DSE chief executive steps down (Author: Star Business Report)
The chief executive officer of the country's prime bourse has resigned from his post, ahead of his tenure's expiry.
Satipati Moitra, who took over as the CEO of Dhaka Stock Exchange on December 24, 2009 for three years, cited his deteriorating health as the reason for his resignation.
“The board accepted Moitra's resignation letter,” said Shakil Rizvi, president of the DSE.
Moitra, who joined the DSE in 2007 as chief financial officer of the bourse, submitted his resignation letter on Wednesday. Earlier on December 1 last year, Moitra wanted to step down, but continued the job on request from the DSE board.
Md Zahurul Alam, DSE's chief operating officer, will work as acting CEO of the prime bourse.
Salman joins DSE board as director (Author: Star Business Report)
Salman F Rahman, president of Bangladesh Association of Publicly Listed Companies, has been appointed as a director of the Dhaka Stock Exchange board, an official said yesterday.
Rahman has joined the DSE board as a “nominated director”, approved by the Securities and Exchange Commission, said Ahmad Rashid, a director of DSE.
Stockmarket reforms far from complete (Author: Star Business Report)
Structural reforms have not been put in place to restore order in the Bangladesh stockmarket following a record collapse last year, although some regulatory measures were taken, a global survey found.
A survey of World Economic Forum conducted in Bangladesh by Centre for Policy Dialogue (CPD) made the comments yesterday during the launch of the report.
The local think-tank conducted the survey for 2010 among 70 entrepreneurs and businessmen mostly in Dhaka.
A majority of the respondents expressed their concerns over developments in the capital market in 2010, when the market experienced an artificial rise of 82.8 percent between December 2009 and December 2010 before it was brought down to its knees.
The main index of the Dhaka Stock Exchange rose to a high of 8,918 points, only to see the key barometer come down to as low as 5,200 points in a period of two months.
Fifty-nine percent of the respondents pointed to ineffective rules and regulations as the main weakness of the market, while 76 percent pointed at weak monitoring and supervision by Securities and Exchange Commission, the market regulator.
Fifty-two percent of the respondents say the minority shareholders are less protected, while 67 percent refer to non-transparent rules and regulations and undue interference by influential quarters.
According to the survey, 80 percent of respondents blamed insider trading in the stockmarket. They also pointed fingers at weak financial auditing and reporting standards.
“After collapse of the capital market, not much focus was put on structural reforms, other than some regulatory measures,” said Khondaker Golam Moazzem, senior research fellow of CPD, while presenting the report.
India to pay no tax, but charges for cargo traffic (Author: The Daily Star---Rezaul Karim)
India is not willing to pay taxes to Bangladesh for goods' movement from one part of India to another or to a third country through Bangladesh linking the Chittagong and Mongla seaports.
However, New Delhi will pay charges for transportation, services and transit to transport goods through 15 routes, all linked to Chittagong and Mongla, and offered talks to Bangladesh to finalise the transit issues.
India gave the proposal through an official draft document styled 'Protocol between India and Bangladesh for arrangements for the use of Chittagong and Mongla ports by India”. The Indian High Commission in Dhaka sent the draft protocol dated December 7, 2010 that was received by the foreign ministry on March 29, 2011, suggesting signing of a deal for seven years with the provision of renewal for a further seven years on mutual consent.
Talking to The Daily Star, a senior official of the foreign ministry said though the title of the draft protocol talks about arrangements for the use of the Chittagong and Mongla ports, the document is not limited to issues on the use of ports, but also includes topics related to transit through Bangladesh.
The official said India in its detailed proposal mentioned customs and other procedures for import/export of goods from or to third countries by India and movement of goods from one part of the country to another through Bangladesh, identifying 15 rail and road routes for transit through Bangladesh.
The protocol has 10 articles where it contains the provisions for exemptions from customs duties except charges for transportation, services and transit.
It said the words 'Bangladesh customs duties' wherever it appears in the protocol would mean such duties, as are levies on import of goods into Bangladesh.
Regarding imports from a third country by India passing through the Chittagong and Mongla ports, the protocol said Indian imports will be allowed against import licences issued by the Indian government or letters of credit (LCs) of a commercial bank in India.
The protocol said, on arrival of Indian containerised cargoes, customs officials at the seaports would check the 'one-time-locks' on the containers. The customs officials will allow transportation of the containerised cargoes without examination if it is found intact. But in need of examination, the officials should communicate in writing, the protocol added.
If the 'one-time-lock' on the container is found broken or defective, customs authorities can verify the goods. In case of non-containerised cargoes, the customs house may examine a certain percentage of the goods to check whether it matches the customs declaration. On suspicion of pilferages, the goods may be subject to checks by Bangladesh customs, according to the proposal.
As per the draft protocol, India will submit necessary papers and full details of the LCs to Bangladesh customs to import goods from a third country. The importers and exporters will specifically mention to Bangladesh which route of the country is to be used.
According to Article 3 of the proposed protocol, authorities of the Chittagong and Mongla ports will provide warehouses, sheds and open space for storage of Indian cargoes. Berthing arrangements at the two seaports will have to be made for Indian consignments on a priority basis, it added.
The 15 rails and road routes for transit through Bangladesh, linking Chittagong and Mongla ports, are mentioned in Article 4 of the protocol.
The routes are -- Akhaura-Agartala (both rail and road), Sabroom-Ramgarh, Demagiri-Thegamukh, Bibir Bazar-Srimantpur, Belonia-Belonia, Betuli-Old Raghna Bazar, Chatlapur-Manu, Tamabil-Dawki, Borosora-Borosora, Haluaghat-Ghasuapara, Sunamganj-Shellbazar, Darshana-Gede (rail), Rohanpur-Singhabad (rail), Birol-Radhikapur (rail), and Benapole-Petrapole.
The proposed routes may be discontinued or new ones can be added upon mutual agreements, and the cargoes shall be allowed to move through alternate roads with prior permission if the specified roads are unusable.
Article 8 suggested formation of a joint committee to solve any problems that arise. Article 9 recommended formation of an inter-governmental committee which shall meet at least once in six months alternatively in Dhaka and New Delhi .
Tk 50,000cr estimated for infrastructure (Author: Porimol Palma--The DailyStar)
Bangladesh will require about Tk 50,000 crore over the next ten years to build infrastructure for transit to India, Nepal and Bhutan through its territory, a subcommittee formed by the government said in a study.
Stating that Bangladesh's road network being a two-lane affair and also because it is structurally weak, the committee said regional traffic has to be carried mostly by rail and inland water transport. However, initially the road network can be used on a limited scale in the first three years.
From the fourth year, the country can provide full transit subject to the development, upgrading and strengthening of ports and routes -- rail, road and waterways, according to the study that identified the transit routes, their present state, investment required and mechanism of cost recovery.
The subcommittee led by UNESCAP former Director Dr M Rahmatullah conducted it following a joint communiqué signed between Bangladesh and India in early 2010.
For transit to India, Nepal and Bhutan, the subcommittee identified seven core road routes, six core rail routes and three core inland water routes. Two rail routes and two inland water routes were earmarked for future development. Seven land ports were identified to facilitate transit traffic through the borders.
The study considered distance, travel time, cost advantage and possibility of putting them into operation in the shortest timeframe in selecting the routes.
The investment estimate was based on the current level of traffic and its growth, diverted transit traffic and its growth, present state of the routes and future demand to be created by national and transit traffic over the next ten years.
