15 September 2008

AT Capital Weekly Update

Weekly News Update

Key themes in this issue are:
Global Markets: • The bankruptcy of Lehman Brothers, the acquisition of Merrill Lynch by Bank of
America and the collapse of AIG’s stock price are unprecedented and exceptional.

• • •

Following the nationalization of Fannie Mae/Freddie Mac and the Bear Stearns collapse, we are seeing the biggest challenge to global markets since the depression. The US government was right to say no to a bailout given moral hazard risks. It seems likely AIG will be forced to merge and other brokerages will remain under pressure. EM currencies are now under additional pressure having already fallen sharply on the collapse in oil and other commodity prices in the past few months.

• We believe that enthusiasm for the BBBF and PPP initiatives, make sense for a capital-starved economy where the public sector is also capacity constrained. A responsibility for the Caretaker Government is not only to ensure the continuity of the BBBF and similar such institutions, but to facilitate and encourage greater ownership of economic policy issues by both major political parties.

Special Focus on Bangladesh’s Aid Budget • Bangladesh receives in excess of USD 1.2bn in foreign aid. In two special focus

Asian Tiger Capital Partners


articles this week we discuss how to get leverage from aid by targeting it to increase access to private sector flows.

Ifty Islam Managing Partner ifty.islam@at-capital.com Syeed Khan Partner syeed.khan@at-capital.com Professor Jahangir Sultan Senior Advisor jahangir.sultan@at-capital.com

Secondly we discuss the need for reform of technical assistance programs and the importance of local capacity building relative to reliance on foreign consultants.

Did Lehman bankruptcy reflect global investment banker hubris?

Asian Tiger Capital Partners
UTC Building, Level 16 8 Panthapath, Dhaka-1215 Bangladesh Tel: 8155144, 8110345 Fax: 9118582 www.at-capital.com

15 September 2008

3 3 3 3 4 4 4 5 5 5 6 6 7 8 10 10 11 11 11 12 12


Overview – Global Markets
Wall Street’s “Perfect Storm”: A tale of hubris, denial and financial kamikaze The US government needed to “just say no” to another bailout Asian markets suffer collateral damage from Lehman Bankruptcy – how long will DSE remain immune? Week ahead a crunch time for Wall Street Bank of America acquires Merrill: AIG next in the firing line? From subprime housing crisis to Lehman bankruptcy EM recoupling: Asian currencies continue to suffer from global rout Global housing collapse – SPLAT! Comrade Paulson of the United States Soviet Republic

Overview – Bangladesh
BBF one year on Appendix

Special Focus I: Getting leverage from Bangladesh’s Aid budget Special Focus II: Making Foreign Aid more Effective
A critique of technical assistance Greater use of local consultants Recommendations for aid recipient governments Recommendations for donors Recommendations for the international community Recommendations for civil society organizations

Stock Market Weekly
Weekly Stock Market Commentary Stock Market News

13 14 15 17 18 19

Economic News

Sector News

AT Capital Weekly Update 2

15 September 2008

Ifty Islam, Managing Partner

Overview – Global Markets
Wall Street’s “Perfect Storm”: A tale of hubris, denial and financial kamikaze Bangladesh’s capital markets continue to move in relatively tight ranges and appear to be an island of stability in a sea of incredible global financial turbulence. The events happening elsewhere in the world are both unprecedented and unimaginable. For the movie buffs among our readers who have seen the George Clooney Film “the Perfect Storm” directed by Wolfgang Pietersen, the scene where we see the confluence of three hurricanes over the Atlantic most accurately sums up what is happening on Wall Street right now. Lehman, the fourth largest investment bank and last year's biggest underwriters of mortgage-backed securities, plans to file a Chapter 11 petition in the US Bankruptcy Court for the Southern District of New York. The filing will be by the holding company and won't include any of its subsidiaries. This event that seemed inconceivable given the long line of prospective suitors interested in purchasing the firm or its asset management arm as recently as a month ago. Late Sunday night, Bank of America struck a deal to buy Merrill Lynch for USD 29 a share, or about USD 50bn. Bloomberg described events as the biggest shock to the financial system since the Great Depression while one market watcher noted that ``The tectonic plates beneath the world financial system are shifting, and there is going to be a new financial world order that will be born of this. Lehman's collapse wipes out a company that had a market value of USD 45.5bn in February 2007. Merrill's sale to Bank of America for USD 29 a share, while about a 70% premium to Merrill's value on Friday, compares with the company's USD 86bn market capitalization in January 2007. The US Government needed to “just say no” to another bailout The US government (in our view correctly) drew a line in the sand in refusing to bailout or give any guarantees to either Bank of America or Barclays Bank to limit their liability to the tens of billions of dollars of illiquid commercial mortgage backed securities on their books. Yes certainly they might have provided a temporary reprieve to Lehman. But following the recent nationalisation (or “Conservatorship” as it is known in polite government circles) of Fannie Mae and Freddie Mac, and bailout of Bear Stearns via a government guarantee in the sale to JPMorgan, the risks to the US national balance sheet was becoming unsustainable. Increasingly the home of the capitalist system was becoming a “United States Socialist Republic”, or USSR, with a growing dominance on ownership of the public sector of the financial system. But far worse than the credit risk to the US government was the dramatically increased risks of what economists call “moral hazard”, that is government decisions encouraging private sector banks to take risky decisions on the basis that the public sector would bail them out if things went wrong. They have all the upside with little downside which would result in excessive and foolhardy risk taking.

Asian markets suffer collateral damage from Lehman Bankruptcy – how long will DSE remain immune?

At the time of writing, namely early afternoon September 15 in Dhaka, Asian stocks, US futures and the dollar tumbled as credit market turmoil pushed Lehman Brothers Holdings Inc. into bankruptcy and Merrill Lynch & Co. to accept a takeover from Bank of America Corp. Macquarie Group Ltd., Australia's biggest investment bank, slumped 11% as the New York Times reported American International Group Inc. is seeking a USD 40bn bridge loan from the Federal Reserve. Stock indexes fell more than 4% in Taiwan, the Philippines and India. Standard & Poor's 500 Index futures expiring in December slumped 3.6% to 1,213.80. Bloomberg reported that the MSCI Asia Pacific excluding Japan Index lost 5.21, or 1.5%, to 348.82 at 3:40p.m. in Sydney. Stock markets in Japan, South Korea, Hong Kong and China are closed for holidays, tempering losses for the Asian gauge. The dollar declined against the yen, while Treasuries and gold rose, as investors sought safer assets. The cost to protect corporate bonds from default surged on concern the tumult on Wall Street will tip the global economy into a recession. While the lack of foreign participation in the Bangladesh stock market has so far left it relatively immune to the wild gyrations on Wall Street, we would recommend a more

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15 September 2008
cautious and defensive stance for investors in the DSE. The outlook for the global economy remains bleak and the collapse of financial giants in the US, with the Treasury relatively powerless is, is a salutary lesson for Bangladeshi regulators about the uncontrollability of financial markets when sentiment truly turns. Week ahead a crunch time for Wall Street This week will be crunch time for global financial markets. Richard Bove, one of Wall Street’s best known banking sector analysts noted that “We will be entering uncharted territory. The company has USD 600bn in assets and USD 550bn in debt outstanding. Forcing liquidation will set off problems in other companies and markets everywhere.” From a legal perspective, bankruptcy severs all counterparty contracts, and therein lies the systemic risk. This would be the first time we've tested how much damage will be done by a bankruptcy. On Sunday, there was an extraordinary trading session on Wall Street as the major banks tried to offset their counterparty agreements with Lehman Brothers with each other to stop a seizing up and collapse in liquidity of the financial system. In addition, 10 major commercial and investment banks announced Sunday night that they would pool USD 70bn of their own money to create a borrowing facility. The ten institutions, which include Citigroup Inc., Credit Suisse Group, Deutsche Bank AG, could tap the pool to help them ride out the crisis. The banks also said they are mutually committed to trying to mitigate market volatility. The Federal Reserve will expand its lending facilities in the wake of the likely demise of Lehman Brothers Holdings Inc., taking a wider array of securities, including equities, as collateral for its loans in order to ensure that the financial system has enough liquidity. Bank of America acquires Merrill: AIG next in the firing line? The next potential target for short sellers is likely to be AIG, once the world’s largest insurance company. The Wall Street Journal noted that AIG executives spent the weekend trying to raise cash, either from asset sales or a capital infusion from private-equity firms, or both. AIG executives were meeting with regulators to see if they could transfer capital from some of its subsidiaries to the holding company. During the weekend, AIG turned down a capital infusion from a group of private-equity firms led by J.C. Flowers & Co. because an option tied to the offer would have effectively given them control of the company. The proposed option would have allowed the firms to acquire AIG for $8 billion under certain conditions. That price is just one-fourth of AIG's current market value. The wealth decimation they have suffered and the speed of their descent is extraordinary. By way of context, AIG had over USD 1 trillion in assets at the end of the second quarter. Its shareholders equity -- assets minus liabilities -- stood at about USD 78bn at that point. The chart below illustrates that AIG has been by far the worst performer year-to-date among majors including Citigroup (C), General Motors (GM), Merck (MRK) and General Electric (GE). From subprime housing crisis to Lehman bankruptcy


Source: Bespoke Research
The chart below highlights as of September 12, who were the biggest casualties on the crisis last week. With Lehman gone and Merrill having been taken over, AIG and WAMU seem the next source of instability. Given the size and breadth of activities, clearly AIG turbulence does pose much bigger risks to the global financial system.

