Daily News Flash: 21st May 2020

Contents
GLOBAL NEWS ................................................................................................................................... 1
CHINA LIKELY NOT TO SET NUMERICAL GDP GROWTH TARGET: GT POLL ............................................. 1
RBI MAY NEED TO AGGRESSIVELY CUT RATES ALONGSIDE FISCAL STIMULUS, SAY ECONOMISTS ......... 1
ASIAN STOCKS ADRIFT AS VACCINE RALLY FALTERS .............................................................................. 1
MACRO ECONOMY ........................................................................................................................... 1
NEEDED: STIMULUS PACKAGES WORTH 6PC OF GDP ........................................................................... 1
PANDEMIC WILL CHANGE THE AVIATION INDUSTRY FOREVER ............................................................. 2
BANGLADESH EYES FDI BOOM IN THE POST-PANDEMIC ERA ............................................................... 2
PERHAPS A ROLLING BUDGET CAN GIVE MORE LEEWAY TO FIGHT PANDEMIC .................................... 2
GOVT FOCUSES ON INCENTIVE PLAN TO ATTRACT RELOCATING BUSINESSES ....................................... 2
VIRUS THROWS 22.9PC INTO POVERTY: SURVEY .................................................................................. 3
CALL RATE STABLE BEFORE EID AMID BB'S SUPPORT ........................................................................... 3
CHINA-BACKED AIIB APPROVES $250 MILLION LOAN FOR BANGLADESH'S COVID-19 RESPONSE .......... 3
POWERFUL POLICYMAKERS HIGHLIGHT BARRIERS TO FDI .................................................................... 4
GOVT TO PROVIDE CAPITAL SUPPORT FOR JOBLESS EXPATS ................................................................ 4
BANGLADESH LOOKS TO LURE COMPANIES LEAVING CHINA ................................................................ 4
BANK..................................................................................................................................................... 4
MERCANTILE BANK TO START ISLAMIC BANKING OPERATIONS SOON .................................................. 4
FINANCIAL INSTITUTIONS ............................................................................................................. 4
NBFIS’ BORROWERS MISS OUT ON INTEREST PAYMENT SUSPENSION .................................................. 4
FOOD & ALLIED ................................................................................................................................. 5
INDUSTRIES MINISTRY AGAINST TOBACCO BAN DURING PANDEMIC ................................................... 5
PHARMACEUTICALS & CHEMICALS ........................................................................................... 5
MARICO’S PRODUCT DIVERSIFICATION MARCH CONTINUES ................................................................ 5
CAPITAL MARKET ............................................................................................................................ 5
BSEC GETS TWO NEW COMMISSIONERS .............................................................................................. 5
IPO SUBSCRIPTION OF EXPRESS INSURANCE DELAYED FURTHER .......................................................... 5
GLOBAL NEWS

CHINA LIKELY NOT TO SET NUMERICAL GDP GROWTH TARGET: GT POLL

 One of the most closely watched aspects of China's two sessions each year is the release of the
official target for GDP growth, a reliable indicator of where the world's second-largest economy
is headed.
 However, this might change this year, as the country continues to grapple with rising risks for
the economy amid the global COVID-19 pandemic and seeks to balance in a slew of policy
priorities, according to a Global Times survey on Tuesday.
 More former officials as well as top economists believe that senior Chinese officials will not
release a specific numerical growth target for this year during the upcoming two sessions,
although some still believe that one might still be released to better coordinate policies, the GT
survey showed.
Source: https://thefinancialexpress.com.bd/economy/china-likely-not-to-set-numerical-gdp-growth-target-gt-poll-1589970362

RBI MAY NEED TO AGGRESSIVELY CUT RATES ALONGSIDE FISCAL STIMULUS, SAY ECONOMISTS
 The Indian government’s frugal economic stimulus package has put pressure on the Reserve
Bank of India (RBI) to intervene, as analysts and economists say measures announced so far are
unlikely to have any meaningful impact soon.
 The Indian government’s 266 billion US dollar economic rescue package outlined last week rests
largely on boosting company credit for micro, small and medium enterprises (MSMEs), but it
had scant new public spending, tax breaks or cash support to revive demand, reports Reuters.
 “The cumulative government measures will help partly ease the cash squeeze felt by MSMEs in
the immediate term to help them bide time, but not fully resolve the current demand shock in
the face of the coronavirus,” said DBS economist Radhika Rao. “With disinflation set to
dominate, the RBI and policy committee will have the headroom to assume a growth-supportive
stance.”
Source: https://thefinancialexpress.com.bd/economy/rbi-may-need-to-aggressively-cut-rates-alongside-fiscal-stimulus-say-
economists-1589969748

