Daily News Flash: 18th May 2020

Contents
GLOBAL NEWS ................................................................................................................................... 1
JAPAN SLIPS INTO RECESSION, SLUMP SET TO WORSEN AS PANDEMIC WREAKS HAVOC ..................... 1
FED CHAIR POWELL WARNS OF PROLONGED US RECESSION AFTER CORONAVIRUS ............................. 1
MACRO ECONOMY ........................................................................................................................... 1
GOVERNMENT’S BANK BORROWING SHOOTS UP TO TK 81,000CR....................................................... 1
IMPORTS CRASH IN APRIL, AS EXPECTED.............................................................................................. 1
REMITTANCE SEES NEGATIVE GROWTH EVEN AHEAD OF EID ............................................................... 2
GOVT INSTRUCTS SHIPPING LINES TO WAIVE CONTAINER DETENTION CHARGES ................................. 2
RESCUE PACKAGE NEEDED TO SALVAGE AVIATION INDUSTRY ............................................................. 2
MAY VAT RECEIPTS SLUMP ON COVID-19 ............................................................................................ 2
BANK..................................................................................................................................................... 3
BB SEEKS BANKS’ UPDATED BAD LOAN, PROVISIONING STATUS .......................................................... 3
FINANCIAL INSTITUTIONS ............................................................................................................. 3
IDLC FINANCE'S NET PROFIT SLUMPS 43PC IN Q1 ................................................................................ 3
TEXTILE............................................................................................................................................... 3
GARMENT EXPORTERS GET FRESH FACILITY ......................................................................................... 3
CEMENT ............................................................................................................................................... 4
VIRUS PANDEMIC THREATENS TO PULVERISE CEMENT SECTOR ........................................................... 4
ENGINEERING .................................................................................................................................... 4
NAVANA FIRST TO SEEK TK1,200 CRORE PANDEMIC BAILOUT .............................................................. 4
PHARMACEUTICALS & CHEMICALS ........................................................................................... 4
SILVA PHARMA SEEKS 6 MORE MONTHS FOR IPO IMPLEMENTATION .................................................. 4
GLOBAL NEWS

JAPAN SLIPS INTO RECESSION, SLUMP SET TO WORSEN AS PANDEMIC WREAKS HAVOC
 Japan’s economy slipped into recession for the first time in 4-1/2 years, putting the nation on
course for its deepest postwar slump as the coronavirus crisis ravages businesses and
consumers.
 Monday’s first-quarter GDP data underlined the broadening impact of the outbreak, with
exports plunging the most since the devastating March 2011 earthquake as global lockdowns
and supply chain disruptions hit shipments of Japanese goods.
 Analysts warn of an even bleaker picture for the current quarter as consumption crumbled after
the government in April requested citizens to stay home and businesses to close, intensifying
the challenge for policymakers battling a once-in-a-century pandemic, Reuters reported.
Source: https://thefinancialexpress.com.bd/economy/japan-slips-into-recession-slump-set-to-worsen-as-pandemic-wreaks-
havoc-1589776040
Source: https://www.reuters.com/article/us-japan-economy-gdp/japan-slips-into-recession-worst-yet-to-come-as-pandemic-
wreaks-havoc-idUSKBN22U001

FED CHAIR POWELL WARNS OF PROLONGED US RECESSION AFTER CORONAVIRUS

 Jerome Powell, chairman of the Federal Reserve board of governors, warned Wednesday that
the long-term health of the US economy may depend on more fiscal stimulus to fight the
economic impacts of the coronavirus.
 The scope and speed of this downturn are without modern precedent, significantly worse than
any recession since World War II. We are seeing a severe decline in economic activity and in
employment, and already the job gains of the past decade have been erased. Since the
pandemic arrived in force just two months ago, more than 20 million people have lost their jobs.
Source: https://tbsnews.net/world/global-economy/fed-chair-powell-warns-prolonged-us-recession-after-coronavirus-82573

MACRO ECONOMY

GOVERNMENT’S BANK BORROWING SHOOTS UP TO TK 81,000CR

 The government’s borrowing from the country’s banks to meet budget deficit increased to Tk
81,000 crore as of May 13 this fiscal year due to a dismal revenue collection amid the global
coronavirus outbreak.
 According to the Bangladesh Bank data, the government’s outstanding bank borrowing stood at
Tk 1,89,096 crore as of May 13 this year from Tk 1,08,095.7 crore on June 30, 2019.
 Of the Tk 81,000 crore, the borrowing through treasury bills and bonds from scheduled banks
stood at Tk 69,000 crore and the remaining Tk 12,000 crore was borrowed from the central
bank.
Source: https://www.newagebd.net/article/106645/governments-bank-borrowing-shoots-up-to-tk-81000cr