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15 September 2008
'Evercore Partners Inc. Chief Executive Officer and Former Deputy Treasury Secretary Roger Altman said in an interview on CNBC. ``But as to whether we've seen the last of this crisis, I think the answer to that is clearly no. And exactly where it goes from here and how it unfolds, I'm unsure.'' Nouriel Roubini, an Economics Professor at New York University, said the independent securities firm model is ``fundamentally flawed'' and that every securities firm will need to combine with a bank to gain a deposit base and greater access to loans from the Federal Reserve. EM recoupling: Asian currencies continue to suffer from global rout Swings in emerging-market currencies may foreshadow further losses for traders already suffering from the broadest declines this decade. A JPMorgan report notes that volatility in options covering currencies from the Brazilian real to the South Korean won is rising at a faster rate than those for the euro and pound. Rising volatility was an element of past financial market upheavals, including the global slump in stock markets from 2000 through 2002 after the technology bubble burst. The trigger this time is speculation that developing nations can no longer withstand simultaneous slowdowns in the economies of the US, Europe and Japan and the resulting lower appetite for high risk assets. The 26 emerging-market currencies tracked by Bloomberg are down an average 5.5% since June, compared with an increase of 2.2% in the first half of 2008. The biggest losers since June in emerging markets have been the Iceland krona, Bulgarian lev and Brazilian real. Each has fallen more than 10%. Only China's yuan has appreciated, gaining 0.15%. Morgan Stanley suggests that India's rupee and South Korea's won may decline the most because the ability to buy and sell financial assets such as stocks is easier for foreign investors in those countries than in most other developing nations. Declines in oil, nickel and wheat from records have pushed the MSCI Emerging Market Index down by more than a third since October, leaving the index 25% below its 200-day moving average. Over the past two decades, the difference grew this wide only in the aftermath of Sept. 11, the USD 40bn Russian default and Mexico's currency devaluation in 1994. Each time, the index rallied 20% or more in the next three months.

Global housing collapse – SPLAT!

Comrade Paulson of the United States Soviet Republic

AT Capital Weekly Update 5

15 September 2008

Ifty Islam, Managing Partner

Overview – Bangladesh
BBBF one year on On Sep14, I attended the "Dialogue on Public-Private Partnership for Economic Development" held to commemorate the first anniversary of the Bangladesh Better Business Forum (BBBF) and the Regulatory Reforms Commission (RRC). The BBBF is a 41 strong committee, headed by the Chief Adviser, almost equally split between the public and private sectors, whose goal is to be one of the primary interfaces between the public and private sectors. Five working groups – all co-chaired by non-civil servants – deal with business entry and operations, business finance, infrastructure, macroeconomic policy and skills development. The Chief Adviser noted that “"The caretaker government has now approved 226 separate recommendations to support investment that are now implemented or in process of implementation…This is one indication of our steadfast and sincere commitment to transform this partnership from an idea into reality. The government is not the answer to all problems in the market, but it can facilitate solutions to the problems…It is ultimately the responsibility of the business community to take the lead and solve the problem. That is the best and only way forward for us” We summarize the major policy proposals, implemented, approved and pending in the appendix to this section. We believe that enthusiasm for PPP initiatives more broadly and the BBBF specifically, make sense in the context of a capital starved economy where the public sector is also significantly capacity constrained.

A report in the September 15 Daily Star noted that the RRC held seven meetings and submitted 33 recommendations in 11 interim reports, but nearly all recommendations remained unimplemented. RRC Chairman Akbar Ali Khan stated that “Only one recommendation by RRC -- posting gazette notifications on the Web -- has come through...No other recommendations are fully implemented yet. He blamed slow implementation on the ministries and divisions that he said did not take necessary steps. Professor MA Taslim, a BBBF member, said: "Things will change gradually…It's an ongoing process. Nothing will happen overnight.” But we would argue that if the private sector accepts such a slow pace of implementation then the major “raison-d’être” of the BBBF ceases to exit. We need to maintain the pressure for necessary policy decisions to be taken in a timely fashion.

Anything less will make it difficult for Bangladesh to increase its rate of growth from 5-6% towards that of some of its more successful regional neighbours. We would also argue that a responsibility for the Caretaker Government (CTG) is not only to ensure the continuity of the BBBF and similar such institutions, but to facilitate and encourage greater ownership of economic policy issues by both major political parties. As Bangladesh males the transition back towards an elected government at the end of this year, it is extremely important that both the Awami League and the BNP feature the goal of delivering dynamic economic growth as a central element in their political manifestos and policy priorities. To date, there appears to be little dialogue on economic issues among the political parties. Transformational economic change has been electorally popular in countries as diverse as India, Singapore, Malaysia, Korea and Taiwan. We need to ensure that delivering a more effective enabling environment in terms of more power generation (and specifically developing Bangladesh’s coal reserves) as well as progress on roads and ports.

One area we need to have greater progress is more frequent assessment (we would argue monthly) of what the current policy initiatives are and why there has been no progress made. It was interesting to see the number of power generation proposals the BBBF has considered but has failed to see any resolution. Similarly on overcoming traffic congestion or establishing the second submarine cable. All these proposals are “under consideration” but decisions can be taken with the necessary persistence and tenacity from the private sector to pressure the government to take a decision.

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Bangladesh Better Business Forum
Recommendation Implementation Status

BBBF Progress

Recommendation Implementation Status

• •

5 BBBF Sessions, 40 Sessions of the 5 working groups 249 Recommendations proposed, 113 approved - 52 implemented, 61 under implementation, 128 under under review.

Skills Development

Recommendation Implementation Status

Business Entry & Operations
Recommendation Implementation Status


• • • •

ICT Task Force. Trans-Eurasia Information Network-3 Connectivity. Internet Bandwidth costs reduced. Tax Holiday extended for ICT sector for 5 years.


• •


• • • • •

Company Registration Certificate in 3 days. (RJSCF). Trade License in 3 days (City Corporation). Environmental Clearance Certificate in 30 days (DOE). TIN Certificate within 24 hours (NBR). Monitoring Cell formed at Customs House (NBR).

National Skills Development Council (NSDC) formed. Enhance professional skills in ICT: - ICT professional skills assessment and enhancement program (IPSAEP) approved in principal.

Business Finance

Recommendation Implementation Status

Macro Economic Policy

Recommendation Implementation Status


• • • •

SME tax & VAT incentives. Continuation of tax rebate facilities to public limited companies declaring dividend over 20%. Lower Import financing rates: essential commodities. Reduced Import duty for capital machinery, intermediate goods and raw materials.


• • • • • •

Loanable SME funds: 40% to small enterprises. Increased SME re-financing to Tk. 50 crore. NGO assistance in SME loan distribution & recovery. SME skills trading enhanced: SME foundation. Women SME entrepreneurs: enhanced refinancing. 99 SME Service Centers approved.

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15 September 2008

developmental considerations. Another concern is a lack of ownership of recipient countries in their development programmes and a resultant dominance of expensive and ineffectively targeted technical assistance programmes staffed with foreign consultants. DR Ngaire Woods, the Director of the Oxford University Global Economic Governance Programme, published an interesting paper noted that “Donors have begun to recognize that incoherence is a problem. The World Bank, the IMF, and a few donors using sector-wide approaches Sector Wide Approaches (SWAPs) have been attempting to enhance coordination and coherence. In Canada, the Netherlands, Australia, the United Kingdom and the United States, efforts have been underway to weave the various diplomatic, military and development initiatives into a more coherent and effective response to failing. What donors are failing to do is allow space for recipient governments to define their own priorities and set down frameworks that would compel donors to act better. “ In the Sep 9 Financial Times, Adrian Wood, former Professor of Economics at Oxford and DFID Chief Economist 2000-2005 noted that “There are various reasons to be concerned about high aid dependence, but the most worrying is the undermining of good governance by distortion of political accountability. Governments that are highly dependent on aid pay too much attention to donors and too little to their citizens. This might not matter if the interests of citizens and donors were identical. But all donors have some non-developmental motives and, even when they seek to promote development, they have their own priorities. The result is confused and shifting policies, volatile aid and spending and, as a result, slower growth.” He goes on to note that some developing countries, most of them in Africa, have had high levels of aid dependence – in excess of 10% of gross domestic product, or half of government spending – for decades. It is questionable whether this has been helpful. He outlined a plan for donor agencies to limit aid to less than 50% of domestic tax revenues. What we want to focus on in this article is, how can the aid budget be targeted, much like in formulating investment strategy, so we get the most leverage or return on capital for each dollar spent. Aid also needs to be focused on the most attractive risk-return projects, that is, with careful consideration not only for the potential impact but the risks in achieving that outcome.