'The source of finance for road, rail and water routes and land ports will be a combination of government fund and multilateral/bilateral donor agencies.
However, Chittagong Port is able to finance its development from its own resources,' the committee said.
For cost recovery, it recommended a mechanism primarily based on the principle of 'full cost recovery', which includes the cost of putting the infrastructure in place along with the cost of maintaining and operating it.
The study considered railways and waterways the most cost-effective, environment-friendly, energy-saving and emphasised implementing some projects on a priority basis under a crash programme.
Transit promises bright business (Author: Rejaul Karim Byron and Rifat Munim)
Transit to India will prove profitable for Bangladesh but the service cannot be started in the next two years for a lack of necessary infrastructure on roads, water and rail routes, said Dr Mohammad Yunus, an expert on transit.
“If we decide to allow transit to India and start working today, it will take two to three years to activate it,” said Yunus, a senior research fellow at Bangladesh Institute of Development Studies and a member of the government committee on transit.
He noted that if the seaports, especially the Chittagong Port, are not stripped of politicisation, Bangladesh will not be able to utilise them as transit ports.
Yunus said the first three years will be spent entirely on building infrastructure, when no transit is possible. In the fourth and fifth years, 10 percent of transit traffic can start to move through the then completed roads, water and rail routes. From the sixth year, when work on necessary infrastructure is completed, transit traffic can begin to move in full swing.
“I think Bangladesh at this moment is not ready to sign a detailed transit treaty with any country because there has to be a number of protocols signed about the ports and their use, the amount of traffic to be diverted through individual rail, road and water routes,” he said. “The necessary homework that must be done before such a detailed agreement is yet to be done.”
“At present, may be, we can go for a framework agreement stating that we agree to allow transit facilities,” Yunus said.
He stressed that in order to take the Chittagong seaport and Ashuganj river port up to international standards, more investment is necessary.
“Dirty politics patronised by the political parties is a major obstacle to the development of our seaports,” Yunus said.
“By politics, I mean the frequent, unnecessary strikes and clashes in the name of trade unionism that are, in fact, guided by the major political parties for their specific goals. In order to get the fullest benefits from transit, side by side with investment, we must strip our ports, especially Chittagong Port, of dirty politicisation.”
During the tenure of the last interim government, the time required to unload goods was reduced from 14 days to three days, he mentioned.
The two seaports and one river port can be turned into the biggest business hubs of the country if this efficiency can be restored, he added.
Yunus, along with transport expert Dr M Rahmatullah, has worked extensively with many multinational organisations on regional connectivity. Referring to one of their joint studies, Yunus said in view of the fact that Bangladesh is a land-scarce country and most of its roads are dilapidated, 70 percent of transit traffic should be carried through the rail routes, 15 percent through water while the rest through roads.
“If we carry most transit traffic through the rail routes, then many of our unutilised rail routes will resume activities that will improve domestic transportation as well,” Yunus said.
Transit offers Bangladesh a unique business opportunity to trade in transport services, said Yunus. In his calculation, if transit is given, Bangladesh will make a net profit of $5 billion. However, there will be no benefit accruing in the first three years. From the fourth year, the country will begin to make profits.
After all routes are properly constructed to handle the extra traffic, about 18 million tonnes of cargo will be diverted through Bangladesh, which will also include Nepalese cargo that now uses Kolkata port, Yunus projected.
If India, Nepal and Bhutan are provided with transit, they must pay some fees to Bangladesh, he said. When their vehicles will pass through Bangladesh, they will require a number of services from Dhaka, he added.
The infrastructure the three countries will use will involve some costs on the part of Bangladesh and local customs department officials will have to be trained to ensure that the vehicles of those countries do not carry any arms.
Yunus said the government-appointed committee has fixed a draft bottom line service charges or fees for transit taking into account all service costs and expenditures on infrastructure.
If the transit fee remains higher than the bottom line, Bangladesh will benefit from allowing transit to the three countries, Yunus said.
Recent Budget Announcement (Author: BDStock.com-Amir J)
Recent Budget Announcement
Bangladesh FM has recently unveiled a Taka 163,589 crore (US$22
billion) budget for the financial year 2011-2012 last month aiming a record high 7 per cent growth and to increase spending on key sectors by nearly a third to tackle its acute power shortage, poverty and inflation.
Finance Minister Abul Maal Abdul Muhith announced the budget with a focus on employment generation, proposing a 23 per cent higher outlay for the next financial year, which is up by Taka 31,589 crore over the actual outlay of Taka 132,000 crore of the outgoing fiscal.
Simultaneously the inflation was also expected to ease slightly to 7.5 per cent against a revised target of 8 percent this year as price spiral of food strained government finances by amplifying its already huge subsidy bill.
Inflation soared to a 31-month high of 10.67 percent while foreign currency reserves were drying up against the backdrop of growing import costs and increasing bills for fuel subsidies.
FM Muhith said the targeted growth would be achieved through major spending boosts for energy and infrastructure - areas long seen as drags on the economy which would help attract more foreign direct investment.
But protection of the ultra poor against the backdrop of growing food price appeared to be a major concern of the proposed budget for the 2011-2012 fiscal starting from July 1 this year as nearly 40 per cent of the country's more than 150 million people live on less than $1.25 a day below poverty line.
A significantly higher allocation of Taka 50,642 crore for development expenditure for the third financial year of Prime Minister Shaikh Hasina’s ruling Awami League government that set a vision for upgrading Bangladesh to a middle-income status by 2021, coinciding with its golden jubilee year.
With an expansion of tax net by over 24 per cent to optimally finance the new national budget, he targeted the revenue income to be Taka 118,385 crore, apparently leaving a revenue surplus of Taka 30,534 crore for the next fiscal, starting from July 1, 2011.
The budget proposed allocation of Taka 140 billion ($1.9 billion) in subsidies for fuel, power, food and fertiliser in the coming fiscal while the subsidy bill in the outgoing fiscal blew out to Taka 143 billion from an original estimate of nearly 10.3 billion taka, largely due to higher global oil and commodity prices.
The budget expects the overall spending to increase 23 per cent in the coming fiscal to Taka 1.6 trillion with the government aiming to cap its deficit at 5 per cent of gross domestic product up from a revised 4.4 per cent of GDP in the outgoing 2010-2011.
The government has allocated Tk 510 crore in the proposed budget for 2011-12 fiscal in favour of science and ICT ministry especially for development of the ICT sector.Of the total amount, Tk 215 crore will be spent under the Annual Development Programme and Tk 295 crore under non-development sector. Finance minister Abul Maal Abdul Muhith made the announcement while placing the budget for the next financial year before Jatiya Sangsad.
The proposed budget kept a special allocation of Tk 100 crore for the ministry under the non-development sector to nurture the ongoing endeavours of digitising various systems.
In the revised budget of the fiscal 2010-2011, the total allocation for the ministry is Tk 427 crore. Of the amount, Tk 118 crore is under ADP and Tk 309 crore for non-development sector.
The proposed budget said the allocation for the ministry has been made to attain overall socio-economic development of the country through Science and ICT related research, development, extension and the successful application of these activities.
The proposed budget is less private sector-friendly. The same comes amid costlier credit, tight money supply, government's huge bank borrowing, uncertainty in gas supply and growing instability in politics.
Economists of the World Bank have expressed an opinion that the proposed Bangladesh budget for 2011-12 fiscal year is highly ambitious one but implementable provided the prerequisites are fulfilled.