IMPORTS CRASH IN APRIL, AS EXPECTED

 The country's import decreased 62 per cent year-on-year to $1.95 billion in April as industrial
production has almost come to a halt due to the ongoing shutdown to tackle the spread of the
coronavirus.
 The settlement of letters of credit (LCs), or generally known as import, also declined 53 per cent
in April from a month earlier, when the figure stood at $4.17 billion, according to data from the
central bank.

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  Both the LCs settlement for industrial raw materials and capital machinery nosedived last
month, putting an adverse impact on the overall import.
Source: https://www.thedailystar.net/business/news/imports-crash-april-expected-1903585
Source: https://www.newagebd.net/article/106646/imports-slump-62pc-in-april-amid-pandemic
Source: https://tbsnews.net/economy/trade/import-expenditures-dip-62-percent-82471

REMITTANCE SEES NEGATIVE GROWTH EVEN AHEAD OF EID

 In the first 14 days of May, remittance growth fell by 8.15 percent year-on-year as expatriates
sent less money home even before Eid, according to Bangladesh Bank data released on Sunday.
 The country received $800 million in remittance in the first two weeks of the current month in
contrast to $871 million over the same period a year before.
 The foreign exchange reserves stood at $32.84 billion as of 17 May which was above $33 billion
in the first week of this month.
Source: https://tbsnews.net/economy/remittance-sees-negative-growth-even-ahead-eid-82432

GOVT INSTRUCTS SHIPPING LINES TO WAIVE CONTAINER DETENTION CHARGES

 The Department of Shipping yesterday instructed foreign shipping lines and their local agents
not to impose container detention charges on the import containers because of the coronavirus
pandemic.
 It also asked them to return the charges that have already been collected. The decision came in
a meeting with stakeholders chaired by Syed Ariful Islam, director general of the Department of
Shipping.
 Detention charges include the money that merchants pay for the use of container within the
terminal beyond the free period and the fee that merchants pay for the use of container outside
of the terminal or depot beyond the free period.
Source: https://www.thedailystar.net/business/news/govt-instructs-shipping-lines-waive-container-detention-charges-
1903579

RESCUE PACKAGE NEEDED TO SALVAGE AVIATION INDUSTRY

 Bangladesh should unveil a rescue package and cut various charges to salvage the local aviation
industry after it crash-landed because of the coronavirus pandemic, said the top official of a
private airline.
 The government has already announced incentives for various sectors but nothing specific for
the aviation sector, said Abdullah Al Mamun, managing director of US-Bangla Airlines.
 "If the airlines survive, travel agencies, tour operators and even the hotel industry will survive.
Otherwise, there will be extreme anarchy in the aviation and tourism sector," he told The Daily
Star in an interview recently.
 The comments from the chief executive of the country's largest private carrier came as the
aviation industry in Bangladesh has remained largely grounded, much like those in other
countries, for the last couple of months in order to stop the spread of the killer bug.
Source: https://www.thedailystar.net/business/news/rescue-package-needed-salvage-aviation-industry-1903549

MAY VAT RECEIPTS SLUMP ON COVID-19

 The collection of valued added tax or VAT against returns slipped by over 38 per cent in May,
although the number of filing rose by 11,000 month on month.
 Despite lockdown, the return submission has jumped by 34.81 per cent this month as taxmen
doubled down their efforts, the National Board of Revenue or NBR data showed.
 The tax authority received Tk 38.78 billion of VAT against the returns in May, down from Tk 63
billion last month.

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Source: https://today.thefinancialexpress.com.bd/first-page/may-vat-receipts-slump-on-covid-19-1589736125
Source: https://www.newagebd.net/article/106647/vat-returns-submission-picking-up-but-receipts-dip-in-may

BANK

BB SEEKS BANKS’ UPDATED BAD LOAN, PROVISIONING STATUS

 The central bank yesterday asked banks to send their figure of defaulted loans and provisioning
of the first quarter of this year within tomorrow.
 Banks have been also asked to provide their announced interest rate on both loans and savings
for March, April and May within the next day, according to a Bangladesh Bank letter sent out to
all managing directors of lenders.
 The central bank earlier asked banks to provide the data within 10 days after completion of the
ongoing general holidays declared by the government to tackle the spread of the coronavirus
pandemic.
Source: https://www.thedailystar.net/business/news/bb-seeks-banks-updated-bad-loan-provisioning-status-1903540