Special Focus: Foreign Aid - Part I
A Leveraged Strategy for Bangladesh’s Aid Budget (this
an expanded version of the article published in the Sep 11 Daily Star Business Section)

We have just seen the conclusion of the third High Level Forum on Aid Effectiveness that was held on Sep 4 in Accra, Ghana, attended by ministers from both donor and developing countries as well as the multilateral agencies. With an aid budget in excess of USD 1.2bn, it is important that the people of Bangladesh be engaged in the debate on whether the resources are being effectively employed to help achieve the Millenium Development Goals (‘MDG’) especially poverty reduction via faster growth, reducing corruption and better political, regulatory and corporate governance. Of the total aid to Bangladesh major donors are the World Bank, the Asian Development Bank, Japan, and the UK which collectively provide more than 80% of all official development assistance (ODA). The UK is Bangladesh’s largest bilateral partner, currently providing approximately 20% of ODA. Other bilateral donors include Canada, Denmark, Germany, the Netherlands, Norway, South Korea, Sweden and the United States. The EC and most UN organisations also have programmes in the country. Saudi Arabia recently provided US$50 million in flood relief/support. Three of the key stated goals and challenges that have emerged from conference, the so called “Accra Agenda for Action,” include: 1) Country ownership is key. Developing country governments will take stronger leadership of their own development policies, and will engage with their parliaments and citizens in shaping those policies. Donors will support them by respecting countries’ priorities, investing in their human resources and institutions, making greater use of their systems to deliver aid, and increasing the predictability of aid flows. 2) Building more effective and inclusive partnerships. In recent years, more development actors—middle-income countries, global funds, the private sector, civil society organizations — have been increasing their contributions and bringing valuable experience to the table. This also creates management and co-ordination challenges. Together, all development actors will work in more inclusive partnerships so that all our efforts have greater impact on reducing poverty. 3) Achieving development results and openly accounting for them—must be at the heart of everything we do. More than ever, citizens and taxpayers of all countries expect to see the tangible results of development efforts. We will demonstrate that our actions translate into positive impacts on people’s lives. We will be accountable to each other and to our respective parliaments and governing bodies for these outcomes. However, there are a number of challenges for both donors and recipient countries in formulating their aid strategy. Often, the geopolitical and foreign policy goals of certain larger donor countries tend to outweigh the optimal

AT Capital Weekly Update 8

15 September 2008
Which areas should aid be focused on as far as encouraging private sector development and growth? Clearly the three key enablers are 1) access to finance; 2) better infrastructure (especially power); 3) more effective civil service. If we think of economic growth in athletic terms, this is the oxygen boost needed to see growth jump from 6% currently to 8%. Access to finance can be split into external and internal sources. As the table shows, FDI and portfolio flows dwarf the aid budget. How can the latter be used to attract more of the former to Bangladesh? On the external side, a greater portion of Bangladesh’s development budget should be spent on helping facilitate increased FDI. This might include efforts to support Brand Bangladesh Initiatives as well as reforming the Board of Investment (BOI). The IFC-BICF are already encouragingly supporting enhancing BOI effectiveness in cooperation with the FBCCI. On internal access to finance and developing domestic capital markets, the ADB is already supporting efforts in capacity building for stock market regulators. We also need a renewed push to develop the bond markets. We need greater focus on the evolution of a private equity and venture capital capability in Bangladesh that can be the critical link between FDI and access by local companies to greater growth, strategic and risk capital. On civil service reforms, the Bangladesh Enterprise Institute is working actively with the support of a number of multilaterals on capacity building in the civil service. The World Bank and UNDP have made a valuable contribution towards alternative energy and disaster resilience. These are all positive trends. But, when discussing the effectiveness of foreign aid, an often heard complaint is that donors have a “consultant culture” with an overreliance on expensive foreign firms that offer poor value-for-money. They typically engage for short periods of time with little continuity in focus or local knowledge or context. Clearly there is a need for overseas expertise when it is not available within the country. Foreign consultants can also at times bring global perspective in technical areas such as how PublicPrivate Partnerships have worked in different parts of the world. But there may be a suspicion that some globally renowned consultants drag out projects as a consequence of a lack of familiarity with the situation on the ground. Clearly Bangladesh needs to develop its local experts and one way this might happen is if the larger donors insisted global firms like PWC and Bearing Point used part of the Bangladesh revenues to open a Dhaka office that employed more locals. This would encourage valuable knowledge transfer that would offer sustained long-term benefits. We discuss a strategy for more effective deployment of technical assistance and local capacity building in the special focus article below. The Accra Accord states that “Global funds and programmes make an important contribution to development. The programmes they fund are most effective in conjunction with complementary efforts to improve the policy environment and to strengthen the institutions in the sectors in which they operate. We call upon all global funds to support country ownership, to align and harmonise their assistance proactively, and to make good use of mutual accountability frameworks, while continuing their emphasis on achieving results. As new global challenges emerge, donors will ensure that existing channels for aid delivery are used and, if necessary, strengthened before creating separate new channels that risk further fragmentation and complicate coordination at country level. “

Another important element is increased transparency of procurement that requires accountability on aid effectiveness and results. Accra states that: “We will make aid more transparent. Developing countries will facilitate parliamentary oversight by implementing greater transparency in public financial management, including public disclosure of revenues, budgets, expenditures, procurement and audits. Donors will publicly disclose regular, detailed and timely information on volume, allocation and, when available, results of development expenditure to enable more accurate budget, accounting and audit by developing countries. “ In conclusion, as the Accra accord states, Bangladesh needs to take greater ownership and participation of its development budget to achieve the maximum impact on economic development. This is a goal that is not only critical to achieving rapid poverty reduction, but one the First World taxpayers funding development agencies would undoubtedly approve of. The decision by DFID to solicit feedback on their website on how Bangladesh can use its aid budget is a welcome first step. We are all stakeholders in process and should seek cooperative solutions in getting leverage from Bangladesh’s large aid budget.
Private sector FDI & portfolio flows to developing countries growing more rapidly than Donor Aid (figures in USD bn) Flow type Foreign aid Net FDI flows Net debt and equity flows Current account balance Change in reserves (- = increase) 2000 66.6 144.5 150 36.3 2001 N/A 155.0 154 12.8 2002 69.8 137.0 144 62.0 2003 69.8 122.8 210 117 2004 77.0 162.8 323 164 2005 85.1 208.5 416 310 2006 85.4 227.4 524 431.0 2007e 87.4 287.2 798 426









Source: IFS, World Bank Debtor Reporting System and staff estimates

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15 September 2008

My experience talking with staff of all the major agencies in Dhaka is that, by and large, they are as passionate about Bangladesh maximizing its chances of reaching its Millenium Development Goals and PSRP targets and as committed to more effective targeting of aid and building local capacity as critics of the existing system. But proactive policy suggestions are key rather than just criticism. A critique of technical assistance As the quotes below show, there has been consistent high level criticism for almost 40 years: “Experience indicates that technical assistance often develops a life of its own, little related either in donor or recipient countries to national or global development objectives.” Pearson Commission, 1969. “The vast bulk of technical experts and expertise at present provided by the UN and donor system have outlived theirusefulness….the time has come to rethink the purpose of aid and technical assistance within the UN system.” Richard Jolly, Institute of Development Studies, 1989. “The use of expatriate resident technical advisers by aid donors is a systematic destructive force that is undermining the development of capacity.” Edward Jaycox, former World Bank Vice President and African Director, 1993. “Almost everyone acknowledges the ineffectiveness of technical co-operation in what is or what should be its major objective: achievement of greater self reliance in the recipient countries by building institutions and strengthening local capacities in national economic management.” UNDP, 1993. “The main traditional form of technical assistance – the long term assignment of experts – is becoming an anachronism…it is no longer viable in the form it has taken for many years.” Netherlands Ministry of Foreign Affairs, 2002.

Special Focus: Foreign Aid Part II
Making Foreign Aid more Effective
“Conditionality of aid should move away from recipient countries being responsible to donors...to their electorate. The only conditionality that matters, is of the government to their people.” (Gordon Brown, 2005) The previous article on getting leverage from Bangladesh’s Aid Budget highlighted the importance of developing local capacity as well as prioritizing the areas of aid spending that were likely to result in the largest potential payback in terms of enhancing growth and attracting private sector FDI and investment flows. In this article, we focus more intensively on the specific issue of technical assistance and alternatives. We draw heavily on an excellent and thought provoking report by Action Aid entitled “Real Aid – Making Technical Assistance Work” (http://www.actionaid.org.uk/doc_lib/real_aid2.pdf) While that report and some of the other recommendations that appear in the NGO and academic literature on aid may appear overly critical of donor agencies, recent initiatives such as the DFID consultative process to develop a new aid strategy when their current plan expires in April 2009 underlines an encouraging degree of openness. DFID states that “(we) are developing a new strategy for its programme in Bangladesh. The key aim is to consider how we can improve our aid programme to better target the challenges that Bangladesh faces in terms of poverty reduction, governance and overall economic growth.” (http://www.dfid.gov.uk/consultations/default.asp)

If the other bilateral agencies as well as the multilaterals (World Bank, ADB and UNDP) take a similar approach, then Bangladesh can hopefully have a much larger impact on the development process and the most effective use of the aid budget.

