Daily News Flash: 20th May 2020

Contents
GLOBAL NEWS ................................................................................................................................... 1
CORONAVIRUS CRUSHES ASIA’S GARMENT INDUSTRY ......................................................................... 1
NASDAQ TO TIGHTEN LISTING RULES, RESTRICTING CHINESE IPOS ...................................................... 1
OIL PRICES EASE ON DIM ECONOMIC OUTLOOK DESPITE SIGNS OF FIRMER DEMAND ......................... 1
ASIA STOCKS UNDER PRESSURE AS VACCINE RALLY FALTERS ............................................................... 1
MACRO ECONOMY ........................................................................................................................... 2
BANGLADESH BANK SIGNS DEALS WITH 44 BANKS OVER STIMULUS LOAN REFINANCING .................... 2
FBCCI FORMS SECTOR-WISE COUNCILS TO HELP BUSINESSES BORROW FROM STIMULUS PACKAGES .. 2
ABOUT TIME CONSTRUCTION SECTOR RESTARTS IN PHASES: EXPERTS ................................................ 2
HEALTH SECTOR GETS BIGGEST BUMP UP IN NEXT YEAR’S DEVELOPMENT BUDGET ............................ 3
SPENDING HITS FOUR-YEAR LOW ........................................................................................................ 3
‘RESURGENT BANGLADESH’ LAUNCHED TO HELP PRIVATE SECTOR RECOVER ...................................... 3
TELECOMMUNICATION .................................................................................................................. 3
BTRC, GP NOW SEE SOLUTION IN TALKS AS THE OPERATOR PAYS ANOTHER TK 1,000CR ..................... 3
SMP REGULATIONS ON GP SOON: BTRC .............................................................................................. 4
TEXTILE............................................................................................................................................... 4
BD SEEKS UK'S SUPPORT FOR RMG EXPORTS ....................................................................................... 4
A FLURRY OF PROPOSALS TO SUSTAIN COMPETITIVENESS ................................................................... 4
BKMEA SEEKS 10PC CASH INCENTIVE ON EXPORTS .............................................................................. 4
GLOBAL NEWS

CORONAVIRUS CRUSHES ASIA’S GARMENT INDUSTRY

 Zarchi Lwin pawned her only two gold bangles for $140 when the owner of the Myanmar factory
where she sewed winter coats for British retailer Next Plc shut it down after orders dried up due
to the coronavirus.
 She is one of hundreds of thousands of garment workers across Asia who have been laid off,
according to the Workers’ Rights Consortium, a labour rights campaign group, and are now
struggling to survive with little welfare support, mired in debt and in many cases reliant on food
handouts.
 "If I have a job and an income, I can pay for medical treatment for my mother," Zarchi Lwin, 29,
told Reuters from the home she shares with her 56-year-old mother, who has lung disease, in a
shanty town on the outskirts of Yangon. "Now no income, no job," she said, fighting back tears.
"We don’t know what to do."
Source: https://thefinancialexpress.com.bd/economy/coronavirus-crushes-asias-garment-industry-1589889541

NASDAQ TO TIGHTEN LISTING RULES, RESTRICTING CHINESE IPOS

 America’s Nasdaq is set to unveil new restrictions on initial public offerings (IPOs), a move that
will make it harder for some Chinese companies to debut on its stock exchange, people familiar
with the matter said on Monday.
 While Nasdaq will not cite Chinese companies specifically in the changes, the move is being
driven largely by concerns about some of the Chinese IPO hopefuls’ lack of accounting
transparency and close ties to powerful insiders, the sources said.
 At a time of escalating tensions between the United States and China over trade, technology
and the spread of the novel coronavirus, Nasdaq’s new curbs on Chinese IPOs represent the
latest flashpoint in the financial relationship between the world’s two largest economies.
Source: https://thefinancialexpress.com.bd/stock/nasdaq-to-tighten-listing-rules-restricting-chinese-ipos-1589877343

OIL PRICES EASE ON DIM ECONOMIC OUTLOOK DESPITE SIGNS OF FIRMER DEMAND
 Oil prices dipped on Wednesday as concerns over the lasting economic fallout from the
coronavirus pandemic outweighed signs of improving demand and production cuts by major oil
producers.
 Brent crude futures for July delivery LCoc1 were trading down 11 cents, or 0.3%, at $34.54 per
barrel at 0031 GMT.
 US West Texas Intermediate (WTI) crude futures for July CLc1 were down 13 cents, or 0.4%, at
$31.83 a barrel. The July contract became the front month after WTI futures for June expired on
Tuesday, avoiding the chaos of last month's May expiry when prices slid into negative territory.
 Oil prices have risen in the past three weeks, with both benchmarks climbing to above $30 for
the first time in more than a month on Monday, supported by massive output cuts by major oil
producers and signs of improving demand.
Source: https://tbsnews.net/world/global-economy/oil-prices-ease-dim-economic-outlook-despite-signs-firmer-demand-83398

ASIA STOCKS UNDER PRESSURE AS VACCINE RALLY FALTERS

 Asia stocks are likely to come under pressure on Wednesday, tracking declines on Wall Street
while gold prices were buoyed by safe-haven demand as economic indicators pointed to more
signs of recession.