FINANCIAL INSTITUTIONS

IDLC FINANCE'S NET PROFIT SLUMPS 43PC IN Q1

 IDLC Finance's net profit dipped more than 43 per cent year-on-year in the first quarter for
January-March, 2020 amid bearish stock market and Covid-19 pandemic.
 The consolidated financial statements are comprised of the financials of IDLC Finance and its
wholly owned subsidiaries: IDLC Securities, IDLC Investments and IDLC Asset Management.
 The board of directors of the company in a virtual meeting on Thursday last approved the
consolidated first quarter (Q1) un-audited financial statements of the company.
 As per the official disclosure, the company's net profit after tax stood at Tk 292.63 million in Q1
for January-March, 2020, which was Tk 515.34 million in the same quarter last year.
Source: https://today.thefinancialexpress.com.bd/stock-corporate/idlc-finances-net-profit-slumps-43pc-in-q1-1589729662

TEXTILE

GARMENT EXPORTERS GET FRESH FACILITY

 The central bank has enhanced the loan ceiling for the members of textiles and clothing
exporters under its export development fund or EDF scheme to help boost proceeds from
overseas sales, officials say.
 "It has now been decided to enhance the limit of US$ 25 million to $30 million for member of
the BGMEA and BTMA," the Bangladesh Bank said in a notice on Sunday.
 Earlier, an authorised dealer or AD bank could borrow a maximum of $25 million from the fund
against its foreign currency financing of input procurement for member mills of the Bangladesh
Garment Manufacturers and Exporters Association and the Bangladesh Textile Mills Association
or BTMA.
Source: https://today.thefinancialexpress.com.bd/first-page/garment-exporters-get-fresh-facility-1589736550
Source: https://tbsnews.net/economy/rmg/rmg-textile-factories-get-max-30m-loan-export-fund-82393

3
CEMENT

VIRUS PANDEMIC THREATENS TO PULVERISE CEMENT SECTOR

 The current demand for cement declines drastically as the country-wide constructions, including
that of mega projects, have almost come to a halt following the prolonged lockdown enforced
to flatten the curve of Covid-19.
 The sales of cement dropped around 46 per cent in April following serious disruptions in
constructions, according to information of Bangladesh Cement Manufacturers Association
(BCMA).
 The manufacturers have observed the severe fall in sales, despite they had expected double
digit growth in 2020 after achieving above 7.0 per cent growth in previous year.
 The BCMA president Md. Alamgir Kabir said the sales of cement declined drastically as the novel
corona virus has crippled the Tk 300 billion industry.
Source: https://today.thefinancialexpress.com.bd/stock-corporate/virus-pandemic-threatens-to-pulverise-cement-sector-
1589729629

ENGINEERING

NAVANA FIRST TO SEEK TK1,200 CRORE PANDEMIC BAILOUT

 Reeling from the effects of the coronavirus shutdown, Navana Group, one of the country's
oldest conglomerates, has sought Tk1,200 crore in financial assistance from the government to
bail it out from the present crisis.
 Against this backdrop, the group has requested the finance ministry to give it Tk1,200 crore in
working capital from the Tk30,000 crore stimulus package the government has offered at 4.5
percent interest.
 In the letter, Navana has also said it wants four state-owned banks – Agrani, Janata, Rupali and
Sonali – to take over its loans worth around Tk4,000 crore with around four dozen private
lenders.
Source: https://tbsnews.net/economy/trade/navana-first-seek-tk1200-crore-pandemic-bailout-82549

PHARMACEUTICALS & CHEMICALS

SILVA PHARMA SEEKS 6 MORE MONTHS FOR IPO IMPLEMENTATION

 Silva Pharmaceuticals Ltd, listed on both the bourses, has applied to the securities regulator
seeking six more months to implement its initial public offering (IPO).
 In October 2018, the company raised Tk30 crore from the stock market to acquire machinery
and equipment, implement civil construction and repay loans. But, it could not complete the
project on time.
 The company's IPO utilisation period expired on April 10, 2020. It has already applied to the
Bangladesh Securities and Exchange Commission to extend its project tenure.
Source: https://tbsnews.net/economy/stock/silva-pharma-seeks-6-more-months-ipo-implementation-82237

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