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15 September 2008
“Nowhere is the challenge of increasing real aid as a share of overall aid greater than in the case of technical assistance. At least one quarter of donor budgets – some USD19bn in 2004 – is spent in this way: on consultants, research and training. This is despite a growing body of evidence – much of it produced by donors themselves and dating back to the 1960s – that technical assistance is often overpriced and ineffective, and in the worst cases destroys rather than builds the capacity of the poorest countries. Like a relic from an earlier age, technical assistance has been largely insulated from donors’ efforts to improve the quality of their aid and to act on the widely advertised principles of ownership and partnership. Too much of it continues to be identified, designed and managed by donors themselves, tied to donor countries’ own firms, poorly coordinated and based on a set of often untested assumptions about expatriate expertise and recipient ignorance. For all these reasons, technical assistance tends to be heavily overpriced and underevaluated and has proven stubbornly resistant to change. “ Greater use of local consultants The Action Aid report also notes that another reform shift that has taken place in some countries has been the greater use of local consultants, which can help to bring down costs and ensure greater understanding of the local political, social and cultural context. The data does not allow any rigorous assessment of the extent of this trend, but instances of significant change can be identified. For example, DFID’s office in India established a contract and procurement advice section in the late 1990s to streamline technical assistance procurement in line with DFID’s untied aid policy. This body has helped to develop a transparent and competitive market by mentoring the development of in-country services and developing specialist panels of consultants in areas where there is a lack of in-country capacity. As a result, the share of expatriate technical assistance providers fell from 90% to 55%, and there was a sharp fall in DFID’s procurement costs. Sweden has, according to its official statements, almost entirely abandoned all direct contracting of technical assistance by its aid agency SIDA. Sweden is officially committed to ensuring that technical assistance is procured, contracted and managed by recipients. Sweden’s official policy states that: “Sweden has in principle decided against a continuation of technical assistance, but it is still provided at a very reduced level. Sweden opposes the sending of bilateral technical assistance professionals for project implementation. Local consultants have been increasingly employed in the last years in Swedish technical assistance.” The Real Aid Paper concludes with a number of focused and helpful strategies for making technical assistance more effective as well as greater local capacity building. These include: Recommendations for aid recipient governments — Draw up capacity building plans based on national development strategies. Identify what, if any, role there is for donors to support these capacity building plans. Do not accept any donor technical assistance that falls outside these plans, or that there is no capacity to manage or make use of. Take responsibility for identification of technical assistance

projects, drawing up terms of reference, procurement, management, monitoring and evaluation in line with capacity building plans. — Ensure technical assistance contributes to capacity building. Ensure that all technical assistance is used to build capacity and not merely to fill gaps. Include performance criteria on capacity building as part of contracts, and terminate any projects that fail to meet these criteria. Take account of the need for technical advisers to understand the local political, social and cultural context. Ensure that more gender disaggregated impact assessments of projects are carried out, make the findings publicly available and ensure the lessons learnt are incorporated into the design of subsequent projects. Provide the right incentives for staff to build their capacity and to utilize the skills gained. — Ensure transparency and accountability in the use of resources, both donor and government. Ensure that procurement is carried out according to competitive principles. Report on the use of funds to parliament, NGOs, women’s groups, media and the general public. — Ensure that women’s rights are fully taken into account, including in project design, consultant selection, identification of beneficiaries of training projects and ultimate beneficiaries of reforms. Recommendations for donors — Allow southern countries to take the lead in the capacity building process. Pledge the finance necessary to support the government’s capacity building plan, in a way that is fully untied, predictable, co-ordinated and channelled through a host government managed fund. Provide 100% of technical assistance flows through untied, government led capacity building mechanisms and allow the country to spend the funding on their priorities, enabling them to take account of the opportunity costs of spending money on technical assistance. Do not provide any technical assistance outside of national capacity building plans, or which there is no capacity to strategically manage or make use of. — Make maximum use of country systems, including for procurement, financial management and reporting. Where domestic stakeholders believe that there is a significant risk of resources being diverted, donors may need to use pooled mechanisms for procurement and financial management outside of country systems. However, this should only occur in exceptional circumstances, on an interim basis. — Do not use technical assistance to either substitute for or complement conditionality. Advisers should offer a range of policy options to governments to enable them to assess the implications of the various choices open to them, including the likely impact on women and girls. — Be fully transparent, to both citizens and poor countries, about funding for technical assistance and its impact, including on women and girls.

AT Capital Weekly Update 11

15 September 2008
Recommendations for the international community — Ensure greater cost effectiveness, by ensuring that all technical assistance contracts are fully competitive and that bids are made fully transparent. Encourage competitive domestic, regional and international markets for technical assistance provision. Improve provision of information on potential contractors and their quality standards, including new start-up businesses. Invest more in local research institutes. Support the development of local contractors in southern countries. — Strengthen the targets agreed under the Paris Declaration. The new target should read that, by 2010, 100% of technical assistance flows should be provided through untied, government led capacity building mechanisms which allow the country to spend the funding on other areas. There should be annual reporting on progress towards this objective, on a donor-by-donor basis. — Collect and make available more data on donor-by-donor spending on technical assistance and the gender disaggregated impacts of such spending. Recommendations for civil society organisations — Ensure that any technical assistance either provided or used by CSOs is locally driven, has capacity building as an explicit aim, and prioritises the rights of women and girls. — Do not subcontract as providers of donor-funded technical assistance except in situations where there is strong demand from government, and a clear plan for transferring skills to strengthen permanent civil service posts. Promote the use of local experts and local knowledge. — Act as a watchdog to ensure that donors, governments and the international community are using technical assistance to build sustainable capacity, in an accountable and transparent manner. And finally – some foreign aid humour! Appendix

The UK, the World Bank, Asian Development Bank and Japan have developed a joint strategy approach (see Annex A). This mirrors our close working with these partners across South Asia. The joint strategy aims to maximise aid impact by sharing Analysis, dividing responsibilities and reducing transaction costs for Government and donors. Each partner has agreed with Government which sector/policy issues it will lead, which it will play a supporting role, and which it will not engage with. We are leading on support to extreme poor, governance and pro-poor private sector growth. We support the national health sector programme (World Bank lead) and the primary education sector programme (Asian Development Bank lead). We are not directly involved in agriculture (World Bank leads) or major infrastructure transport (Asian Development Bank lead). The table below sets out the agreed division of lead responsibilities.

Lead responsibilities of the joint strategy partners in Bangladesh Poverty monitoring, livelihoods for the extreme poor, access to justice, strengthened human UK security, public expenditure and financial management reform, participatory governance. Trade, labour force, banking sector, microfinance, agriculture, environment, health, water and sanitation, justice system, tax, procurement, local governance. Power, ports, roads and railways, urban infrastructure primary education, AntiCorruption Commission. Rural infrastructure, indigenous people, private sector development.

The World Bank

Asian Development Bank


AT Capital Weekly Update 12

15 September 2008

Market news • Many Z category companies are non-existent

Stock Market Weekly
DSE performance: 52 weeks

State-owned banks cut capital deficit

Book-building for IPO within 3 months Square Pharma marks its footsteps in Hong Kong

DSE performance: 30 days

Regional stock market performance (last week)

Market summary
Index performance Opening of this week Closing of this week Change within a week (%) Change within a week (Point) DSE General Index 2,803.0 2,850.2 1.7% 47.2 This Week 5 14.52 253 51 126 25 Issues Advanced Declined Unchanged Not Traded Last Week 5 14.44 202 40 82 16 This Week 121 118 12 37 DSE 20 2,410.0 2,442.3 1.3% 32.3 % Change 0.6% 25.3% 25.3% 54.0% 54.0% Last Week 117 129 5 37

Valuation snapshot
Sector P/E Banks Cement Ceramic Engineering Food & Allied Fuel & Power Insurance Investment IT Jute Miscellaneous Paper & Printing Pharmaceuticals Service & Real Estate Tannery Textiles Apr-08 22.2 14.7 43.7 38.9 28.2 25.8 28.1 64.9 18.4 16.4 23.0 9.2 26.7 20.5 25.1 14.9 May-08 22.6 17.6 42.7 41.4 28.5 26.2 32.4 65.2 17.6 16.0 25.9 9.5 29.8 19.5 23.1 14.4 Jun-08 21.7 12.4 42.0 39.1 13.2 23.6 26.9 53.1 20.0 16.0 23.2 9.2 28.1 20.8 19.8 15.2 Jul-08 19.2 11.2 50.3 38.4 19.3 16.1 22.8 33.5 20.3 16.3 25.2 7.9 25.6 20.5 21.3 16.3

Capitalization and turnover Number of Trading Days Market Capitalization (USD bn) Total Turnover (USD mn) Daily Avg. Turnover (USD mn) Total Volume (mn) Daily Avg. Volume (mn) Weighted avg. P/E Ratio* This Week Last Week % Change *Weighted on Market Cap. 20.63 20.26 1.83%

Source: Dhaka Stock Exchange

AT Capital Weekly Update 13

15 September 2008 Weekly Stock Market Commentary
The stock indices gained for the third consecutive week. The benchmark DSE General Index (DGEN) gained 47 points during the week to close at 2,850, 2% higher than previous week’s close. Dr Salahuddin Ahmed, the CEO of DSE, attributed the recent gains largely to retail speculation. He told the media that, “more than 80 percent of the investment mostly by retail investors went on speculative side." The recent uptrend is due mainly to high levels of trading activities around 15-20 stocks, some of them Z category stocks. The banking sector, which accounts for the majority of market capitalization, was out of favor in recent weeks. Though almost all the private commercial banks are already listed, the banking sector continues to supply more than 50% of the new securities to the market, by issuing stock dividends and right shares. Banks accounted for almost all the right issuances this year. This week the Social Investment Bank, a Sharia based bank, declared that it will issue right shares at a ratio of 1:1. The current market capitalization of Social Investment Bank is BDT 4.73bn (USD 69mn) (considering the 17% stock dividends already declared). A 1:1 right issuance will increase supply of securities significantly in the market where a BDT 500mn (USD 7.3mn) IPO is considered to be large. In an effort to strengthen its Islamic credentials, the Social Investment Bank also changed its name to Social Islami Bank - Shariah based banking in Bangladesh is generally perceived to be more lucrative than conventional banking. Dhaka Bank, a private commercial bank focusing mainly on conventional banking, has recently started offering Islamic banking services from all of its branches. Earlier it used to offer Islamic banking from selected outlets. Five "Z" category shares (Saleh Carpet, Shinepukur Holdings, Progressive Life Insurance, BD Luggage and Beximco Fisheries) featured on the list of top 10 gainers this week. 92 stocks on DSE belong to the Z category. According to DSE, a company is relegated to Z category for one of the following reasons: 1) it has failed to hold the current annual general meeting; ii) it has failed to declare any dividend; iii) it is not operational continuously for more than six months; iv) its accumulated losses after adjustment of revenue reserves, if any, is negative and exceeds its paid up capital. One would expect Z-stocks to be at the bottom of the list of any investors’ picks, but with the free floats of the Z category shares being small, share prices can be easily influenced and manipulated. This coupled with limited knowledge of the risks in investing in such companies, has meant that some retail investors have see an opportunity for gains. We feel exchanges should take tougher action on these companies and suspend trading, due to market distortions and the risk for investors. An example: Saleh Carpet, a Z category share and this week’s top gainer with a 59 percent increase. A DSE investigation revealed the company's registered corporate office in Chittagong remained closed since 2003. Listed with the DSE in 1995, the company submitted its last audited accounts to DSE for the year 2001, reporting a net loss of BDT 2.86mn and an accumulated loss of BDT 1,047mn till AT Capital Weekly Update

December 31, 2001. The DSE investigation also found that the company has bank liabilities (to state owned banks) of BDT 3bn (US$43.9 million). It is questionable that it has any operations at all! Rupali Bank was the top loser this week. Rupali’s losing streak started when the trading of its share recommenced in early June after the privatization effort of the bank failed. Rupali’s DSE price is still 58% higher than its price on CSE. Rupali’s share price on DSE would have adjusted close to its price on CSE if there was no circuit breaker on its shares on DSE. The inevitable decline of Rupali share price on DSE will make a significant impact on the indices (Rupali is the 6th largest company in terms of market capitalization).

