agent (IPA). IPA means a bank that delivers CPs to the investors
against the proof of payment and at maturity repays the investors after receiving funds
from the issuer. Non-banking financial institutions (NBFIs) are now allowed to issue CP
for meeting their liquidity requirements. Commercial paper is defined as a secured or
unsecured promissory note which has an original maturity between minimum seven days
and a maximum of one year. The CP is a short-term money-market security issued or sold
by usually large corporate entities for funding operating expenses as well as current assets
such as account receivables and inventories.
India now pays Tk 192.22 as transit fee to Bangladesh for each tonne of goods. They are
also going to give transit facility to Bangladesh to export products to Nepal. The
government moves to upgrade Banglabandha Land Port (BLP) to facilitate smooth
loading and unloading of goods for shipment to Nepal on transit route through India.
Nepal is a high-growth market for Bangladeshi companies mainly because of its touristcentric economy of the Himalayan kingdom-turned republic. On average, products worth
over US$2.20 million are being exported to Nepal monthly.
Last year, Bangladesh received US$ 15.80 billion in remittances from its overseas class
and the World Bank said it is now the 8th largest remittance recipient country in the
world.
Stocks posted a marginal fall last week that ended Thursday, after remaining upbeat in the
previous week, as risk-averse investors opted for quick-profit on sector specific stocks.
Analysts said the market faced a mild correction as a section of investors booked shortterm profit on stocks that saw significant gain in the week before, while some were busy
in rebalancing portfolio amid earnings expectation. As investors were cautious for
investing fresh funds and continued to take profit from recent rallied stocks, the large-cap
stocks became slow over the week. Investors decided to book quick-gain over the recent

price hike in shares, which triggered the market to close in negative territory. However
the daily turnover averaged Tk 4.64 billion, registering an increase of 4.60 per cent over
the previous week's average of Tk 4.43 billion.
In only one month--February this year--sales of pharmaceuticals abroad went up by 16.34
per cent to $54.75 million. There has been a growing demand for Bangladeshi medicines
in Southeast Asia, Asia Pacific and Africa. The first consignment of medicine for the US
market is indeed a positive pointer to the country's huge success in pharmaceutical
exports.
Financial inclusion is the access to the range of financial services at a reasonable cost for
the bankable people and farms. Basic financial services include savings, short- and longterm credit, insurance, pensions, payments, leasing and factoring, mortgages, local money
transfers and international remittances. 5A's are key to FI: Availability, Awareness,
Accessibility, Affordability & Adequacy. For actual implementation of FI commitments,
Bangladesh requires unbanked people to have access to an array of innovative and
customised financial services that provide them opportunity for saving, credit, insurance
and other forms of payments (G2P, P2G, B2C, C2B etc.).
The government has initiated a move to revise the 'One House One Farm' project again
for the 3rd time with raising its cost by 176.44 per cent or by around Tk 55.80 billion (Tk
5,580.68 crore), reports UNB. The main operations under the proposed 3rd revision will
be conducting initial surveys and making database, creating village development
organisations, turning at least 60 families of some 40,950 villages into the centre of
economic activities, capital formation and extending credit facilities, imparting training
on various issues alongside providing technical assistance to the field extension workers
and to the beneficiaries to boost their skills, imparting training on setting up solar panels
and bio gas plants, setting up exhibition farms and marketing the produces of the
beneficiaries through cooperatives.
14-08-16
The tax authority has set a lower corporate tax collection target for the current fiscal year,
compared to that of the last year, in view of the last year's slim growth of operating profit
of the private commercial banks (PCBs).
The engineering sector posted the highest gain of 4.25 per cent amid the mixed
performance showed by large cap sectors in five trading sessions of last week. Most of
the companies of the engineering sector witnessed price hikes on the Dhaka Stock
Exchange (DSE). The premier bourse passed the last week through flat movements and
many of the major sectors such as telecommunication, power, pharmaceuticals and food
lost prices.
The lifting of ban on recruitment of Bangladeshi workers by the Kingdom of Saudi
Arabia (KSA) is a piece of good news for which the country has been eagerly waiting for
long. The government tried hard in all manners for the last seven years to effect a changeof-mind in Saudi authorities.
Natural gas is becoming scarce, and more valuable. Therefore, it should be used for more
selective and productive purposes than mere household consumption like cooking.
Instead, the government is promoting the use of Liquefied Petroleum Gas as an
alternative at the household level. The government has already moved to set up country's
first LNG terminal in Cox's Bazar and also constructing a second LNG terminal to
accelerate the import of LNG.