ASIAN STOCKS ADRIFT AS VACCINE RALLY FALTERS

 Asian stocks struggled to extend the week’s rally on Wednesday and gold and bonds firmed as a
sceptical press report dented some hopes for a COVID-19 vaccine and concerns about bumps in
the global recovery from the pandemic returned.
 MSCI’s broadest index of Asia-Pacific shares outside Japan was flat. The risk-sensitive Australian
dollar retreated from an overnight two-month high and safe-haven demand drove US Treasury
yields back under 0.7 per cent.
 The moves follow a downbeat end to the day on Wall Street, after a report from medical news
website STAT cast doubt over positive early results from a Moderna Inc COVID-19 vaccine trial.
The report said the results, which had rallied global stocks this week, lacked detail.
Source: https://thefinancialexpress.com.bd/stock/asian-stocks-adrift-as-vaccine-rally-falters-1589951900

MACRO ECONOMY

NEEDED: STIMULUS PACKAGES WORTH 6PC OF GDP

 Bangladesh needs to spend Tk 10,085 crore per month to support the poor and the newly poor
struggling to survive amid the coronavirus pandemic, suggested a new study.

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  Due to the income shock emanating from the pandemic, 77.2 per cent of the vulnerable non-
poor fell below the poverty line, said the survey report styled "Livelihoods, Coping, and Support
during COVID-19 Crisis".
 This would imply that beyond the 20.5 per cent of the population officially recognised as poor
there is a group of 'new poor' representing an additional 22.9 per cent of the population that
needed to be brought within the discussion on poverty.
Source: https://www.thedailystar.net/business/news/needed-stimulus-packages-worth-6pc-gdp-1904635

PANDEMIC WILL CHANGE THE AVIATION INDUSTRY FOREVER

 The global coronavirus pandemic will leave a long-lasting stain on the aviation sector, said a top
official of Regent Airways, a domestic private carrier.
 "The impact on the aviation industry is unprecedented and it has happened suddenly," Salman
Habib, deputy managing director of the private local carrier, told The Daily Star in an interview
recently.
 Governments around the world have imposed restrictions on air travel, while most countries
have banned international and domestic commercial flights altogether to flatten the curve on
the rogue virus.
Source: https://www.thedailystar.net/business/news/pandemic-will-change-the-aviation-industry-forever-1904584

BANGLADESH EYES FDI BOOM IN THE POST-PANDEMIC ERA

 Bangladesh expects a bigger inflow of foreign direct investment in the days to come as different
nations plan to relocate their factories to countries like Bangladesh to bring down cost amid a
cash crunch caused by the pandemic, said Commerce Minister Tipu Munshi yesterday.
 In 2019, the country saw net inflows of foreign direct investment amounting to $2.88 billion,
down about 20 per cent from a year earlier, according to data from the Bangladesh Bank.
 "We should remain prepared to grab the opportunity as Japan, China, Vietnam, India and
Indonesia have already started moving their production lines elsewhere," Munshi said at his
ministry's regular consultative meeting on investment at the secretariat in Dhaka.
Source: https://www.thedailystar.net/business/news/bangladesh-eyes-fdi-boom-the-post-pandemic-era-1904614

PERHAPS A ROLLING BUDGET CAN GIVE MORE LEEWAY TO FIGHT PANDEMIC

 Making the budget for next fiscal year in this time of pandemic will most likely be the most
challenging task shouldered by a finance minister yet.
 The crisis is unprecedented in nature, with little scope of drawing lessons from the past. Even
after several weeks of countrywide shutdown measures, the infection rate remains unabated
and is actually rising. It has already taken its heavy toll on economic activities, the actual cost of
which is not yet known.
 The export outlook remains unusually depressed for the coming months. In April, exports
earnings were $563 million, down 82.9 per cent from a year earlier. Remittance hit a 34-month
low of $1.08 billion in April, down 25 per cent from a year earlier. And its outlook is extremely
clouded, too.
Source: https://www.thedailystar.net/business/news/perhaps-rolling-budget-can-give-more-leeway-fight-pandemic-1904590

GOVT FOCUSES ON INCENTIVE PLAN TO ATTRACT RELOCATING BUSINESSES

 The government has decided to devise a strategic plan on incentives and other benefits to be
offered to prospective foreign investors who will relocate their businesses to Bangladesh in the
post-Covid-19 period.