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  Hong Kong futures fell 0.23% and Australian shares were set to open lower, tracking US market
losses and as diplomatic tensions between Canberra and Beijing rose. Nikkei futures were little-
changed versus Nikkei 225 index's previous close.
 Australia and China traded barbs on Tuesday in an increasingly acrimonious spat over Australia's
support for a global inquiry into the origins of the coronavirus pandemic.
Source: https://tbsnews.net/world/global-economy/asia-stocks-under-pressure-vaccine-rally-falters-83377

MACRO ECONOMY

BANGLADESH BANK SIGNS DEALS WITH 44 BANKS OVER STIMULUS LOAN REFINANCING
 The Bangladesh Bank has signed participation agreements with 44 banks to disburse Tk 15,000
crore in loans for the implementation of the government-announced stimulus package for large
industries and service sector.
 Apart from the 44 banks, 23 non-bank financial institutions will sign the participation agreement
today, the official added. The banks will arrange the funds from their own sources.
 The government has declared a Tk 30,000 crore stimulus package for large industries and the
service sector entities affected by the coronavirus outbreak in a bid to foster economic recovery.
Source: https://www.newagebd.net/article/106802/bangladesh-bank-signs-deals-with-44-banks-over-stimulus-loan-
refinancing

FBCCI FORMS SECTOR-WISE COUNCILS TO HELP BUSINESSES BORROW FROM STIMULUS PACKAGES
 The country's apex trade body has begun forming sector-wise councils to expedite disbursement
of the funds from the government-announced stimulus packages aimed at helping businesses
and industries recover from the devastating impact of the global coronavirus pandemic.
 The councils would help implement the stimulus packages and revive the economy from the
fallout of the rogue virus-induced shutdown of economic activities since March 26.
 "The FBCCI has been forming the sector-wise councils from last week so that banks can feel
confident in disbursing the funds and borrowers can repay the loans," said Sheikh Fazle Fahim,
president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), at a
virtual meeting at the chamber yesterday.
Source: https://www.thedailystar.net/business/news/fbcci-forms-sector-wise-councils-help-businesses-borrow-stimulus-
packages-1904227
Source: https://www.newagebd.net/article/106800/fbcci-demands-corporate-tax-cut-to-25pc-over-3yrs

ABOUT TIME CONSTRUCTION SECTOR RESTARTS IN PHASES: EXPERTS

 Work in the construction sector should resume in phases with proper safety measures for the
sake of the country's infrastructure development, according to experts and industry insiders
 The last quarter of a fiscal year is very important for the construction sector as many
infrastructure projects under the government's annual development programme (ADP) come
close to completion during this quarter, said SM Khorshed Alam, president of the Bangladesh
Association of Construction Industry.
 "But there has been no progress in the implementation of the projects because of the
pandemic," he said at a virtual discussion on "sustainable solutions to overcome the impacts of
the coronavirus pandemic on the construction sector", organised by The Daily Star yesterday.
Source: https://www.thedailystar.net/business/news/about-time-construction-sector-restarts-phases-experts-1904233

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HEALTH SECTOR GETS BIGGEST BUMP UP IN NEXT YEAR’S DEVELOPMENT BUDGET
 The government appears to have paid heed to the growing calls for a bigger health budget, with
its allocation from the annual development programme soaring 28.92 per cent next fiscal year,
the highest amongst the 12 sectors.
 Next fiscal year, some Tk 13,033 crore has been allocated to the health sector that is bursting at
the seams with the escalating caseloads from the Tk 205,145 crore ADP approved by the
National Economic Council (NEC) yesterday.
 Of the money going to the health sector, Tk 4,282 crore would come from the external sources.
The World Bank and the Asian Development Bank have each approved $100 million to aid the
government to meet the growing expenditure in the sector. The Asian Infrastructure Investment
Bank is also providing finances for the health sector.
 The agriculture sector saw the second-highest allocation growth of 26.43 per cent. The
government set aside Tk 8,382 crore for fiscal 2020-21, up from Tk 6,524 crore this year.
Source: https://www.thedailystar.net/business/news/health-sector-gets-biggest-bump-next-years-development-budget-
1904236

SPENDING HITS FOUR-YEAR LOW

 The Annual Development Programme (ADP) spending hit four-year low in the first 10 months of
the current fiscal year (FY) 2019-20 due to the impact of the coronavirus on the development
work, officials said.
 The government ministries and agencies spent Tk 988.40 billion, 49.13 per cent of total
allocation in the Revised ADP, during the July-April period of the current FY.
 During the same period (Jul-Apr) in last FY2019, the public agencies spent 55 per cent of their
total allocation while 52 per cent in FY2018, 54.56 per cent in FY2017 and 50.17 per cent in
FY2016.
Source: https://today.thefinancialexpress.com.bd/last-page/spending-hits-four-year-low-1589911423