They have highlighted that to enable 7 per cent GDP growth, industrialization and uninterrupted electricity supply have to be ensured, which means a smooth rolling out of power of newly created capacity.
Wednesday, August 3, 2011BusinessGreen light to NBR automation (Author: Rejaul Karim Byron)
Executive Committee on National Economic Council (ECNEC) yesterday approved the NBR Automation Project under which various activities will be launched including online submission of tax return across the country in the next three years.
A high official of NBR said, under the programme they want to bring one crore people under the tax net and the project will boost the initiative.
The cost of the NBR part under Strengthening Governance Management Project is Tk 78.98 crore of which the government's own fund is Tk 12.98 crore and project aid Tk 66 crore.
Two main functions of the project will be online filing and digitization of tax returns and establishment of taxpayers' information and service centres.
The project area is seven divisional towns--Dhaka, Chittagong, Rajshahi, Khulna, Barisal, Sylhet and Rangpur.
Presently online tax return system is in place in the last tax payer unit and tax zone-8 of Dhaka and about 23,000 taxpayers have been submitting their tax returns online in these zones.
Under the project one online tax filing and central data entry centre at the NBR (Dhaka) and a regional data entry and information centre will be set up at each of the divisional towns of Chittagong, Rajshahi, Khulna, Barisal, Sylhet and Rangpur.
Besides, required number of consultants will be appointed and online tax filing solution software, compute and other materials will be obtained.
A major portion of the allocation for the project will be spent in buying three software for the project. Tk 24.90 crore has been allocated for procurement of online tax filing solution software. For buying hardware for online tax filing and central data entry centre Tk 19.05 crore has been allocated. Tk 8.28 crore has been given for procurement of hardware for regional data entry and information centre.
An allocation of Tk 2.16 crore has been set aside for consultation fees in the project.
The project working paper said, ratio of direct tax and GDP in Bangladesh is the lowest in the sub-continent. In India the ratio is 6 percent, in Pakistan it's 4 percent whereas in Bangladesh it is only 2 percent.
A high official of NBR said, once the automation is completed the number of tax payers will increase. He said they hope to complete the project by 2013.
The official said, as per their study the number of persons capable of paying tax is one crore but only 10 lakh submit tax returns regularly.
At present the number of Tax Identification Number (TIN) holders is over 32 lakh.
The NBR official said their target is to bring one crore people under the tax net. For the purpose various moves have been initiated from last fiscal year and in the current FY it will be widened more.
This FY NBR is going to take a massive reform programme, outline of which has already been placed in the Jatiya Sangsad. For the revamping purpose 13,000 manpower will be appointed at different posts in the NBR.
BSRM plans 190MW power plant (Author: Sayeda Akter)
Local steel conglomerate BSRM Group is set to establish a merchant power plant to support its expansion in Chittagong.
Initially, the group plans to spend Tk 3,000 crore for the power plant, and has recently received the green light from the government to join the national grid.
After completion of the project, the company would produce 190 megawatts of electricity, said the chairman of the group.
“Basically, it's part of our expansion plan that we have been working on for the last couple of months. And we want to create a sustainable backward linkage for our next project,” said Alihussain Akberali.
“We have already received permission from the government to generate power for the national grid,” he said.
Now the group is awaiting a government approval for land acquisition to build up infrastructure for the plant.
Everything depends on the approval, and it will take no longer than three months to complete the project, said Akberali.
'We will start producing power once we get the go-ahead from the government.”
A merchant power plant is funded by private investors and sells electricity in the competitive wholesale power market. Since a merchant plant is not required to serve any specific retail consumers, consumers are not obligated to pay for the construction, operations or maintenance of the plant.
A traditional rate-based power plant, on the other hand, is built and operated by a regulated electric utility specifically to serve that utility's retail customers. In return, the customers are obligated to pay for the plant's construction, operations and maintenance.
BSRM has applied for permission for land in the industrial park in Mirsarai upazila of Chittagong, which the government is yet to respond to, said Akberali.
However, the company is yet to finalise which of its new wings will use electricity from this venture.
Founded in 1952, the Tk 3,696 crore BSRM Group is now the leader in the local steel market.
BSRM Steels, the flagship company of the group, is the country's only manufacturer of 500-grade steel rod.
BSRM Steels started its operation in June 2008 and now has an annual production capacity of more than 5 lakh tonnes of steel rods.
Bangladesh, Myanmar agree to increase trade (Author: Refayet Ullah Mirdha)
The joint trade commission of Bangladesh and Myanmar agreed to increase bilateral trade by strengthening border transactions, said a commerce ministry official yesterday.
The trade between the two neighboring countries is expected to increase to $500 million from $160 million now, said Syed Mahmudul Huq, chairman of the Bangladesh Myanmar Business Promotion Council, who was present at a meeting of the commission in Myanmar.
The commission held its fifth meeting in Myanmar's city of Nay Pyi Taw on July 21-22. Ghulam Hussain, commerce secretary, led the Bangladesh delegation to the meeting where some other officials and private entrepreneurs discussed ways of increasing the bilateral trade.
At the meeting, both countries agreed to increase the ceiling for transaction value to $50,000 per consignment from $30,000. The decision came into effect from August 1.
Bangladeshi importers now settle their payments for bulk shipments through bank drafts issued by foreign banks to a third country.
“We have discussed border trade, minimising the trade gap between the countries, facilitation and promotion of trade of agricultural products, food grains and other products under private sector initiative,” the commerce ministry official said.
Officials of both countries also discussed how to complete border transactions through the Asian Clearing Union payment system.
They also formed a joint committee on coastal shipping. The shipping committee is scheduled to sit a meeting either in Bangladesh or Myanmar to identify the commercial shipping routes, identify the ports of call and fix the tariff for shipping lines between the two countries.
He said the officials discussed the potential for setting up wholesale border markets at Bangladesh's Teknaf and Myanmar's Maungdaw, a border town.
Myanmar urged Bangladeshi entrepreneurs to invest in agriculture in the Southeast Asian country as it has a lot of land suitable for the purpose.
The Myanmar government also said they are ready to give long-term lease of land to Bangladeshi entrepreneurs for agricultural purposes from which both the countries would benefit.
Bilateral trade balance has been heavily tilting in favour of Myanmar over the years. Bangladesh exported goods worth $9.17million to Myanmar in 2008-09 while it imported goods worth $66.65 million from the country.
Remittance growth losing pace (Author: Star Business Report)
Inward remittance growth fell for a second month in May due mainly to the ongoing unrest in the Middle East and North Africa that has sent home thousands of migrant workers recently.
In May, migrant workers remitted $993.25 million, down from $1,001.97 million a month ago, registering a 0.9 percent fall.
The remittance, however, grew 9.9 percent in May compared to the same month last year when it was $903.05 million, according to statistics of the Bangladesh Bank.
The remittance growth in the first 11 months of the current fiscal year stood at 5.06 percent. During the July-May period, Bangladesh received $10.6 billion in remittance, up from $10.09 billion in the same period the previous fiscal year.
Remittance growth started slowing down due to a significant decrease in the net outflow of migrant workers over the past year and a half.
The number of workers going abroad in the first 11 months dropped 10.9 percent compared to the same period last year.
Also, a number of migrant workers returned home following political unrest in the Middle East countries such as Egypt, Libya, Bahrain and Yemen.