Stock Market News
Many 'Z' category companies are non-existent
The Financial Express, Saturday, September 13, 2008

Seventeen Z-category companies out of the 28 surveyed by the Dhaka Stock Exchange (DSE) have been found inoperative for years. The 17 companies raised a total of BDT 540.5mn (USD 7.89mn) from the primary market between 1983 and 2002. Of the remaining 11, only two are fully operational and nine partially.

Book Building for IPOs

The Daily Star, Monday, September 15, 2008

Book-building, a modern and widely practised price fixing mechanism for IPO, will be introduced within three months in a bid to encourage the private sector entrepreneurs to list their companies on the stock exchanges, the Securities and Exchange Commission chairman said yesterday. “Although there is a scope for further modification in the draft of the book-building system, it is in the final stage. We will now work to transform it into legal form and hope we can introduce the system after two or three months,” said the SEC Chairman. Faruq Ahmad Siddiqi. The SEC chief said the country's capital market is dominated by financial sector companies, as banks, financial institutions and insurance companies have been listed on the stock exchanges to fulfill regulatory requirements. “Apart from this, as many as five state-owned enterprises offloaded shares during the last couple of years. But, the private sector companies are not being listed or raise capital from the stock market with that pace,” he said. The reasons behind the private sector entrepreneurs' unwillingness to list their companies on the stock exchanges are that they do not want to share their family business with others, lack of knowledge about the capital market, and reluctance to disclose their financial statements, the SEC chief said. “Another major reason is the absence of a fair and modern pricing mechanism. In most cases, the entrepreneurs feel


15 September 2008
they will not get accurate price for their companies' shares,” Ahmad said.


Saleh Carpet trade on DSE suspended

The Daily Star, Wednesday, September 11, 2008
Dhaka Stock Exchange suspended the trading of Saleh Carpet, a Z list company after finding some irregularities in the company. The company has not been running any corporate office since 2003 and not submitting any financial report to the bourse or the capital market regulator since 2002. Notably, Saleh Carpet owes BDT 4.72bn (USD 0.07bn) to Bangladesh Shilpa Bank, Bangladesh Shilpa Rin Sangstha, Investment Corporation of Bangladesh and Sonali Bank. Accumulated losses stood at BDT 1.05bn (USD 0.02bn)as of December 31, 2001. Share prices rose constantly for the last two weeks. This abnormal price jump forced the DSE to stop the company's trade. http://www.thedailystar.net/story.php?nid=54261 GP shareholders promise to put IPO beyond dispute

The Daily Star, Tuesday, September 10, 2008

Grameenphone shareholders have committed to keeping the share-offloading issue beyond internal disputes, indicating that the process of largest-ever initial public offering (IPO) will get through. In a joint statement, Telenor and Grameen Telecom dismissed the uncertainty over the USD300mn share offloading. Norway's Telenor owns 62 percent shares, while Grameen Telecom holds the remaining stake in Grameenphone, launched in 1996. Telenor controls the management of the country's largest cellphone company. Earlier, both the parties had ended up in conflicts on a range of issues, which created speculation of uncertainty over the IPO, scheduled to come through this month. http://www.thedailystar.net/story.php?nid=54099

AT Capital Weekly Update 15

15 September 2008 DGEN Performance LTM

DGEN Performance YTD

Turnover leaders (All figures in mn) BDT 1,842 Titas Gas 1,005 BEXIMCO 948 ACI Limited. 934 ICB AMCL 2nd NRB M.F. 916 Grameen One: Scheme2 598 Lankabangla Finance 495 Aims 1st M.F. 455 Beximco Pharma S. Alam Cold Rolled 440 Steels Ltd. 409 Union Capital Market cap. by sector* Banks Fuel & Power Pharmaceuticals Cement Insurance Miscellaneous Engineering Foods Textile Tannery Service & Real Estate IT Ceramics Paper & Printing Jute Total

Best performers* USD 26.9 14.7 13.9 13.6 13.4 8.7 7.2 6.6 6.4 6.0 Saleh Carpet Sinobangla Industries Grameen One: Scheme2 ICB AMCL 2nd NRB M.F. Shinepukur Holdings Pragati Insurance Progressive Life Bangladesh Luggage Beximco Fisheries Aims 1st M.F. % Change 59.3 29.7 26.8 26.3 20.7 19.6 18.7 16.7 15.8 14.8

Worst performers* % Change Rupali Bank -22.3 BCIL -12.4 Sonargaon Textiles -12.1 ICB Islamic Bank Ltd. -9.9 Maq Enterprises -9.4 Samorita Hospital -9.4 Lexco -8.5 Amam Sea Food -7.9 Safko Spinnings -7.1 Standard Ceramic -6.8
*By closing price Source: Dhaka Stock Exchange

Source: Dhaka Stock Exchange

52.6% 12.2% 10.4% 5.7% 5.7% 3.0% 2.6% 2.4% 2.1% 1.5% 1.0% 0.5% 0.1% 0.1% 0.03% 100%
*As of July 31, 2008

Correlation with other Indices*

S&P 500
S&P500 Sensex NIKKEI225 KSE100 SSECI FTSE100 Hangseng DSE 1 0.49 0.40 0.13 0.28 0.81 0.65 0.10

1 0.50 0.31 0.41 0.48 0.58 0.14


KSE 100


FTSE 100



1 0.10 0.22 0.41 0.46 0.09 1 0.04 0.21 0.09 0.06 1 0.38 0.50 0.03 1 0.73 0.13 1 0.11 1

* Based on the last 80 months’ USD returns
Source: AT Capital Research

Research Team
Professor Jahangir Sultan Senior Advisor jahangir.sultan@at-capital.com Rashed Hasan Research Associate rashed.hasan@at-capital.com Shahidul Islam Investment Manager shahid.islam@at-capital.com Syed Najibullah Research Assistant syed.najibullah@at-capital.com

AT Capital Weekly Update 16

15 September 2008


Export performance across different sectors (USD mn)
9-Sep-07 Forex reserves (USD mn) USD-BDT average rate Call money rate (%) 4,931.14 68.7000 7.05 Aug-07 Remittances (USD mn) Annual percentage change 470.95 -0.06 Jun-07 Imports (USD mn) Annual percentage change Exports (USD mn) Annual percentage change Tax revenue (USD mn) Annual percentage change 1,521.00 9.67 1,218.03 9.52 438.06 22.55 30-Jun-08 6,148.82 68.5297 4.78 Aug-08 732.98 55.64 Jun-08 2,156.60 41.79 1,469.51 20.65 541.77 23.67 9-Sep-08 5,245.21 68.5200 8.99 2007-08 7,914.78 32.39 2007-08 21,629.00 26.07 14,110.80 15.87 6,906.54 27.06

Market news
• • Excess liquidity of banks declines Bangladesh Bureau of Statistics set to go for new CPI and base year • • • • Tax revenue collection rises 19% Banks warned of risky lending Petroleum prices to be adjusted in every 3 months Bangladesh Petroleum Corporation (BPC) plans to set up deep sea oil jetty

Latest Treasury yields
Weighted average yield 7.77% 8.01% 8.51% 10.60% 11.72% 12.14% 13.07%

Source: Selected Indicators by Bangladesh Bank, 10 Sep 2008

Auction date 7-Sep-08 27-Jul-08 7-Sep-08 19-Aug-08 2-Sep-08 9-Sep-08 26-Aug-08

Tenor & security type 91-day T-bill 182-day T-bill 364-day T-bill 5-year T-bond 10-year T-bond 15-year T-bond 20-year T-bond

Top exported items (USD mn)

Source: Bangladesh Bank
S Adeeb Shams Research Associate


AT Capital Weekly Update 17

15 September 2008 Economic News
Excess liquidity of banks declines
The Financial Express, Saturday September 13, 2008

collected revenues amounting to BDT 70.9bn (USD 1bn) in the July-August period of the 2008-09 fiscal, while the amount was BDT 59.6bn (USD 871mn) in the earlier period. The government has set a tax revenue collection target at BDT 545bn (USD 8bn) for the 2008-09 fiscal year.

