Haque Specialized Group's News

The volume of investment proposals registered with Bangladesh Investment Development Authority (BIDA) during the fourth quarter (Q4) of fiscal year (FY) 2016-17 fell by 22 per cent or nearly Tk 81.92 billion over the previous quarter (Q3). Investment proposals worth Tk 290.25 billion were made during the April-June period of FY 17, compared to that of Tk 372.17 billion during the January-March period, the BIDA figures have revealed. Besides, a total of 443 industries were registered with the organisation for investment during the fourth quarter, whereas the number was 510 in the third quarter. Of the total, local investment proposals worth Tk 274.38 billion were registered with BIDA in Q4 of FY 17 for 396 industrial units, compared to Tk 298.60 billion for 469 industrial units in Q3 of the said fiscal. Besides, a total of 47 registered industrial units - 19 foreign and 28 joint ventures (JV) - made investment proposals amounting to Tk 15.87 billion during the last April-June period. The amount was Tk 75.37 billion for a total of 41 foreign and JV investment proposals during the January-March period, the BIDA figures showed. Nearly the highest 32.89 per cent of the total investment proposals - both local and foreign - were made during the April-June period for setting up textile sector. It was followed by chemical industries with 22.41 per cent, engineering sector with 18.12 per cent, and service sector with 6.94 per cent, according to BIDA. smjahangirfe@gmai.com....

Published at: 2017-07-28 00:00:05

European Union (EU) has decided to increase its investment ratio in the country's service sectors from 40 per cent to 49 per cent for making European investment more attractive and for improving doing business index here. The decision to make 51:49 ratio of Bangladesh and EU investment was taken during Bangladesh-European Union Business Climate Dialogue, held at the Ministry of Commerce conference room in the capital on Thursday. The dialoge, third of its kind since May last year, agreed to work together for resolving problems in trade and investment relationship between Bangladesh and EU under five working groups. The groups, working since the first meeting, continued efforts to identify problems and recommend solutions with all-out efforts of the two sides. Commerce Minister Tofail Ahmed led the Bangladesh delegation in the meeting, while EU Delegation Ambassador Pierre Mayaudon led the EU side. UK High Commissioner Alison Blake, Ambassador of Spain D Alvaro de Salas Gimenez de Azacarate, Ambassador of Denmark Mikael Hemniti Winther, Ambassador of Netherlands Leoni Cuelenaere, and Head of Economic Department of France Francois Petit were also present on the occasion. Commerce Secretary Shuvashish Bosu, Chairman of Bangladesh Investment Development Authority Kazi M Aminul Islam, Chairman of National Board of Revenue M Nojibur Rahman, Vice Chairman of Export Promotion Bureau Bijoy Bhattacharya, and Registrar of Joint Stock Companies and Firms M Mosharraf Hossain were among the Bangladesh delegation members. Briefing the journalists after the meeting, the commerce minister said Bangladesh has requested the EU delegation to take steps for increasing prices of local garment products, which still remain low even after making huge investment in the sector. The minister said five groups - import duty and customs trade facilitation, Bangladesh pharmaceutical sector, licences and investment in service sector, tax regime and financial - will continue to work in resolving problems in trade and investment between the two sides. "We want to encourage foreign direct investment from EU member countries, and showed interest to increase trade volume to Europe by 10 per cent," said the commerce minister. He also said during the meeting, investment from EU member countries was invited in the special economic zones (SEZs), being set up in 100 locations across the country. Tofael Ahmed reiterated the government's stand to take decision after Accord and Alliance proposed the government to extend the time of inspecting fire safety, electrical safety and structural integrity of RMG units after the end of current tenure in May 2018. The EU Delegation ambassador recalled Bangladesh's engagement in the EU markets, and hoped that EU investment here would increase with rise in exports of the member countries. Pierre Mayaudon also said Bangladesh needs more investment for benefit of the nation, and EU exports to Bangladesh would ensure high quality products. The ambassador focused on holding meetings with investors and exporters, making necessary rules and regulations with simplicity, credibility and neutrality. He also said Bangladesh-EU chamber of commerce is likely to be formed soon. The dialogue concluded with the decision to continue holding business climate meetings. The last such meeting between Bangladesh and EU was held in December, focusing on pharmaceuticals, financial flows and tax regime. Bangladesh has been enjoying duty-free facility from EU. smunima@yahoo.com....

Published at: 2017-07-28 00:00:05

The capital returned to normal on Thursday, as rainwater receded from most of the city roads and low-lying areas, giving respite to the city dwellers.   The situation improved mainly because of zero rainfall in the capital since Wednesday noon. Movements of commuters and pedestrians were almost normal like other days, as most of the roads across the capital were waterless.   Due to spells of torrential downpour during the last few days, most of the roads, lanes and sub-lanes across the capital went under knee-to-waist-deep water on Wednesday, causing immense sufferings to the city dwellers as well as disrupting trade and economic activities. However, Met Office in its 24-hour forecast updated on 6.00 pm on Thursday said a light to moderate rain is likely to occur at a few places over Rajshahi, Khulna, Barisal, Sylhet, Mymensingh, Rangpur, Dhaka and Chittagong divisions with moderately heavy falls at places over the country. Both the north and south city corporations came under criticism from different quarters because of severe water-logging in the capital. The city mayors blamed Dhaka Water Supply and Sewerage Authority (DWASA) and some other government entities concerned over the water-logging.       LGRD Minister Khandker Mosharraf Hossain, however, assured the city residents that they will not face any abnormal water-logging next year. arafat_ara@hotmail.com....