Mustafa K Mujeri, director general of Bangladesh Institute of Development Studies, said the uncertainty in the Middle East is one of the major causes behind the declining trend in remittance inflow.
The number of outgoing workers is also declining as some countries have stopped fresh manpower recruitment from Bangladesh, he added.
'We need to look for new destinations like Latin American, African and European countries,' he said, adding that giving training to the workers is necessary to gain the market in Europe.
CNG use rises in industries (Author: Sajjadur Rahman)
The use of compressed natural gas as an industrial fuel has been growing in the wake of continued uncertainty in supply of low-cost natural gas.
In the past few months, several factories, such as Abul Khair Cement, Dhaka Tobacco, Paragon Ceramics and Bengal Plastics have started using CNG to run their production.
Another big conglomerate Nasir Group has also decided to use CNG to begin production at its Tk 700 crore concern, Nasir Glassware and Tube Industries, which has been idle for more than two years without any gas connection.
CNG will push up the fuel costs four to five times compared to natural gas, industrialists said. A unit of natural gas costs Tk 4 for industries, while it is more than Tk 20 for CNG.
“We have no option but to go for costly CNG. Our factory remains unproductive for over two years for want of gas connection,” said Nasiruddin Biswas, chairman of Nasir Group of Industries.
Biswas has to spend Tk 2.5 crore a month for loan instalment and salaries of some staffs. He has spent nearly Tk 50 crore in the last two years without producing anything.
Like Nasir Glassware and Tube Industries, newly established Paragon Ceramics and Abul Khair Cement also went for CNG to run their factories.
Dhaka Tobacco has been facing gas shortage for the past couple of years. It is now being run 50 percent on CNG.
These businesses import CNG kits and other equipment and source CNG from local stations. Though the use of CNG in industries is not legally allowed, the government does not discourage using it.
There is no quick respite in gas crisis facing the country for the past several years. The shortfall in gas supply now stands at around 500 million cubic feet a day (mmcfd), sufficient to generate power to meet one third of the country's electricity demand, according to Petrobangla officials.
Hundreds of applications of different factories are now lying with the authority for gas connection. But there is no headway in giving the connections.
Amid this critical energy crunch, Finance Minister AMA Muhith is going to place the national budget before parliament. Though the businesses hailed the government for its contribution to electricity generation, they are unhappy with the efforts to improve gas situation.
“We can survive as we have other business units. Entrepreneurs, who have no backup to help a unit that is incurring losses due to gas crisis, will be wiped out,” said a senior official of Abul Khair Group.
Woven and knitwear manufacturers and yarn producers all are suffering badly for want of gas. Bangladesh Garment Manufacturers and Exporters Association (BGMEA) said, due to the gas crisis several factories have been lying inoperative for long, which may affect their growth prospects.
BGMEA President Shafiul Islam Mohiuddin said the gas and power crunch has forced the sector to adapt to the use of diesel, following which the industry used 245 million litres of diesel last year. The use of alternative fuel costs the industry a loss of Tk 760 crore.
Investment proposals registered with the Board of Investment (BoI) cannot be implemented due to an acute gas crisis, officials said.
BoI data shows that 1,436 domestic investment proposals worth Tk 39,542 crore were registered during the July-April period of the current fiscal year. Some 163 proposals worth $3.83 billion from foreign investors were registered with the BoI this year.
“The government should concentrate heavily on the gas supply and exploration of new fields to meet the growing demand,” said a senior Akij Group official. “Available gas can change the fate of the country and people will not need to go abroad for work.”
Stocks finish up on regulator's move (Author: Star Business Report)
Stocks returned from losses yesterday thanks to cheerful trading of investors buoyed by news that the authorities plan to amend securities laws to stabilise the jumpy market.
The benchmark general index of Dhaka Stock Exchange, DGEN, closed at 5,844.73, rising by 81 points, or 1.42 percent.
The selective categories index of Chitta-gong Stock Exchange also edged up 150 points, or 1.46 percent, to end at 10,456.73.
The rise came as the Securities and Exchange Commission started work to amend securities laws -- a recommendation of the probe committee on the recent share market debacle.
Saiful Islam, vice-chairman of BRAC EPL Investment, said: “The investors' confidence got a boost after the overhaul of the SEC and on news that securities laws will be amended within a couple of weeks.”
Islam also said investors expect a number of incentives.
He said the government should increase liquidity flow to the market to perk up their confidence.
High expectation from the regulatory body on amendment of securities laws, and planned incentives in the upcoming national budget boosted the investor confidence, said Reaz Islam, chief executive officer of LR Global, an asset management company.
In the last couple of sessions, turnover also rose, which is a good sign, said an operator.
Turnover increased to Tk 670 crore in value terms, up by 19.5 percent day-to-day from Tk 561 crore.
A total of 7.54 crore shares changed hands against 5.56 crore a day before. The trade deals increased to 171,482 against Sunday's 142,437.
Total market capitalisation on the DSE stood at Tk 271,238 crore against Tk 268,485 crore the previous session.
Of the total 257 issues, 176 advanced, 73 declined and eight remained unchan-ged.Banking issues gained 2.88 percent. All 30 issues in the sector closed positive.
Grameenphone lost 0.61 percent and non-bank financial institutions 0.19 percent. The fuel and power sector gained 1.44 percent, while the cement sector edged up by 2.7 percent.
United Airways topped the turnover leaders with 62.83 lakh shares worth Tk 30.19 crore changing hands. It was followed by United Commercial Bank, MI Cement, BSRM Steels, Meghna Cement, Titas Gas, National Bank, Confidence Cement, Eastern Housing and Beximco.
Stocks slip back into the red (Author: Star Business Report)
Stocks returned to the red after four days of gains as investors went for sell-offs yesterday.
The benchmark general index of Dhaka Stock Exchange edged down 89 points, or 1.6 percent, to close at 5,668 points. The selective categories index of Chittagong Stock Exchange declined 155 points, or 1.5 percent, to 10,155 points.
Investors sold the shares for booking profits, while some others were in losses, said a stockbroker.
“The liquidity crisis is the main problem of the market that requires co-ordination between the SEC and the central bank to boost the money flow,” said Akter H Sannamat, former managing director of Prime Finance and Investment. All stakeholders should work collectively to develop the market, he added.
He also said the Securities and Exchange Commission should work properly to control manipulation in the market, and fix the prices of initial public offerings fairly.
“Investors are more interested to make profits in the form of cash rather than by shares,” said Green Delta Securities.
Of the total 259 issues traded on the DSE floor, only 30 advanced, 223 declined and six remained unchanged. Turnover of the premier bourse stood at Tk 461 crore, which is 36.8 percent lower than in the previous session.
The banking sector lost 1.41 percent, making 28.5 percent of the total market capitalisation. Of 30 issues, three closed positive.
The non-bank financial institutions slumped 1.83 percent. All closed negative of the 21 issues.
The fuel and power sector lost 1.19 percent, reaching 11.8 percent of the total market capitalisation. Out of 12 issues, only two closed green.
Grameenphone, which represents the telecommunication sector, lost 1.75 percent, while the general insurance lost 1.94 percent. Of 34 issues, three closed positive.
National Bank topped the turnover leaders with 23.32 lakh shares worth Tk 13.82 crore changing hands.
The other turnover leaders were United Commercial Bank, MI Cement Factory, Beximco, United Airways, People's Leasing and Financial Services, Titas Gas, Eastern Housing, Aftab Automobiles and BSRM Steels.