Liquid assets of scheduled banks stood at BDT 483.8bn (USD 7.1bn) as at 30 June 2008, against BDT 448.4bn (USD 6.5bn) at the end of June 2007, an increase of over BDT 35.4bn (USD 517mn), according to Bangladesh Bureau of Statistics. Excess liquidity of scheduled banks fell to BDT 129.9bn (USD 1.9bn) as at 30 June 2008, from BDT 142.79bn (USD 2.1bn) at the end of June 2007, according to a Bangladesh Bank review. Total SME loans increased by 11.1% in the year to over BDT 350.37bn (USD 5.1bn) as at 30 June 2008. Institutional category-wise SME loans rose at the end of June 2008 compared to March 2008, in foreign banks by 20.7%, private banks by 17.5%, non-bank financial institutions by 6.3%, state-owned banks by 3.3% and specialised banks by 1.5%. Disbursement of industrial term loans during April-June 2008 stood at BDT 55.8bn (USD 814mn) compared to BDT 49.1bn (USD 717mn) during January-March 2008. Recovery of industrial term loans increased to BDT 39.2bn (USD 572mn) during April-June 2008, compared to BDT 37.7bn (USD 551mn) during January-March 2008.

Bangladesh Bureau of Statistics set to go for new CPI and base year
New Age, Friday September 12, 2008

The Bangladesh Bureau of Statistics is set to revise the current consumer price index with an updated base year and incorporation of changes in lifestyle, consumption patterns and a widened food basket. According to a BBS official, the new CPI, with an updated base year of 2005-06, is to be prepared from next month. CPI is presently measured with 1995-96 as the base yearand consumers' lifestyles and consumption patterns have dramatically changed over the years. Unnayan Shamannay, a local research organisation, recently calculated the average inflation rate to be at 22% during the last fiscal year, while it was officially announced to be around 10%. The new CPI is to include 103 new items in the food basket for rural areas and 120 for urban areas.

Tax revenue collection rises 19% The government's overall tax-revenue collection grew by nearly 19% during the first two months of the current fiscal year, compared to the corresponding period during the last fiscal year, reflecting a lower than expected rate of growth, according to official sources. The National Board of Revenue

AT Capital Weekly Update 18

15 September 2008

Banks warned of risky lending

Sector News
Agriculture Tea exports rebound on rising output
The daily star, Tuesday, September 09, 2008 The Daily Star, Friday, September 12, 2008

Tea exports have increased this year with an increase in domestic production (up 6.2% on the year) and competitive pricing in international markets. Export earnings from tea stood at USD 14.89mn in 2007-08, up 114.55 percent from USD 6.94mn in 2006-07. Total production of tea stood at 58.83mn kg in 2007-08, up from 55.42mn kg last year. Export earnings fell sharply in 2006-07, due to a shortfall in tea production, which consequently drove tea prices up. While Pakistan is the biggest market for Bangladesh's tea, Afghanistan, Kazakhstan, Saudi Arabia and the United Arab Emirates are also major markets for local tea.

Bangladesh Bank (BB) has advised commercial banks not to do any lending violating the core risk guidelines. The central bank also said the credit deposit ratio should be below 82 percent. The advice followed separate meetings between the central bank and two commercial banks-- AB Bank and Eastern Bank. The meetings are part of the BB move to protect the banks from doing risky lending. More than 70 percent banks exceed this limit. AB Bank's lending was 85 percent of its deposit and Eastern Bank's 97 percent. Out of 48 banks, credit deposit ratio of eight banks is more than 100 percent, while that of 11 other banks is more than 90 percent. The ratio is more than 82 for the balance.

Shrimp industry facing setback

The Financial Express, Sunday, September 07, 2008
The shrimp industry, the second biggest forex earner after RMG, is facing serious production setbacks due to widespread virus infections affecting the shrimp stock. There also concerns over fry supplies following indiscriminate catching of immature fries some fishermen and mother shrimps i being caught by foreign fishing trawlers. According to District Fisheries Department shrimps were cultivated on about 70,000 hectares of land this year and a target was set to produce 18,000 tonnes of shrimp worth about Tk 9.0 billion (USD 131.44 mn).
http://www.thefinancialexpressbd.info/search_index.php?page=detail_news&news_id=44897 http://www.thefinancialexpressbd.info/search_index.php?page=detail_news&news_id=44848

Infrastructure & Energy ATC Comment We welcome the tender evaluation committee’s pragmatic recommendation for the Powertek bid for the 450MW Bibiyana independent power plant consortium, despite issues with pricing. With demand increasing 8% per year from a base that is significantly undersupplied, capacity generation constraints need to be resolved as a priority. This case also raises issues around government subsidisation of fuel costs to consumers. The Powertek consortium has offered to sell electricity to the Bangladesh Power Development Board (BPDB) for 4.5394 US cents a kilowatthour - almost double the amount than the Bangladesh Power Development Board (BPDB) buys electricity from the 450MW Meghnaghat and 360MW Haripur independent power plants installed in 2001. The government in the poverty reduction strategy paper (PRSP) has set a target of providing over 2.6mn new electricity connections between 2009 and 2011 and increasing the generation capacity by an additional 1,700MW. While we feel connecting 2.6mn customers is an admirable target, it seems ambitious given existing consumers do not receive uninterrupted electricity supplies. Current issues of scarce gas resources and unexploited coal reserves are particularly prescient. We feel efforts should be prioritized: 1) excavation of existing resources including coal; 2) exploration of new primary sources ; 3) generation of energy; 4) ensuring quality and uninterrupted electricity to the existing consumers; and 5) adding new consumers by expanding the transmission and distribution network Infrastructure & Energy News Prices of petroleum fuel to be adjusted in every three months
The Financial Express, Sunday September 14, 2008

Banking State-owned banks cut capital deficit
The Daily Star, Friday, September 12, 2008

Three state-owned commercial banks cut their capital deficit by BDT 62.2bn (USD 0.91bn) in the three months to March, turning cumulative losses into assets through a valuation adjustment. After a fall in the shortfall, the banks' integrated capital deficit stood at BDT 9.6bn (USD 0.14bn) at the end of March, down from BDT 71.8bn (USD 1.05bn) in December 2007. According to a quarterly evaluation report by Bangladesh Bank, the banks counted their integrated losses as 'goodwill' and converted the losses into 'other assets'. After the end of December, the banks transferred the cumulative losses of BDT 87.91bn (USD 1.28bn) into assets. Sonali Bank converted BDT 65.7bn (USD 0.96bn) of cumulative losses into assets, followed by Janata Bank BDT 8.9bn (USD 0.13bn) and Agrani Bank BDT 13.3bn (USD 0.19bn).

The government is likely to introduce a permanent pricing formula on the sale of petroleum fuels on the domestic market through periodic adjustments. The Energy Division of the Power, Energy and Mineral Resources Ministry is now

AT Capital Weekly Update 19

15 September 2008
devising a formula to provide a permanent solution to the problem that government has been facing for long in dealing with the fuel-price adjustments. The Chief Adviser's Special Assistant for Power and Energy, M Tamim said that the pricing would be adjusted every three months if the gap between local and international market prices are more than 2%. The government enhanced the prices of all kinds of petroleum fuels by about 35% with effect from July, 2008 when the overseas petroleum prices was nearly USD 150 per barrel. International price levels have come down to below USD100 currently.

into 28 exploration blocks. India and Myanmar which have discovered huge gas reserves in their parts of the Bay opposed the bids, stating they would not allow any companies to search hydrocarbon in the disputed blocks bordering their territory. The Chief Advisor's special assistant for energy and power M Tamim had earlier said the dispute over maritime boundary with the neighbours would be resolved in line with relevant international law and bilateral deals. He also said many countries like Vietnam, China, Japan and Thailand have similar disputes, but these have not hampered global oil and gas companies' exploration of hydrocarbon there.

Providing 2.6mn new electricity connections in 3 years targeted
The Financial Express, Sunday September 14, 2008

Bangladesh Petroleum Corporation (BPC) plans to set up deep sea oil jetty
New Age, Sunday September 14, 2008

The government has set an ambitious target, in next poverty reduction strategy paper (PRSP) to provide over 2.6mn new electricity connections by installing 50,000km of distribution lines acrossthe country in the three years and a target of generating 1,700MW additional electricity in its three years implementing period. According to the PRSP document: • the Rural Electrification Board (REB) would connect 2.0mn new consumers by expanding 40,000 km of distribution lines from FY2009-2011; and • the Power Development Board (PDB) will give 0.4 mn new connections by expanding 6,000km of distribution lines and other power distributing agencies; and • Dhaka Electricity Distribution Company Ltd (DESCO) and West Zone Power Distribution Company Ltd. will connect a total of 0.2mn consumers by installing 4,000km of distribution lines. The PRSP for the financial year 2009 to FY2011 is now awaiting approval of the government's highest body –The National Economic Council (NEC).

The Bangladesh Petroleum Corporation (BPC) is planning to set up a deep sea jetty to facilitate the unloading of imported crude oil from mother vessels and directly pump it to the Eastern Refinery through a pipeline. ‘It will save a huge amount of money we had to pay for transporting crude oil by lighter ships from mother vessels to the refinery,’ said a senior BPC official. The BPC is awaiting approval to prepare a feasibility study from relevant authorities. The Islamic Development Bank has already agreed to finance the project. A 4-member BPC team headed by its chairman went to India by the invitation of Bharat Petroleum Corporation Ltd to visit and learn about unloading and operational methods used by its Kochi Refinery Ltd.