15-08-16
The Dhaka bourse Sunday ended the week's first session with a marginal rise in broad
index, although the turnover declined following less participation from the investors. On
the day, the flat movement of previous week was almost reflected on the Dhaka Stock
Exchange (DSE) because of mixed performances showed by the major sectors. The
market started the session with a positive mood and continued the optimism for an hour.
Stocks see marginal rise on prime bourse. Soon later, the market failed to continue the
enthusiasm and the DSE broad index DSEX ended flat in green through ups and downs.
At the end of the session, the DSE broad index DSEX closed at 4577.08 points with
posted a gain of 2.72 points.
The concept of financial inclusion (FI) has gained increasing importance since the early
2000s when a direct correlation between financial inclusion and poverty reduction was
uncovered. Access to a well-functioning financial system can economically and socially
empower individuals, particularly the poor and the disadvantaged people. Benefits of FI
go beyond individuals. Greater accesses to financial services for individuals as well as
firms strengthen the prospects of reducing income inequality and accelerating economic
growth. Today, FI is an integral part of mainstream thinking on economic development.
Bangladesh's central bank says it is withholding findings of investigations into the cyber
theft of $US81 million to avoid tipping off the "foreign perpetrators" of the hack, reports
Reuters. Bangladesh Bank lawyer Ajmalul Hossain was responding to comments by Rizal
Commercial Banking Corp (RCBC) in the Philippines - through which the stolen money
was routed before disappearing into Manila's casino industry - that the central bank in
Dhaka was wary of releasing reports that could implicate its own officials. More than six
months have passed since hackers broke into the Bangladesh central bank's computer
systems in one of the biggest-ever cyber heists. Most of the $US81 million stolen is still
missing and the culprits have not been identified, but Bangladesh Bank has held RCBC
accountable for the loss. It has said it may sue RCBC if other efforts to recover the
money are unsuccessful.
16-08-16
The central bank has expressed its reservation over borrowing from the World Bank's
newly introduced costly 'scale-up facility' fund, fearing mismatch with the local financial
market. BB balks at borrowing costly new credit. Ministry of Finance (MoF) officials
said Monday the Bangladesh Bank (BB) had recently in writing communicated to the
MoF its observations regarding the WB-assured US$350 million credit for the proposed
'investment promotion and financing facility project-II (IPFF-II)'. Earlier, following WB's
repeated persuasion on its lending proposal from the scale-up facility (SUF), the
government replied in the positive.
Government's revenue authority has amended the tax-card policy to widen the scope of
honouring greater number of taxpayers as tax VIPs at national level. Officials said the
National Board of Revenue (NBR) amended the policy in principle and it would now
require approval by government higher authority to be implemented. A high-powered
committee, comprising income tax officials, prepared draft the 'National Tax Card Policy
2010 (amended)' with these provisions. The amended policy is expected to be introduced

next fiscal year.