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  A taskforce will also be formed to deal with the incentive issues, especially in the
implementation stage, so that the investors do not feel offended when they come here
practically.
 Briefing the media after the meeting, the commerce minister said that due to the adverse
impacts of coronavirus pandemic, many big companies would relocate their factories to those
countries where the cost of doing business was low.
Source: https://today.thefinancialexpress.com.bd/first-page/govt-focuses-on-incentive-plan-to-attract-relocating-businesses-
1589997491

VIRUS THROWS 22.9PC INTO POVERTY: SURVEY

 The Covid-19 pandemic has pushed 22.9 per cent people of the country below poverty line apart
from officially- recognised 20.5 per cent existing poor, according to a rapid survey report.
 The report styled "Livelihoods, Coping and Support during COVID-19 Crisis" recommended that
over 43 per cent of the country's population, summation of recognised poor and "new poor",
require Tk 100 billion fiscal package to survive the pandemic.
 The survey revealed that due to income shock occasioned by Covid-19, 77.2 per cent vulnerable
non-poor, who were not recognised as poor officially before Covid-19, fell below the poverty
line in rural area.
Source: https://today.thefinancialexpress.com.bd/last-page/virus-throws-229pc-into-poverty-survey-1589997799

CALL RATE STABLE BEFORE EID AMID BB'S SUPPORT

 The inter-bank call money rate remained almost stable on Wednesday, the last working day
before the Eid vacation, despite higher cash withdrawal from banks, bankers said.
 The weighted average rate (WAR) on call money rose to 4.99 per cent on the day from 4.95 per
cent a week ago. It was also 4.99 per cent on Tuesday, according to the central bank's latest
statistics.
 The volume of transactions in the inter-bank call money market came down to Tk 75 billion on
Wednesday from Tk 96.62 billion of the previous working day, the official figures showed.
 The call money rate remained unchanged from the previous level on the day, and ranged
between 4.25 per cent and 5.00 per cent.
Source: https://today.thefinancialexpress.com.bd/last-page/call-rate-stable-before-eid-amid-bbs-support-1589997676

CHINA-BACKED AIIB APPROVES $250 MILLION LOAN FOR BANGLADESH'S COVID-19 RESPONSE
 Beijing-backed Asian Infrastructure Investment Bank (AIIB) said on Thursday it had approved a
$250 million loan to Bangladesh to help the country cope with the coronavirus pandemic.
 The project, which will be cofinanced by the Asian Development Bank, is intended to help the
government with budget support to help the country's most vulnerable, according to a
statement. It is intended to strengthen social safety nets and mitigate the effects of job losses in
small and medium sized companies and the informal economy.
 The loan is part of a $10 billion funding facility the AIIB has announced to help public and private
sector entities deal with the pandemic.
Source: https://tbsnews.net/economy/china-backed-aiib-approves-250-million-loan-bangladeshs-covid-19-response-83896

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POWERFUL POLICYMAKERS HIGHLIGHT BARRIERS TO FDI
 Three senior ministers and an adviser to the prime minister, on Wednesday, highlighted some
major bottlenecks they believe must be resolved for Bangladesh to attract a share of the
factories relocating from China.
 They made the observations at a virtual meeting of an advisory committee to facilitate business
– with Commerce Minister Tipu Munshi in the chair.
 Senior business leaders who attended the meeting echoed the government policymakers
regarding bringing foreign direct investment (FDI) into the country.
Source: https://tbsnews.net/economy/trade/powerful-policymakers-highlight-barriers-fdi-83827

GOVT TO PROVIDE CAPITAL SUPPORT FOR JOBLESS EXPATS

 The government has taken an initiative to create a fund for Bangladeshi workers abroad so that
they can do businesses in those countries.
 The "Covid-19 Recovery and Response Fund" will help Bangladeshi expatriates to counteract the
coronavirus fallout instead of returning home empty-handed, said the Ministry of Foreign
Affairs.
 Foreign Minister Dr AK Abdul Momen on Wednesday said Bangladeshi expatriates who lost their
jobs during the pandemic will be able to apply for loans ranging from Tk5 to Tk7 lakh from the
account.
Source: https://tbsnews.net/economy/govt-provide-capital-support-jobless-expats-83812

BANGLADESH LOOKS TO LURE COMPANIES LEAVING CHINA

 Bangladesh is going to form a taskforce to make a strategic plan on "how to attract the
companies, which are leaving from China," to invest here.
 "Many factories are moving out of China. Indonesia, India and Vietnam have already offered
several packages luring the companies to invest in their countries," said Commerce Minister
Tipu Munshi in a meeting at the Secretariat office in the capital today.
 "We will make a plan to attract the companies, after reviewing the offers of other countries,"
the minister added.
Source: https://tbsnews.net/economy/trade/bangladesh-looks-lure-companies-leaving-china-83590