Eastern Housing was the biggest gainer of the day, posting a 3.9 percent rise, while the Alltex Industries slumped 8.7 percent to end the day as the worst loser.
MJL listing sees light (Author: Star Business Report)
A long-running stalemate over the listing of MJL Bangladesh Ltd ended yesterday, as the issuer and the bourse reached a consensus to cut the price to Tk 115 each share.
However, it will take another two weeks to list the fuel company on the premier bourse, as some processes will have to be completed before that.
Although the IPO price of each MJL share was Tk 152.40, the company will be listed on the Dhaka bourse with a price of Tk 115 each. The rest Tk 37.40 will be returned to the investors through refund warrants.
The decision was taken at a board meeting of the Dhaka Stock Exchange yesterday, where MJL Managing Director Azam J Chowdhury was also present.
After the meeting, DSE President Shakil Rizvi said: “We have decided to give a listing approval to MJL for the greater interest of the stockmarket and the investors.”
However, before giving the approval, the DSE will convey its decision in writing to the Securities and Exchange Commission.
“Finally, we have agreed on the listing of MJL, which is the largest IPO after Grameenphone,' Chowdhury said.
“We have discussed with the regulator and the bourse authorities so many times to resolve the issue, and now the uncertainty is over,” he said.
He also said it may take two weeks to complete the refund warrant process, and then they will be ready for the listing.
The stalemate loomed over the listing of MJL after the regulator suspended book building method for initial public offering in January following a government instruction.
The SEC yesterday asked the bourses to take necessary steps about the listing.
Earlier, the MJL had offered several compensation packages for the listing, but the stock exchanges did not agree.
The company had said it would buy back shares if the prices go below the offering value within six months of trading and it would compensate the investors.
Later, as the bourses declined to consider the proposal, MJL came up with a package that it would issue 30 percent bonus shares before listing. It was also not accepted by the DSE.
Then the MJL had offered to give cash dividends to primary shareholders and compensation to investors if its share prices go below the offer price within the first six months of trading.
In its next move, the company wanted to offer more than 100 percent cash dividends and 15 percent to 20 percent compensation to the shareholders.
But, none of the proposals was accepted by the Dhaka bourse.
No impact of microcredit on rural development (Author: Star Business Report)
The idea of microcredit has hardly any impact on the rural development of Bangladesh although the country is a model for globally acclaimed microcredit concept, a top government official said yesterday.
“Farmers have to wait for months to reap crops. Conversely, according to the existing microcredit system, borrowers have to pay their loans in a week,” said Mihir Kanti Majumder, local government, rural development and cooperatives secretary.
“As a result the farmers cannot get the benefits of microcredit operations although it is linked to poverty alleviation,” he said.
The secretary also called for modernising the microcredit reimbursement system.
He was speaking at the inaugural session of a workshop styled “Performance of Capacity Building of People's Organisation Project (CBPO)” at the CIRDAP auditorium in the city.
The Centre on Integrated Rural Development for Asia and the Pacific (CIRDAP) and Bangladesh Academy for Rural Development (BARD) co-organised the programme.
Majumdar said rural development depends on capacity building, family planning, nutrition programme, infrastructural development, microcredit, health, policy and planning issues and participation of local representatives.
“Rural development should be more comprehensive as it could address the issues,” he said.
The government official asked CIRDAP and BARD to introduce a rural development model that could be replicable in Bangladesh as well as abroad.
Under the CBPO project, an evaluation study that included survey and focus group discussion method was conducted to measure its success.
The study revealed five reasons for loan defaulting: non-disbursement of future loan by project authority, financial crisis, negligence of field workers, lack of group savings-related information and possibility of wind-up of the project.
Respondents to the focus group discussion identified inadequate monitoring of the project authority and absence of field workers as the bottlenecks for the project.
The investigators made five recommendations including continuation of project activities and regular monitoring system to check proper utilisation of loan.
Ataur Rahman, director general of BARD, Comilla, Durga P Paudyal, director general of CIRDAP, Mizanur Rahman, project director of CBPO, were also present at the inaugural session.
BB hikes interest rebate on spices (Author: Star Business Report)
Bangladesh Bank has fixed the interest rebate on spices at 4 percent, which will come into effect on July 1.
Currently, state banks provide loans in the spices sector at the rate of 2 percent interest. The target of loan disbursement in the current fiscal year was Tk 96 crore, of which 71 percent has already been disbursed in the first 10 months.
Art glass at the centre of choice (Author: Sayeda Akter)
Growth of the real estate sector last decade boosted many other related sectors, like timber and teak, ceramic and glass. But the most remarkable metamorphosis was seen by the glass industry, which alone grew from nothing to a multi-crore taka industry in just a decade.
Demand for different types of glass is increasing at a steady rate of 15 percent a year, said industry insiders.
Now along with float glass, reflective glass, tempered glass, clear and coloured glasses, the demand for art glass -- including etched glass, beveled glass, traditional stained glass, stained glass overlay and sandblasted glass -- is growing fast among the urban users.
Nazneen Haque Mimi, an interior consultant of Journeyman, a reputed interior decorator, said the demand for coloured art glass and luxuriously designed glass has started rising from 1999, but reached peak in the last seven years.
“The main reason behind this is a changing urban lifestyle that demands an aesthetic view and also a cost-effective option while building and designing homes or offices,” she said.
“The price of glass is way more competitive than the price of wood. For example, if a square foot of glass costs Tk 950-Tk 1,000, the price of a cubic foot (cft) of Burma teak, ranges between Tk 3,000 and Tk 7,000.”
Apart from the cost, designed art glass can be frosted, an option that gives the glass a foggy view that maintains privacy as well, she said.
“Also, people want to use glass both as a construction material and for decoration these days,” said Mimi.
At present, the market for decorative art glass accounts for nearly Tk 85 crore a year. Local manufacturers are capable of meeting more than 70 percent of the total demand for the specialised material, said insiders.
They said the demand is high mainly among corporate houses. The use of glass in residences is limited to the higher-middle and higher income groups of people.
The insiders said most local manufacturers of decorative art glass are small and medium enterprises, who have a minimal level of investment.
Among the local companies, Reflections is the leading crafted art glass manufacturer, holding nearly 40 percent of total market share.
The company produces seven types of glass -- stained glass overlay, traditional stained glass, sandblasted glass, engraved glass, coloured glass, etched glass and beveled glass.
This segment of the glass industry also suffers from an acute shortage of power and an unavailability of raw materials in the local market, which affect production badly.
Since a majority of the manufacturers belong to the SME category, they cannot afford large generators to overcome the losses they incur due to a shortage of electricity, said the insiders.
They urged the government to develop local expertise to produce raw materials like different colours, bonding material and equipment for designing decorative art glass that will make the industry more cost-effective.
Taskforces to work on stockmarket, Grameen (Author: Rejaul Karim Byron)
The government will soon form two separate taskforces to implement the recommendations made by committees in their reports on the stockmarket and Grameen Bank.
The taskforce on stockmarket is likely to be formed with a former civil servant as its chief, and will monitor implementation of the recommendations mentioned in the probe committee report. It will also evaluate from time to time the steps to be taken for reforming the capital market.
Another taskforce on Grameen Bank will look into how the microfinance bank and its associated organisations could be brought under one umbrella to ensure coherent work, a Banking Division official said.