The researchers came to the conclusion that microfinance has contributed in the range of
8.9-11.9 per cent to the GDP and 12.6-16.6 to the rural GDP (assuming rural GDP is 60
per cent of total GDP). This contribution has two parts: (a) a direct effect of producing
goods and services where microcredit is used for productive purposes for welfare of
recipient households and (b) an indirect general equilibrium effect on the rest of the nonrecipient actors. The latter effect is channeled through changing the prices of labour and
capital. For example, by adding to the capital stock, it is viewed that microfinance first
brings down the effective price of capital. With the passage of time and as producers
substitute cheaper capital for labour, the effective price of labour also falls. "Both
reductions then reduce the cost of production in all sectors of the economy, albeit to a
varying degree which then stimulates more production of goods and services".
The MFS is now a mainstream service in most of the countries and all the stakeholders
(regulators, MNOs, banks) and other partners (organisations, merchants etc.) have to
work together to provide a future-proof operating model that will not only include
financially excluded masses but also make the business models sustainable. The success
of MFS models depends on both MNOs and banks. These two industries have their own
set of strengths and weaknesses. By partnering and working together, they can bring a
win-win synergy. This can help customers with convenient, affordable and secure MFS.
The regulators' role here should be for ensuring convenience, security, compliance and a
level playing field as well as an enabling competition. All these will, in turn, will take
care of the rest.
17-08-16
Higher capital requirement to meet Basel-III obligation and the deadweight of classified
loans have resulted in capital shortfall in eight banks and substantial erosion in the
surplus capital of 48 others. "The capital surplus of banks may fall further if the banks
fail to earn a good profit in the coming years," a senior official of the Bangladesh Bank
(BB) told the FE Tuesday. In that case, the banks have mainly two options - sponsors
have to inject more capital or banks have to retain their profits in the form of retained
earnings or issuing stock dividend and also issuing rights shares - for complying with the
Basel-III capital requirement.
As a collaboration between government and one or more private sector companies, PPP
provides a public service or implement a project that involves substantial financial,
technical and operational risks. In some types of PPPs, the cost of using a service is borne
exclusively by users of the service and not by taxpayer. In other types, investment is
made by the private sector on the basis of a contract with government to provide agreed
services and the cost of providing the services is borne wholly or in part by the
government. Government contributions to a PPP may also be in kind (notably through
transfer of existing assets). In projects that are aimed at creating public goods, as in the
infrastructure sector, the government may provide a capital subsidy in the form of a onetime grant, so as to make it more attractive to private investors. In some other cases, the
government may support the project by providing revenue subsidies, including tax breaks
or by removing guaranteed annual revenues for a fixed time period.
Net sales of savings instruments hit a record high in fiscal 2015-16, as investors were
lured in by interest rates which are 5 percentage points higher than those offered by
commercial banks on term deposits. If the trend continues, money will flow out of bank
deposits and end up in savings schemes, shooting the government's interest liability up,
said a senior Bangladesh Bank official.

The revenue authority sticks to its decision to levy both VAT and income tax on banks'
commission against sales of government savings tools despite the central bank's
disagreement over such 'double taxation'. Officials said the Value Added Tax (VAT) wing
of the National Board of Revenue (NBR) recently clarified its stand following objection
raised by the Bangladesh Bank.
Stock brokers and dealers with minimum paid-up capital of Tk 50 crore will be allowed
to play the role of a market maker -- an effort to keep the secondary market stable. fter
receiving the regulatory permission, one can act as a market maker for a maximum of
three authorised securities, according to a draft of market-maker rules recently approved
by Bangladesh Securities and Exchange Commission. However, the net portfolio
investment of a market maker can never exceed five times its net worth, according to the
proposed rules. A significant part of the draft rules is that a market maker will be allowed
to go for short sale of shares, which is now prohibited by the regulator. A market maker
can make short-selling up to 20 percent of its total sales on particular securities on a day,
according to the draft rules. No market maker will be allowed to borrow 10 percent or
more shares from the issuer, employee or other shareholders of the authorised securities.
The stocks exchanges will set procedures for automatic settlement and execution of short
selling of securities done by the market. The licensing period for a market will be one
year, and it can be renewed every year upon fulfilling the regulatory requirements. The
regulator can also scrap or suspend the licence of a market maker anytime on legal
grounds.