The Daily Star, September 8, 2008

BDT 1.2bn project for export infrastructure development

Dhaka-Delhi talks on maritime boundary disputes tomorrow
The Financial Express, Sunday September 14, 2008

An export infrastructure development project worth BDT 12bn (USD 174mn) has been approved to reduce the growing pressure on Chittagong port infrastructure as demand increases. The project, which includes an inland container depot (ICD) at Dhirashrom near Tongi, construction of double railway lines from Chittagong Port to Faujdarhat, and procurement of 10 railway engines and 120 flat wagons, has received the approval of the project committee of the Planning Commission. The process for approval of the export infrastructure development project began in 2003but was delayed. Construction work under the project will begin in November 2009 with completion planned for 2014, Bangladesh Railway sources said. Following completion, 15 percent of the containers in Chittagong will be handled through the ICD by 2016 and 30 percent by 2026. The country's first ICD was constructed at Kamalapur in 1987 with capacity of 90,000 TEUs. In fiscal year 2007-08, a total of 82,000 containers were handled in the ICD. However this is only 10% of the containers handled in the Chittagong Port.

Bangladesh and Indian officials will meet in Dhaka on September 15 to end an impasse over maritime boundary, which has been in place for nearly three decades in an attempt the remove the main obstacle to the country's offshore search for oil and gas. The meeting was convened after New Delhi strongly opposed Bangladesh's move to lease out offshore blocks close to India's maritime territory for exploration. Although India and Myanmar share the hydrocarbon rich Bay of Bengal with Bangladesh, they haven't demarcated the sea boundary yet, resulting in the recent disputes over Dhaka's hydrocarbon exploration bids in its offshore blocks. The disputes arose in February 2008 after the state-owned Petrobangla invited bids from foreign companies for exploration in the Bay, after it divided the offshore territory AT Capital Weekly Update


15 September 2008
Tender body advises 450MW Bibiyana IPP award for lone bidder
The New Age, Thursday September 11, 2008

BERC extends time further for licences
The Financial Express, Thursday September 11, 2008

The tender evaluation committee for the 450MW Bibiyana independent power plant has recommended awarding the tender to the lone bidder Powertek consortium. Last week, the consortium offered to sell electricity to the Bangladesh Power Development Board (BPDB) for 4.5394 US cents a kilowatt-hour which is almost double the amount than the Bangladesh Power Development Board (BPDB) buys electricity from the 450MW Meghnaghat and 360MW Haripur independent power plants installed in 2001. ‘We will also seek a decision from the committee on mitigating losses the BPDB will be incurring by buying electricity from the Bibiyana plant as the power board’s selling price to consumers is much lower than that of the Powertek offer,’ said an Power Division official. He also said the government would either need to further subsidise the power board or increase customer tariff at consumer level for buying electricity from Bibiyana.

The Bangladesh Energy Regulatory Commission (BERC) has extended further the time limit by two months for obtaining operating licences for captive/ standby electricity generators. The BERC set April 30 as the initial deadline for seeking licences for use of captive generators - this was later extended twice until August 31, 2008. The BERC Chairman said the Commission will take necessary action against the users who will fail to obtain licences for their captive and standby generators within the extended timeframe. The Commission received around 200 applications for issuing licences until August 31, out of which it had already issued around 100 licences.

Petrobangla Wants Guarantee from Cairn Energy
Energy Bangla, Tuesday September 9, 2008

US firm to help BGFCL quantify gas reserves

Petrobangla has asked for a guarantee from Cairn for continuing gas production from the Sangu gas field before giving any approval to company's proposal to spend between USD 7.31mn and USD 9.30mn for well intervention work at Sangu. In a joint meeting with Cairn, Petrobangla officials on September 8 asked the company to a submit proposal showing a firm assurance of the possibility of increasing gas production from the field as earlier intervention works were not fruitful. Cairn has performed the same work twice in the last four years but failed to increase gas output.
http://energybangla.com/index.php?mod=article&cat=GasSector&art icle=941

The Financial Express, Thursday September 11, 2008

The state-owned Bangladesh Gas Fields Company Ltd (BGFCL) has recently signed a contract with Houston-based Geotrace Data Integration Services Ltd to measure remaining gas reserves in their operational gas fields. Geotrace will provide its Tigress three-dimensional (3D) interpretation software to BGFCL to help quantify the gas reserves in its decade old gas fields that account for around 39% of the country's gas production.

Pharmaceuticals ATC Comment

39% 50% 9% 2%

We continue to be encouraged by Bangladesh’s leading pharma companies and their push into new markets. Already leading the way amongst LDCs, the recent MHRA accreditations awarded to Square, Eskayef and Renata, demonstrate the potential for the Bangadesh pharma sector to position itself as a preferred manufacturing destination globally. This week, Square started exporting to Hong Kong, who follows patent protection regulations. Over the last few years, Bangladesh has proven its ability to efficiently manufacture good quality generics at a low cost. Many developed nations are looking to offshore their lower margin generic production activities - international certifications like the UK MHRA approval are necessary to establish Bangladesh as a contract manufacturing hub. This week, according to an IMS report, the sector revenues grew by 10% year on year. While this remains positive, this represented a fall from the 15% growth in the prior year. Square continues to lead the pack with 18% market share, with Incepta at No 2 with 9% market share, pushing Beximco to third.

Source: Petrobangla
The Energy Ministry recently decided to conduct extensive seismic surveys in five of the largest state-owned operational gas fields expecting the reserves to be much higher than the initial estimations. The Energy ministry initially estimated the reserve of these fields at 11.42Tcf and after decades of consumption their net remaining recoverable gas reserves as on June 2007 would be around 7.70 Tcf. The seismic surveys will take three years to complete.

AT Capital Weekly Update 21

15 September 2008
It has been a tough period for Beximco with various political problems including the imprisonment of Director, Salman. F. Rahman. Managing Director, Nazmul Hasan revealed that Beximco has not been manufacturing at full capacity for the past year but hopes to regain the second position. Finally, local dominance has driven the only MNC, Sanofi Aventis out of the top ten. At the end of calendar year 2007, Aventis was positioned at eight, but is now absent from the top ten. Pharma News Square Pharma marks its footsteps in Hong Kong
The Financial Express, Sunday September 14, 2008

Renewable Energy Indian Cabinet Okays Biofuel Policy

The Daily Star, Sunday, September 14, 2008
The Cabinet has approved implementation of the National Biofuel Policy. The policy calls for scrapping taxes and duties on bio-diesel and declared goods status being conferred on bio-diesel and bio-ethanol and has set an indicative target to blend 20 percent ethanol in petrol and non-edible oils from plants like Jatropha in diesel by 2017. Declared goods status products attract a uniform central sales tax or VAT rate rather than varied sales tax rates effectively reducing the tax burden. http://www.thedailystar.net/story.php?nid=54580 Dhaka for multi-donor trust fund to tackle climate change

Square Pharmaceuticals Ltd, the market leader in the local pharma industry, has recently started to export drugs to Hong Kong. Square is was the first company in Bangladesh to attain the UK MHRA certification. Hong Kong, despite having a GDP per capita as high as BDT 2.8mn (USD 42,000), has a relatively small pharmaceutical market worth around USD 715mn which is comparable with the USD 600mn of Bangladesh. Square has already registered five products in Hong Kong and has more than 20 products awaiting registration approval authority of the Department of Health, Hong Kong.

The New Nation, Thursday, September 11, 2008

Finance Adviser, Dr ABM Mirza Aziz who led a 39-member Bangladesh delegation to the UK-Bangladesh Climate change conference, commented that Bangladesh would require 6bn USD over the next 15 years for a mitigation and adaption programme, as the UK made a fresh pledge of GBP 75mn pound to Bangladesh for climate change projects in the next five years. The Finance Adviser said the assessment is based on the five pillars - risk identification, strengthening emergency preparedness, infrastructure investment for risk mitigation, institutional capacity building and risk financing. The Adviser said despite the resource constraints, the Bangladesh government is committed to facing the challenge of climate change, and urged the international community to help implement the country Climate Change Strategy and Action Plan 2008. The Bangladesh government has also established a dedicated Climate Change Fund with an initial endowment of USD 45 million. The Adviser proposed the establishment of a Multi-Donor Trust Fund (MDTF) to supplement the government efforts that would be a window for the NGOs and CSs to directly have access to funds for climate related activities. http://nation.ittefaq.com/issues/2008/09/11/news0185.htm Telecoms BTRC unveils guideline on telecom infrastructure sharing

Square maintains lead, Incepta 2nd, Beximco slips to 3rd position
The Financial Express, Saturday September 13, 2008

The year-on-year turnover of around 255 local drug manufacturers grew nearly 10% in the fiscal year (FY) 200708 standing at BDT 40bn (USD 583.9mn). This figure is 1.2% less than at the end of the calendar year 2007 which was BDT 40.5bn (USD 591) according to IMS. Around 80% of the revenue is accounted by approximately the top 30 companies. Square remains the market leader with turnover of BDT 7.5bn (USD 109.5mn), representing growth of nearly 15% from last FY, and market share of over 18%. The top ten companies in order of rank are: Square Pharmaceuticals, Incepta Pharmaceuticals, Beximco Pharmaceuticals, Acme, Eskayef Bangladesh, ACI Bangladesh, Renata Pharmaceuticals, Aristo Pharmaceuticals, Drug International and Opsonin Bangladesh. Incepta revenues increased by 8% year on year and stands at BDT 3bn (USD 43.8mn) with a market share of 9.1%, . Incepta has moved up to the second position pushing Beximco Pharmaceuticals to third whose revenue dropped from BDT 4bn (USD 58.4mn) in 2007 to BDT 2.9bn (USD 42.3mn) in 2008. Beximco management have intimated that they expect to regain the second spot by October this year.