The Grameen Bank Ordinance 1983 that governs the microcredit organisation will be amended on the basis of the review committee recommendations.
The committee on Grameen Bank has made 23 recommendations. The panel that reviewed Grameen operations was led by Prof AK Monaw-war Uddin Ahmad of Dhaka University.
The taskforces will start work in a couple of weeks, Banking Division Secretary Shafiqur Rahman Patwari told The Daily Star yesterday. The government will take a series of steps in line with the recommendations.
Another Banking Division official said the recommendations for taking action on the basis of the stockmarket probe committee report have already been sent to Prime Minister Sheikh Hasina.
The government formed a committee led by Khondker Ibrahim Khaled, a former deputy governor of the central bank, on the stockmarket scam.
On April 30, the finance minister published the report of the stockmarket probe committee. He announced a set of steps on the basis of the report which detailed the actions to be taken. Till yesterday no step was taken in this regard.
The finance minister published the report of the review committee on Grameen Bank on May 12.
A finance ministry official said a new chairman and a member would be appointed to the Securities and Exchange Commission by tomorrow. Besides, a former judge and a chartered accountant will be appointed as SEC members.
The probe committee in its report mentioned specific instances of corruption by one SEC official and another official of the Investment Corporation of Bangladesh. Their cases will be sent to the Anti-Corruption Commission for further investigation.
A high official said the probe committee has mentioned the case of the two as a test case. A joint investigation team will be formed to probe if any other official is found involved in any irregularities, and their cases will also be sent to ACC if anybody is found involved in corruption
Clouds still linger over MI Cement (Author: Sarwar A Chowdhury)
The stockmarket regulator has given a clear direction about the listing of MI Cement Factory, but the Dhaka bourse is yet to list the cement maker. The bourse will sit again today to discuss the issue.
However, the company has already boarded the Chittagong Stock Exchange trading floor.
The Securities and Exchange Commission (SEC) directed the Dhaka bourse to list MI Cement. But the Dhaka Stock Exchange (DSE) denied the listing approval several times.
Even knowing about possible regulatory actions against the bourse, the DSE is not willing to give the listing approval, saying that conditional listing will be risky for the market.
Many say the DSE is showing its muscle taking the opportunity of an inactive regulatory commission. The SEC is almost inactive now, especially in taking policy decision ahead of the much-talked restructuring of the commission.
Two of the SEC members have already resigned as part of the restructuring process, while the government is going to announce a new chairman for the commission. With the appointment of a new member, the core body is now unable to hold any policy making meeting.
“The Securities and Exchange Ordinance of 1996 has given the regulator the power of imposing any directive and enforcing it. The directive regarding the listing of MI Cement means the bourse must list the company,” said Professor Salahuddin Ahmed Khan, a former chief executive officer of the premier bourse.
“If the DSE does not list the company, it means violation of the SEC order. Because of the violation, the SEC can take any action against the bourse,” said Khan.
Ahsanul Islam Titu, senior vice-president of the DSE, said neither there is a rule of conditional listing, nor it is practised else where in the world.
“We think if one company is listed with conditions, it will set examples for others and may become a tradition, which is very risky for the market,” he said.
“That's why we asked the company to come up with lower price of its shares,” he said, adding: “We never said we will not list the company.”
He said the DSE board will sit again today to discuss the MI Cement issue.
The SEC on April 26 issued a circular directing the bourses to list MI Cement Factory.
Before the circular, MI Cement proposed that its sponsor directors will compensate the investors if share prices go below the offer price within the first six months of trade.
After the requirements were fulfilled, the Chittagong Stock Exchange on May 6 listed the company.
MI Cement raised Tk 335.05 crore from the public using the book-building method.
The stalemate was created after the regulator suspended the book building method in January.
Mohammed Jahangir Alam, chairman of MI Cement, said: “We are still hopeful of getting the listing approval, as we have fulfilled all the requirements.”
Stocks pass bearish week (Author: Star Business Report)
Stocks continued to behave in a bearish manner for a fifth week as investors did not take chances following the government to implement the recommendations of a probe committee.
The benchmark general index of Dhaka Stock Exchange slumped 286.88 points, or 4.86 percent, to 5,612 points on Thursday.
Market experts identified the government's delay in implementing the recommendations made by the stock scam probe body as a major reason behind the current market situation.
They said an overhaul of the Securities and Exchange Commission (SEC) has become a significant factor to bring back stability to the market.
On one hand, institutional investors remain almost inactive in the secondary market, and on the other, many retailers are still suffering losses.
“Maybe some big investors, whose names were in the probe report, are trying to pull down the market deliberately through creating a selling pressure by circular trade, resulting in a panicky situation among the retail investors,” said an expert.
The Bangladesh Bank should reduce the CRR (cash reserve requirement) and SLR (statutory liquidity ratio) to increase money flow in the market through the institutional investors, he adds.
The daily average turnover on the DSE stood at Tk 450.67 crore, down by 13.48 percent from the previous week. Of 258 issues traded, only 18 advanced and 240 declined.
The market capitalisation was Tk 271,504 crore on the opening day of the week and at the end of the week, it stood at Tk 261,311 crore, down by 3.75 percent.
Ports to get private duty-free shops (Author: Star Business Report)
The government plans to allow private companies to set up duty-free shops at international airports, sea and land ports alongside the public sector to help customers buy products at competitive prices.
The National Board of Revenue (NBR) has recently sent a proposal to the cabinet division, urging the government to ease the way for opening portside stores, which will also create jobs and give extra revenue, said an official.
The NBR has categorically urged the cabinet division to cancel two clauses of the regulations dated back 1985 that allow only the state-run Bangladesh Parjatan Corporation (BPC) to run such shops and ban setting up bonded warehouses by private owners.
In Bangladesh, there are three international airports in Dhaka, Chittagong and Sylhet, two seaports in Mongla and Chittagong, and over a dozen land ports including Benapole, the largest.
Activities of the ports have increased over the time, thanks to a steady growth of the economy, and the number of passengers using the facilities also went up many folds.
The NBR officials said duty-free stores could primarily be set up in the country's three major airports, two seaports and, if infrastructure supports, at land ports under private management.
The state-run BPC, however, will get priority in setting up such retail outlets, which normally enjoy exemptions from local or national taxes and duties.
According to the NBR, the Bonded Warehouse Licensing Regulations, 2008 can be used as policy in setting up the shops under private ownership.
In 1982, the cabinet division had decided to set up such shops at Chittagong and Sylhet airports, and others ports in the country. But three years later it imposed restrictions on setting up such shops by the private sector, empowering the BPC to run such commercial outlets.
In 2009, the cabinet scrapped the earlier decision and approved the private sector to help make a foray into the business. But the decision is still ineffective, as the existing regulations still only allow the BPC to open such shops and bar private parties to open bonded warehouses, the officials said.
Many private companies have already applied to obtain licences under the existing regulations. Some have even claimed that airport or land port authorities have leased places to them for setting up duty-free shops.
The NBR proposal said the number of travellers using the air and land ports has increased recently due to trade liberalisation, high foreign investment and the development of the tourism sector.
In this circumstance, duty-free shops can be set up to sell imported products to both inbound and outbound travellers in exchange of foreign currency under the bonded facility, the proposal said.
Meanwhile, three companies have been leased space in airports to set up duty-free shops, flouting the cabinet division decision taken in 1985.