BANK

MERCANTILE BANK TO START ISLAMIC BANKING OPERATIONS SOON

 The Mercantile Bank has decided to commence its Islamic banking window operations at the
earliest in the name of "Taqwa" at the first meeting of the bank's Shariah Supervisory
Committee held on Sunday, says a press release.
 Morshed Alam, chairman of Shariah Supervisory Committee and board of directors of the bank,
presided over the meeting arranged at the bank's headquarters in Dilkusha in the capital.
Source: https://tbsnews.net/economy/banking/mercantile-bank-start-islamic-banking-operations-soon-83800

FINANCIAL INSTITUTIONS

NBFIS’ BORROWERS MISS OUT ON INTEREST PAYMENT SUSPENSION

 People who have taken loans from banks are currently enjoying two months interest suspension
as they are facing trouble over the coronavirus pandemic, but some 75,000 clients of non-bank
financial institutions (NBFIs) are missing out on this facility.

4
  The Bangladesh Bank on May 3 brought great relief to borrowers when it ordered banks to
suspend interest on all loans for two months till May.
 But the central bank did not extend this facility to NBFIs because they find that non-bank
lenders have to rely heavily on interest for their income as they have no other options like
commission, charges, and different type of fees that banks charge their customers.
Source: https://tbsnews.net/economy/banking/nbfis-borrowers-miss-out-interest-payment-suspension-83833

FOOD & ALLIED

INDUSTRIES MINISTRY AGAINST TOBACCO BAN DURING PANDEMIC

 The Ministry of Industries has said that it is not in favour of banning tobacco-related products
during this coronavirus pandemic.
 The ministry cleared its stance on the issue in a press statement issued on Wednesday.
 It said that various agencies have published reports on banning tobacco products in the country
quoting Industries Minister Nurul Mazid Muhammad Humayun, which had caught the ministry's
attention and led it to issue the press statement.
 During the early stages of the coronavirus shutdown, in response to applications from two
tobacco companies, the ministry sent two official letters on April 3 and 5, requesting the
authorities concerned to provide necessary assistance to the companies.
Source: https://tbsnews.net/economy/trade/industries-ministry-not-favor-banning-tobacco-during-covid-19-pandemic-83548

PHARMACEUTICALS & CHEMICALS

MARICO’S PRODUCT DIVERSIFICATION MARCH CONTINUES

 Marico Bangladesh pursuit of product diversification in the personal grooming category
continues, with the fast-moving consumer goods company now rolling out a shampoo.
 Called Parachute Naturale Shampoo, it comes in three variants -- nourishing care, damage repair
and anti-hair fall -- in 6ml sachets and 170ml and 340ml bottles.
 The sachets are priced at Tk 2, and the bottles Tk 185 and Tk 320 respectively.
Source: https://www.thedailystar.net/business/news/maricos-product-diversification-march-continues-1904626

CAPITAL MARKET

BSEC GETS TWO NEW COMMISSIONERS

 The government on Wednesday appointed professors Mizanur Rahman and Shaikh Shamsuddin
Ahmed as commissioners of the Bangladesh Securities and Exchange Commission for the next
four years. The Financial Institutions Division of the finance ministry issued a notice in this
regard on the day.
 Mizanur is a professor of the accounting and information systems department and Shamsuddin
a professor of the finance department of Dhaka University. Prior to the appointment,
Shamsuddin served as a director of Janata Bank The government will appoint another
commissioner to the commission soon after the Eid holidays..
Source: https://www.newagebd.net/article/106864/bsec-gets-two-new-commissioners

IPO SUBSCRIPTION OF EXPRESS INSURANCE DELAYED FURTHER

 The public subscription for Express Insurance shares has been delayed further as the stock
market remained shut in line with the government holidays.

5
  The government has extended the ongoing shutdown until May 30 as the deadly virus goes
virulent.
 The non-life insurer will raise a fund worth Tk 260.79 million from the capital market using the
fixed price method.
 The initial public offering (IPO) subscription for shares of the company by the eligible investors
through electronic subscription system was supposed to begin on April 13 and close on April 20.
The company officials said IPO subscription has been suspended as the government extended
the general holiday until 30 May.
Source: https://today.thefinancialexpress.com.bd/stock-corporate/ipo-subscription-of-express-insurance-delayed-further-
1589989595

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