‘RESURGENT BANGLADESH’ LAUNCHED TO HELP PRIVATE SECTOR RECOVER

 Resurgent Bangladesh, an initiative to help the country recover its private sector's dynamism
from Covid-19-induced economic shocks, was jointly launched on Tuesday by four leading
business organisations and a private sector economic policy think tank.
 These institutions are the Metropolitan Chamber of Commerce and Industry (MCCI), Dhaka
Chamber of Commerce and Industry (DCCI), Chittagong Stock Exchange (CSE), Business Initiative
Leading Development (BUILD), and Policy Exchange, said a press release from the DCCI.
 The initiative seeks to help overall economic recovery in Bangladesh by systematically assessing
the Covid-19 pandemic's impact on the private sector, and developing recovery strategies for
key economic themes.
Source: https://tbsnews.net/economy/resurgent-bangladesh-launched-help-private-sector-recover-83245

TELECOMMUNICATION

BTRC, GP NOW SEE SOLUTION IN TALKS AS THE OPERATOR PAYS ANOTHER TK 1,000CR
 Officials of Grameenphone and the telecom regulator will meet soon to work out an amicable
solution to the ongoing tussle over an audit claim, according to Md Jahurul Haque, chairman of
the Bangladesh Telecommunication Regulatory Commission.
 Grameenphone's Chief Executive Officer Yasir Azman said they were not on the same page with
the regulator over the amount of money claimed in the BTRC audit but there was still much
scope to find a way out by sitting at the negotiating table.

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  Both made the remarks while briefing journalists after the top mobile phone operator deposited
another Tk 1,000 crore to the BTRC yesterday as per an order of the apex court.
Source: https://www.thedailystar.net/business/news/btrc-gp-now-see-solution-talks-the-operator-pays-another-tk-1000cr-
1904281

SMP REGULATIONS ON GP SOON: BTRC

 The government will impose significant market power (SMP) regulations on leading mobile
phone operator Grameenphone soon to limit its market presence, the telecom regulator has
said.
 Bangladesh Telecommunication Regulatory Commission (BTRC) Chairman Md Jahirul Haque
made the announcement in a virtual press briefing on Tuesday.
 "We have formed a committee for SMP and are working on the matter. There is a 15-day notice
period and after that ends, hopefully we will see visible progress," he said.
Source: https://tbsnews.net/bangladesh/telecom/govt-limit-grameenphones-market-presence-83122
Source: https://www.newagebd.net/article/106799/smp-conditions-on-grameenphone

TEXTILE

BD SEEKS UK'S SUPPORT FOR RMG EXPORTS

 In the wake of cancellation of procurement orders by the British clothing brands, Bangladesh
has urged the UK to create a special fund so that they can continue to buy RMG products from
Bangladesh, the foreign ministry said on Tuesday.
 State Minister for Foreign Affairs M Shahriar Alam made the request during his telephonic
conversation with UK State Minister for South Asia and Commonwealth Lord Tariq Ahmad on
Monday evening, a spokesperson of the ministry said.
 During the conversation, State Minister Shahriar Alam raised the issue of cancellation of orders
by the UK brands and retailers.
Source: https://today.thefinancialexpress.com.bd/last-page/bd-seeks-uks-support-for-rmg-exports-1589911373

A FLURRY OF PROPOSALS TO SUSTAIN COMPETITIVENESS

 Apparel trade leaders have placed a number of budgetary demands, including continuation of
existing rate of source tax and corporate tax, to help sustain competitiveness in the global
market.
 They spoke about special policy support to regain positive export growth, retain
competitiveness in the global market and survive amid the COVID-19 pandemic.
 Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) demanded 10 per cent
cash incentive against using local raw materials and 4.0 per cent on imported ones for the next
two years.
Source: https://today.thefinancialexpress.com.bd/last-page/a-flurry-of-proposals-to-sustain-competitiveness-1589911171

BKMEA SEEKS 10PC CASH INCENTIVE ON EXPORTS

 The Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) has demanded a 10
per cent cash incentive on export receipts for the next two years.
 If a garment exporter uses locally made yarn and fabrics in making garment items, they would
be eligible for the cash incentive on export earnings, according to the BKMEA's budget proposal
fiscal 2020-21 to the National Board of Revenue last week.
 It also called for 4 per cent cash incentive if export-oriented garment items are made from
imported raw materials. Mohammad Hatem, vice-president of the BKMEA, urged the
government to retain the tax at source at 0.25 per cent.

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Source: https://www.thedailystar.net/business/news/bkmea-seeks-10pc-cash-incentive-exports-1904275
Source: https://www.newagebd.net/article/106801/bgmea-bkmea-for-keeping-source-tax-at-025pc-unchanged

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