The Internal Resources Division (IRD) of the finance ministry has investigated the issue and found that the Civil Aviation Authority has awarded the space for setting up shops. No bond licence has been obtained from the IRD to run the shops
Northern Power to issue Tk 175cr bonds (Author: Star Business Report)
The Securities and Exchange Commission (SEC) yesterday approved Northern Power Solution's proposal to issue 50 percent convertible bonds to raise capital from the market.
The SEC gave the green light to the power company at a meeting chaired by SEC Chairman Ziaul Haque Khondker.
Saifur Rahman, a spokesman for the SEC, said: “The commission has not imposed any condition on the company to go for an initial public offer during the bond period.”
However, as per the Companies Act, every company must go from private to public, if it has more than Tk 50 crore in paid-up capital. The existing paid-up capital of Northern Power Solution is Tk 91 crore. The company is likely to go for IPO within a year.
The company will offer 17.5 lakh bonds at the issue price of Tk 1,000 per bond at an 18 percent interest rate to institutional investors to raise Tk 175 crore to establish a power plant in Rajshahi.
The period of the 50 percent convertible bonds is four and a half years and a grace period of six months, while the redemption rate of the company is 25 percent a year. If the company does not go for IPO within the time it will use cash for redemptions.
If the company goes public in the future, it would be able to convert its bonds into shares at the price of IPO instead of face value. The trustee of the power company is ICB Capital Management.
The SEC also extended listing period for MJL Bangladesh and MI Cement for two more weeks as the commission found some development in the listing process.
MJL Bangladesh and MI Cement wanted to compensate the shareholders from the directors' account, said SEC officials
Aditya Birla rolls out cement brand (Author: Star Business Report)
Indian conglomerate Aditya Birla Group yesterday launched its cement brand UltraTech in Bangladesh.
“Bangladesh is an emerging market in the world economy with immense potential, where it requires building a huge number of infrastructure facilities. And for that, the necessity of quality construction materials comes in,” said Dev Banerjee, country head of Bangladesh operations of UltraTech Cement.
“Since our brand has gained reliability and trust in the regional and European markets, we hope we can make a difference,” said Banerjee at the inauguration ceremony organised at the Radisson Water Garden Hotel in Dhaka.
The company's production plant is situated in Muktarpur, Munshiganj, which has a production capacity of 2,000 tonnes a day, he said.
UltraTech manages to support its own energy requirement by setting up a 10 megawatt captive power plant inside the factory. Also, the company is equipped with the latest technologies that allow it to operate without polluting the environment.
UltraTech cement will be available on the local market from today.
Vivek Agarwal, CEO of international business of Ultratech Cement, said: “We are very optimistic about helping Bangladesh build sustainable infrastructure and thereby be a part of the fast growing economy.”
Earlier, Aditya Birla Group acquired Dubai-based ETA Star Cement Company in April last year, and, by extension, the local operation of Emirates Cement in Bangladesh.
Although the cost of the acquisition was not disclosed, the enterprise value of the deal works out to around Rs 1,700 crore, according to a report published in Times of India on April 30 2010.
The report also said UltraTech has acquired more than 51 percent stake in ETA Star Cement.
At present, 35 cement manufacturers operate in Bangladesh, of which five are multinational companies. Manufacturers sell as many as 11 lakh tonnes of cement a month, said industry insiders.
Asian countries join forces to shield migrant workers (Author: Star Business Report)
Asian countries that send migrant workers abroad yesterday agreed to work together to reduce vulnerability and insecurity of their citizens during emergencies in the employing countries.
Participants in a colloquium planned to sit at a consultation workshop in Geneva later to devise and develop a framework through their combined efforts to ensure safety and security of migrant workers during emergency situations like war at the destination countries.
''We need to deal with such situations in a coordinated manner,” said Foreign Minister Dipu Moni after a session of a ministerial consultation of 11 migrant worker-sending countries of Asia at Sonargaon Hotel.
“We will sit with all stakeholders including international organisations to draw a specific guideline or handbook outlining roles of all stakeholders in times of emergency,” she added.
The three-day ministerial consultation focuses on rights and security of migrant workers at a time when exporting countries and international organisations are trying to ensure a safe evacuation of migrant workers from the war-ravaged Libya.
Since the outbreak of war in Libya after the mass upheavals and change of governments in Egypt and Tunisia, nearly 250,000 migrant workers have been evacuated from the North African country. Of the evacuees, 35,000 were Bangladeshi nationals.
Participants said countries and the international community were not prepared to deal with the emergency situation in the Middle East and North Africa.
The 2007-08 global financial crisis and economic meltdown forced thousands of migrants, including Bangladeshis, out of jobs. Add to this the displacement of migrant workers due to negative impact of climate change.
MI Cement refutes allegations (Author: Star Business Report)
MI Cement Factory Ltd that faces allegations of inflating financial figures claimed yesterday that it complied with all securities rules for an initial public offer.
Top officials of the cement manufacturer said they did not find any reason why its listing plan got stuck in the ruts.
“We have completed the initial public offering (IPO) process abiding by all securities rules. We have also agreed to fulfil any requirement set by either the government or the regulator,” said Mohammed Jahangir Alam, chairman of MI Cement.
He said, if the company fails to list on the stockmarket, it will send a negative message to other entrepreneurs who want to take their companies to the capital market. “Many of them have already said they do not want to face a situation like us,” he said.
“We hope, our company will finally be listed, although the legitimate listing time expired [yesterday],” he said, adding that they have already sought one month's time extension from the regulator.
He made the comments at a press conference in Dhaka yesterday following the premier bourse's rejection to give a listing approval to the company.
The Dhaka Stock Exchange at a board meeting on Monday refused to give the listing approval to MI Cement, saying that the company's compensation offer to the investors, if its share prices go below the IPO prices within six months of trading, conflicts with the Companies Act.
After a regulatory advice, MI Cement earlier said it would compensate the retail investors as per clause 57(2)C of the Companies Act, if its share prices go below the IPO prices within six months of trading.
Refuting the stockmarket probe committee's findings on MI Cement IPO, Alam also clarified the company's position against the observations of the probe report.
He claimed the probe committee's findings and observations that were published in different news media were wrong and misleading.
It is reported that the proposed capital to be raised from the capital market amounts to Tk 335.05 crore for 3,000 tonnes capacity a day, which is Tk 11.10 lakh per tonne. “But actually we have raised Tk 334.80 crore. However, the fact is that we proposed to raise the fund not only for setting up the fourth unit of 3,000 MT/day capacity,” he said.
“We had clearly stated in the IPO prospectus that apart from the fourth unit, in what other projects the IPO proceedings will be utilised, and if further fund is required to complete the projects, it will be arranged through borrowing form bank and that was also disclosed in the prospectus.”
The earnings per share (EPS) have been stated to be Tk 1.27 as of 2009, which is also a misleading and incorrect report, he said. Actually, the income period shown in the prospectus, July-December of 2009, was for six months and the EPS was Tk 1.60, which if annualised, comes to Tk 3.20.
Regarding the probe committee's observations on 'other operating income', 'non-operational income', 'increase in extra benefit and expenses for employees' and 'sales', he said everything was explained in the prospectus.
Replying to a query on high pricing of the company's shares, he said 208 institutional investors built up the share price using the book building method
BRAC gets global recognition (Author: Star Business Desk)
BRAC has recently been selected as a Devex Top 40 Development Innovator as the only South-based development organisation, BRAC said in a statement yesterday.