Published at: 2017-07-28 00:00:05

The Bangladesh Jewellers Samity has raised the gold prices in line with the international market prices. The newly revised rates will come into effect today (Friday), said the Samity General Secretary Dilip Kumar Agarwala in a statement on Thursday. As per new rates, a gram of 22-carat gold will now be selling at Tk 4,040, up from Tk 3,935; a gram of 21-carat gold at Tk 3,875, up from Tk 3,760; and a gram of 18-carat gold at Tk 3,400, up from Tk 3,315.  A gram of traditional (Sanatan) gold, which was selling at Tk 2,130, will now cost Tk 2,200. According to the traditional measure, the new rate for a bhori (11.664 gram) of 22-carat gold will be Tk 47,122, up from the current price of Tk 45,897.     — FE Report....

Published at: 2017-07-28 00:00:05

The Bangladesh Bank (BB) should take cautious steps about an increasing trend in short-term foreign currency financing following its extra liability on the country's foreign exchange reserves, a study has suggested. "The importers prefer such credit in foreign currency due to lower interest rate," said the study conducted by Bangladesh Institute of Bank Management (BIBM). The findings were presented at a research workshop held at the BIBM on Thursday. The study also recommended collection of detailed data on the short-term foreign currency financing as there was no segregated data on private sector credit and banking sector credit in any public source. The research workshop paper was presented on 'Prospects and challenges of short-term foreign currency financing of banks'. The research was conducted by BIBM professor and director Dr Shah Md Ahsan Habib, assistant professor Antara Zareen, lecturer Tofayel Ahmed, Bangladesh Bank joint director Pradip Paul, vice president of Mutual Trust Bank ATM Nesarul Hoque and first assistant vice president of Bank Asia Limited Mohammad Rafiqul Islam. The survey was conducted on 20 banks. A good number of central bankers, and commercial bank executives also contributed input into the study. The available data showed that short-term credit grew around 700 per cent at the end of 2013 following the permission of buyers' credit activities or Usance Pay at Sight (UPAS) letters of credit (LCs) by the central bank. The growth of short-term credit in foreign currency was 31 per cent at the end of 2016, it said. The short-term foreign currency financing was US$ 230 million in 2012 whereas it stood $ 6,157 million in 2016. According to study, the country's private sector debts as percentage of total debts was 6.56 per cent in 2012, it became 12.64 per cent in 2013, 18.61 per cent in 2014, 21.03 per cent in 2015 and 22.51 per cent in 2016. And the percentage of short-term private sector debt to total debt was 0.85 per cent in 2012 whereas it became 5.9 per cent in 2013, 10.08 per cent in 2014, 12.27 per cent in 2015, and 14.9 per cent in 2016. It said sudden growth of private sector credit was clearly visible following the year 2013; and there were adequate evidences that point towards sudden growth of banking sector's foreign currency liabilities following the initiation of buyers' credit or UPAS activities in the country. "It is crucial now to continuously monitor the trends and growths of the short-term foreign currency liabilities of banks. And for that the first step should be to gather or summarise short-term private credits of the banking sector." The study suggested that offshore banking units (OBUs) should come under BB's scanner for effective monitoring of the foreign currency financing including that of UPAS activities. It said traders were cashing in on lack of precise definitions of raw materials and capital machinery. "Moreover, there are now growing tendencies amongst importers to shift from sight to usance LCs to take advantage of the low interest rate of UPAS. The changing trend is causing pressure on banks to undertake greater foreign currency liabilities." It urged practitioners and policymakers to think about as to how these malpractices and undue developments can be handled to ensure due and productive use of UPAS in the country. It said the sources of fund of OBUs for such activities should come under monitoring for the greater interest of keeping eye on banking sectors' foreign currency liabilities. "The permission of export bill discounting was given mainly with the intension of using domestic foreign currency funds to support exporters, the current sources of funds used for such activities are not very clear, and there are no summarized data to identify the sources." The study urged the central bank to introduce a set of rules to guide asset liability management practices of OBUs for the greater interest of the banking industry. There must some of reporting of such financing. While speaking at the workshop, Bangladesh Bank deputy governor Abu Hena Mohd Razee Hassan said the central bank will not allow unlimited private sector foreign credit as some of East Asian countries' international trade collapsed due to high volume of private sector foreign lending.   He said there is a huge demand for foreign currency financing due to low interest rate. Though financing in foreign currency creates loan burden on other countries, yet if foreign currency is not paid regularly, it creates reputational problem not only to borrowers but also to Bangladesh. "In Bangladesh, foreign currency financing facilities are permitted to support investment involving lower cost, but at the same time, we should keep in mind that foreign liability is exposed to exchange rate risk. Considering the risk and importance of short-term foreign currency financing, Bangladesh Bank has introduced a number of measures." He said though BB is very cautious on foreign currency transaction and especially on foreign book liability, yet the opportunities for using short-term foreign currency financing are not overlooked. "Bangladesh Bank formulated a policy note titled 'An Analysis of Private Commercial Borrowings from Foreign Sources in Bangladesh' which identified different inputs behind the trends and uses of private sector commercial borrowing from external sources in Bangladesh." He said there are some grey areas in the industry in addressing proper needs and challenges of short-term foreign currency financing. The misuse of facilities makes the short-term transaction more vulnerable for the country to some extent. BIBM DG Dr Toufic Ahmad Choudhury presided over the workshop while supernumerary professor of BIBM Md Yasin Ali, additional managing director of Islami Bank Md Mahbub-ul-Alam, BIBM faculty member Syed M Bariqullah and Eastern Bank deputy managing director Ahmed Shaheen also spoke at the programme. bdsmile@gmail.com....

Published at: 2017-07-28 00:00:05