The Daily Star, Tuesday September 09, 2008

The Bangladesh Telecoms Regulatory Commission has finalized the guidelines for infrastructure sharing between telecom service operators. Under the guideline, telecom operators can share or lease both physical and non-physical infrastructure (including spectrum) to other operators. This move should help ease the capital expenditure burden of the 6 mobile and 12 fixed line telecoms companies. Spectrum constrained operators such as Grameenphone would benefit from leasing spectrum from other mobile companies while the likes of Teletalk- an operator with limited infrastructure, could take advantage of using base stations of other Telcos.

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15 September 2008
UAE-based Warid has recently signed an infrastructure sharing agreement with both CityCell and Banglalink. Under the deal, both companies are now sharing their base transceiver stations (BTS) and other infrastructure. The top three operators have already rolled out their network over and across the country - Grameenphone has 11,000 BTSs, followed by Banglalink's 5,000 and Aktel's 3,000. Grameen and Banglalink have also developed a fiber optic network.

Chinese co to invest BDT 340mn in a garment manufacturing industry at Karnaphuli EPZ

The Financial Express, Monday, September 8, 2008

A Chinese company, M/s. Blossom Textile Limited, plans to invest BDT 340mn to set up a garment manufacturing factory at the Karnaphuli Export Processing Zone. The factory will employee 2,000 Bangladeshis and 50 foreign nationals.

Textiles ATC Comment Troubles continue for the RMG sector. After weeks of labour unrest, concerns have taken a new twist, with global economic uncertainty finally starting to filter into Bangladesh’s RMG sector. Disappointing export figures for July-August (a 7% fall), coupled with Wal-Mart’s request for a 2% rebate on sales puts further pressure on the sector. We wait to see if the export decline is just a seasonal dip or more seriously the lagged effect from the US and European decline. Walmart currently buys USD 1.7bn from 200 RMG businesses – 2% of a very large number is significant. With falling sales, pressure on pricing and consequent margin pressure does not bode well for manufacturers needing to pacify workers who struggle to make ends meet – any wriggle room that was once there is fast diminishing. The BGMEA’s compliance audits are a welcome move – a move that will help BD protect and extend its global position. Implementing consistent measures to push more manufacturers to reach international standards and ‘ethical sourcing initiatives’ demanded by foreign buyers will increase export competitiveness. Malek Spinning Mills, one of the better performing mills in the textile sectors plans to IPO - a positive move for the listed textiles sector. While the sector leads exports, only a handful of high quality textile companies are listed, with the majority being low quality. Last year the Cotton USA Licensee Malek Spinning Mills Ltd. mill produced 12.58mn kgs of yarn and had a turnover of BDT 2.40bn. Their Salek Textile mill produces 42 tonnes of open end yarn per day. Global players are also continue to move to BD - both M/s. Blossom Textile Limited and M/s. Hun Hsin Textile Co. (BD) Limited announced plans to invest BDT 840mn in two EPZs. BGMEA asks PDB to ensure smooth power supply to RMG factories

Wal-Mart wants rebate on garment orders: Demand for 2 percent discount may hurt exports

The Daily Star, Monday, September 8, 2008

Wal-Mart, the world's largest retailer of clothing, has requested a 2 percent rebate on its current orders of Bangladeshi RMG products. According to an export-oriented garment factory owner, Wal-Mart had instructed him to give a 2 percent rebate on sales. Industry insiders said the USbased Wal-Mart buys RMG products worth $1.7 billion a year from Bangladesh, buying from more than 200 garment factories in Bangladesh. http://www.thedailystar.net/story.php?nid=53804 Taiwan to invest BDT 500mn in a textile yarn manufacturing industry at Comilla EPZ

The Financial Express, Tuesday, September 9, 2008

M/s. Hun Hsin Textile Co. (BD) Limited, a Taiwan-based company, plans to invest BDT 500mn to establish a textile yarn manufacturing factory at the Comilla Export Processing Zone. The company will create employment opportunities for 1,237 Bangladeshis and 11 foreign nationals.

BGMEA conducts social compliance audit on 1,381 factories

The Financial Express, Friday, September 12, 2008

The BGMEA, as part of ensuring social compliance, audited 1,381 member factories out of 2,435. The audit was carried out in collaboration with IFC Advisory Services for South Asia-South Asia Enterprise Development Facility (IFCSEDF). This monitoring data is now being stored in database software which will allow BGMEA to efficiently evaluate and assess compliance standards and take action to faciliate further improvement. This is the first comprehensive approach to evaluate the social compliance in the industry.

The Financial Express, Monday, September 8, 2008

Leaders of the BGMEA exchanged views with Power Development Board (PDB), Chittagong, on irregular power supply, excessive load shedding and various power related problems at the BGMEA regional office. According to BGMEA first vice president, due to such problems in Chittagong, RMG industrial units are compelled to use their own generators at a high cost. In response, PDB chief engineer said that enhancement of power supply in Chittagong is not possible without increasing the gas supply.

Malek Spinning Mills to float IPO

The New Age, Friday, September 12, 2008
The Malek Spinning Mills Limited has initiated a process to IPO by signing an agreement with Grameen Capital Management Limited to manage its the listing. Through preIPO private placement and IPO, the company is planning to raise a BDT 175bn fund for the implementation of company’s expansion programme and to set up chemical chip and fibre plants. 23

AT Capital Weekly Update

15 September 2008


Apparel export shows sluggish growth in Jul, Aug

The New Age, Sunday, September 14, 2008

The garment export sector has registered lower than expected growth in the first two months of the current fiscal year. Bangladeshi garment manufacturers received comparatively poor volumes of orders from US and EU buyers as demonstrated bya decline in Utilisation declarations (UD) in July and August. UD is the mandatory documentation which every exporter has to obtain after receiving confirmed orders from foreign buyers, from the BGMEA or BKMEA. While orders for certain knit products tend to be low at this time of year, there remain concerns that the global slowdown may impact the domestic garments sector. http://www.newagebd.com/2008/sep/14/busi.html

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15 September 2008

AT Capital Team – Dhaka
Managing Partner Partner Senior Advisor Senior Advisor Investment Advisor Investment Manager Investment Manager Research Associate Research Associate Research Associate Research Associate Office Manager Research Associate Research Associate Research Analyst Research Analyst Research Analyst Research Analyst IT Analyst Research Assistant Research Assistant Research Assistant Research Assistant (880-2)-8155144, ext. 132 (880-2)-8155144, ext. 109 (880-2)-8155144, ext. 108 (880-2)-8155144, ext. 113 (880-2)-8155144, ext. 121 (880-2)-8155144, ext. 122 (880-2)-8155144, ext. 123 (880-2)-8155144, ext. 127 (880-2)-8155144, ext. 128 (880-2)-8155144, ext. 130 (880-2)-8155144, ext. 131 (880-2)-8155144, ext. 132 (880-2)-8155144, ext. 135 (880-2)-8155144, ext. 137 (880-2)-8155144, ext. 125 (880-2)-8155144, ext. 133 (880-2)-8155144, ext. 138 (880-2)-8155144, ext. 139 (880-2)-8155144, ext. 140 (880-2)-8155144, ext. 136 (880-2)-8155144, ext. 136 (880-2)-8155144, ext. 136 (880-2)-8155144, ext. 136 ifty.islam@at-capital.com syeed.khan@at-capital.com akhter.ahmed@at-capital.com masud.khan@at-capital.com junaid.khan@at-capital.com shahid.islam@at-capital.com taufique.hasan@at-capital.com syeda.tasnuva@at-capital.com adeeb.shams@at-capital.com nahid.bari@at-capital.com emran.hasan@at-capital.com sohana.alamseraj@at-capital.com ahmad.sajid@at-capital.com rashed.hasan@at-capital.com tami.zakaria@at-capital.com abdullah.farooq@at-capital.com emrul.hasan@at-capital.com sanwar.ahmed@at-capital.com zahidur.rahman@at-capital.com ashek.haq@at-capital.com syed.najibullah @at-capital.com minul.islam @at-capital.com rasidul.hasan @at-capital.com

Ifty Islam Syeed Khan Akther Ahmed Masud Khan Junaid Khan Shahidul Islam, CFA Taufique Hasan Syeda Tasnuva Akhter S Adeeb Shams A. M. A. Bari Nahid Mohammad Emran Hasan Sohana Alam Seraj Ahmad Sajid S.M. Rashedul Hasan Tami Zakaria Abdullah-Al-Farooq M. Emrul Hasan Sanwar Ahmed Md. Zahidur Rahman Ashek Ishtiak Haq Syed Najibullah Minul Islam Rasidul Hasan

AT Capital Team – North America
Zarif Munir Professor Jahangir Sultan, Ph.D. M. Nasim Ali Iqbal Hussain Senior Advisor Senior Advisor Senior Advisor Senior Advisor zarif.munir@at-capital.com jahangir.sultan@at-capital.com nasim.ali@at-capital.com iqbal.hussain@doctors.org.uk

© Copyright 2008. Asian Tigers Capital Partners Limited, Level 16, UTC Tower, Panthapath, Dhaka – 1215, Dhaka, Bangladesh. All rights reserved. When quoting please cite “AT Capital Research”. The above information does not constitute the provision of investment, legal or tax advice. Any views expressed reflect the current views of the author, which do not necessarily correspond to the opinions of Asian Tigers Capital Partners or its affiliates. Opinions expressed may change without notice. Opinions expressed may differ from views set out in other documents, including research, published by Asian Tigers Capital Partners Limited. The above information is provided for informational purposes only and without any obligation, whether contractual or otherwise. No warranty or representation is made as to the correctness, completeness and accuracy of the information given or the assessments made.

AT Capital Weekly Update 25

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