BRAC was selected based on a poll of thousands of Devex members who together comprise one of the largest networks of global aid and international development professionals.
“We are honoured to be selected by the Devex community as a Top 40 Development Innovator, especially as the South-based NGO to be chosen,” said Sir Fazle Hasan Abed, founder and chairperson of BRAC.
“BRAC strives towards continuous innovation in its holistic approach to addressing poverty. Our real success has been in adapting these creative solutions to differing contexts and being able to scale up quickly to make significant impact. And we strive to do this while keeping a focus on the lives of individuals and communities.”
The award that Devex announced
on Monday on Facebook at www.facebook.com/devex include four types of international development organisations: donor agencies and foundations, development consulting companies, implementing nongovernmental organisations and advocacy groups, the statement added.
The selection is based on an email survey of more than one lakh aid workers and international development professionals.
“Solving the big global challenges we face -- from climate change to poverty -- will require innovation,” said Raj Kumar, Devex president. “We are proud to honour these 40 organisations that are leveraging innovative techniques and approaches to solve complex problems.”
Award recipients will be recognised at a reception at the House of Sweden in Washington DC today with Chris Thomas, chief strategist at Intel, and Sonal Shah, White House director of Social innovation, as featured speakers.
Mahahbub Hossain, executive director of BRAC, and Susan Davis, BRAC USA president and chief executive officer, will represent the Bangladeshi development organisation at the reception.
Robi lunches mobile remittance service in Bangladesh (Author: BBN)
Dhaka, Bangladesh (BBN)- Robi Axiata Limited, a mobile phone operator, and Eastern Bank Limited (EBL) have begun a mobile remittance for the first time in the country to facilitate Bangladeshi expatriates living abroad to transfer money through mobile phone.
Mobile remittance service, which has done wonders in other emerging market economies, will allow seamless and real-time fund transfer from one person's bank account to another.
This is an easy, most convenient and secured way to receive foreign remittance. Selected retailers/distributors, Robi Service Partners, will act as cash out points (accredited by the partner banks) from where the beneficiaries can withdraw their remittance in cash.
Managing Director and Chief Executive Officer (CEO) of Robi, Michael Kuehner and Managing Director & CEO of Eastern Bank Limited, Ali Reza Iftekhar were present at the launching ceremony of the remittance service held at a restaurant in the city recently.
In order to collect remittance beneficiary needs to show and submit a photocopy of original identity document (National ID/passport/driving license) & transaction ID to the Robi Service Partner (RSP) outlet. Upon diligent verification RSP will payout the remitted amount to the beneficiary.
Initially the service will be launched at RSP's of Dhaka, Comilla and Chittagong region. Gradually the service will spread out all over Bangladesh.
Customers of any mobile operator can receive remittance service from RSP and remittance recipients can get this service free of cost.
BBN/SSR/AD-20Apr11-4:20 pm (BST)
Industrial output set to rise again (Author: Sajjadur Rahmanfirstname.lastname@example.org)
After three years of slowdown, industrial output is set to rise this year driven by value rather than volume.
According to a recent projection by the Asian Development Bank (ADB), industrial production is expected to grow by 7.5 percent this fiscal year ending on June 30 compared to 6 percent in the previous year.
The sector's growth was dipping down from robust 8.4 percent in 2006-07 to 6.8 percent in 2007-08 and 6.5 percent in 2008-09, mainly due to the global recession and internal political instability.
Mustafizur Rahman, executive director of Centre for Policy Dialogue, said a rapid rise in imports of raw materials and capital machinery and growing industrial term loan -- all show the manufacturing sector is set to go back to the historical growth trend.
According to Rahman, the growth is mostly for cost escalation rather than the volume factors, which can generate employment.
He said growth of the industrial sector is important in terms of absorbing additional labour force as the opportunities in farm and overseas employment sectors are getting squeezed recently.
“There may not be a growth in actual production. It will be in value terms,” said the CPD executive director on this year's industrial growth projection.
Industrial growth went down during the past few years because of internal and external factors. Bangladesh faced a political turmoil since the last quarter of 2006 till the elected government took the power in early 2009. In the meantime, the global situation also got volatile for economic meltdown originating from the US, which later spread to other parts of the world.
When the global economic condition started to recover in 2010, prices of commodities -- from food items to fuel oil, steel and cotton -- soared rapidly. The price of cotton, which is a must ingredient for garments, has trebled during the time.
Bangladesh Bank data shows import of industrial raw materials and capital machinery has increased significantly in the first eight months of the current fiscal year.
During the July-February period of the current fiscal year LCs (letters of credit) opened and settled for industrial raw materials were worth of over $10.5 billion and $8.2 billion respectively. The growth rate was 69 percent and 55 percent respectively compared to that of the same period a year ago.
Disbursement of industrial term loan also rose considerably -- by over 34 percent to Tk 16,924 crore during the July-December period of 2010-2011 against the same period of the previous year.
“Improvement in power supply and a rise in business confidence are likely to boost activity,” said the ADB in its outlook report for 2011. But there are risks too.
“The inability to bring the planned short-term addition to power supply and slippages in addressing gas shortages would also slow growth, mainly through their effects on industry,” said the Manila-based lender.
Stocks dive on massive sell-offs (Author: Star Business Report)
Stocks ended lower for a fifth day amid allegations of deliberate sell-offs by 'stockmarket manipulators' named in a probe report.
The benchmark general index of Dhaka Stock Exchange slumped 68.23 points, or 1.07 percent, to 6249 points yesterday. The DSE lost 175 points in four trading days. The selected categories index of Chittagong Stock Exchange lost 76.02 points, or 0.66 percent, to close at 11,342 points.
Prof Salahuddin Ahmed Khan, who teaches finance at Dhaka University, said: “It is a very unusual behaviour of the market.”
Khan, also a former chief executive officer of DSE, said the accused wanted the stock market fall again as the High Court asked the government to make the report public within a reasonable time frame.
He suggested the surveillance department of the Securities and Exchange Commission should find out the investors who made massive sell-offs.
Most of the investors anticipated that the market would gain on the day, but selling pressures pushed down the stocks, said an insider.
Akter H Sannamat, a market analyst, said: “Suspects went for sell-offs to pile pressure on the government so that it refrains from taking any action against them.”
The market is not behaving in a rational manner, said Sannamat.
Of the total 253 issues traded on the DSE floor, 217 declined, 30 advanced and six remained unchanged.
Turnover on the DSE stood at Tk 791 crore, up Tk 76.73 crore from the previous day.
The banking sector lost 0.37 percent, reaching 27.5 percent of the total market capitalisation. Non-bank financial institutions lost 1.39 percent. Of 21 issues all closed red.
The fuel and power sector lost 0.47 percent, reaching 11.6 percent of the total market capitalisation, while the textile sector lost 1.84 percent.
Grameenphone, the lone player in the telecoms sector, lost 1.01 percent.
Beximco topped the turnover leaders with 95.59 lakh shares worth Tk 27.72 crore traded on the day.
The other turnover leaders were Bextex, Titas Gas, DESCO, Malek Spinning Mills, Aftab Automobiles, BSRM Steels, Lankabangla Finance, Aims First Mutual Fund, and Olympic Industries.
Janata Insurance was the biggest gainer of the day, posting 5.21 percent rise its share price, while Fidelity Assets and Securities Company was the worst loser, slumping by 12.96 percent