Business
Asian stocks higher after Wall St rebounds from bank jitters
Asian stock markets rebounded Wednesday after Wall Street stabilized following declines for bank stocks and U.S. inflation eased but stayed high.
Shanghai, Tokyo, Hong Kong and Sydney advanced. Oil prices rose more than $1 per barrel, recovering some of the previous day's losses.
Wall Street's benchmark S&P 500 index rose Tuesday as bank stocks recovered some of their losses caused by worries customers might pull out deposits following the collapse of two U.S. lenders.
Stocks rose despite data showing prices rose 6% over a year ago in February, decelerating from the previous month's 6.4% but above the Federal Reserve's 2% target.
Also Read: Asian shares mostly sink on jitters after US bank failure
“The anchoring of less hawkish expectations provided some catalyst for risk sentiments to recover,” said Yeap Jun Rong of IG in a report. “There were also no new negative headlines of another bank or funds in trouble, which allows investors’ sentiments to settle down.”
Investors had worried the Fed might respond to enduring upward pressure on prices by speeding up the pace of interest rate increases to dampen economic activity and inflation. But those jitters were overshadowed by anxiety about the U.S. financial system following the collapse of Silicon Valley Bank on Friday and Signature Bank on Sunday. President Joe Biden and regulators tried to assure the public risks were contained and deposits in other banks were safe.
Tuesday's data showed core inflation, with volatile energy and food prices stripped out to show a clearer trend, was 0.5% in February over the previous month, edging up from January's 0.4% gain. The Fed pays close attention to core inflation in making monetary policy.
The Fed faces a dilemma over how to respond when banks already are under strain after the fastest pace of rate hikes in a decade knocked down prices of their assets.
The Shanghai Composite Index rose 0.7% to 3,267.15 after Chinese economic activity improved in January and February but less than expected after anti-virus controls ended. Retail sales rose 3.5% over a year earlier, rebounding from December's 1.% contraction. Factory output rose 2.4%, up from 1.3%.
The Nikkei 225 in Tokyo advanced 0.1% to 27,258.01 after major Japanese companies announced they had agreed with unions to the biggest wage increases in almost two decades. Low wages are seen as a major drag on economic growth in Japan, but fewer than one in five Japanese workers belong to unions.
The Hang Seng in Hong Kong jumped 1.3% to 19,490.35 and the Kospi in Seoul surged 1.5% to 2,384.38.
India's Sensex opened up 0.2% at 58,297.50. New Zealand and Southeast Asian markets advanced.
Traders rushed Monday to place bets that the Fed could keep rates steady at its next meeting, instead of accelerating to a hike of 0.50 percentage points, double last month's margin, according to data from CME Group.
On Wall Street, the S&P 500 rose 1.7% to 3,920.56, reversing from a three-day string of declines.
The Dow Jones Industrial Average rose 1.1% to 32,155.40. The Nasdaq added 2.1% to 11,428.15.
First Republic Bank jumped 27% after plunging 67.5% over the prior three days. KeyCorp gained 6.9%, Zions Bancorp. rose 4.5% and Charles Schwab climbed 9.2%.
The yield on a two-year Treasury, or the difference between the market price and the payout at maturity, climbed back to 4.21% from 4.02% late Monday, another huge move. The yield on the 10-year Treasury jumped to 3.66% from 3.55%.
In energy markets, benchmark U.S. crude rose $1.08 to $72.41 per barrel in electronic trading on the New York Mercantile Exchange. The contract plunged $3.47 on Tuesday to $71.33. Brent crude, the price basis for international oil trading, advanced $1.09 to $78.54 per barrel in London. It lost $3.32 the previous day to $77.45.
The dollar declined to 134.09 yen from Tuesday's 134.19 yen. The euro rose to $1.0754 from $1.0741.
Walton Digital Campaign: 1 more customer gets 101 products for free
Md Nazrul Islam, a businessman from Morrelganj municipality of Bagerhat, has got a total of 101 products for free after purchasing a refrigerator of Walton brand.
Walton has been providing the facilities to its customers under the ongoing ‘Digital Campaign Season-17.’ Earlier, another customer Jashim Uddin from Ramu upazila of Cox’s Bazar also got 101 free products after buying a Walton fridge.
Walton has been conducting the ‘Digital Campaign’ across the country to accelerate the initiative to building a customer database for delivering online-based swift and best after-sales service.
Various benefits are given to customers to ensure their spontaneous participation in this process. Under the campaign, customers may get 101 free products or cash vouchers of up to Tk one lakh or sure gifts.
On last Monday, Walton Plaza’s Chief Executive Officer (CEO) Mohammad Rayhan, Walton Hi-Tech Industries’ Deputy Managing Director (DMD) Humayun Kabir and Senior Executive Director popular actor Amin Khan officially handed over the 101 free products to Nazrul Islam at a function held at Morrelganj Walton Plaza.
Morrelganj Upazila Chairman Shah-E-Alam Bachchu and Vice-Chairman Mozammel Haque Mozam, female Vice-Chairman Fahima Khanam, local police station Officer in-charge Saidur Rahman and other Walton high-ups were also present.
Nazrul Islam, director of Bashundhara Diagnostic Complex and president of Sharankhola Diagnostic and Clinic Owners Association, purchased a 226-liter refrigerator from Morrelganj Walton Plaza on March 6.
Later he received an SMS on his mobile phone from Walton with the notification of getting 101 free products upon registration of the fridge under digital campaign.
The 101 free products included Walton fridge, AC, smart TV, washing machine, air cooler, microwave and electric oven, ceiling, pedestal, tornado and rechargeable fans and rice cooker.
Thanking Walton, Nazrul Islam said that he has been using Walton products at home and in his office.
“We are fully satisfied with Walton products because for their international standard and services with various facilities. I like Walton’s digital campaign concept and it is unbelievable that customers are getting 101 products with purchasing only one product,” he said, adding that his respect and trust on Walton have been increased as they kept their promises.
Walton Plaza’s CEO Mohammad Rayhan said Walton always provides best products and services to customers.
Usage of electronics products is increasing through such campaigns with strengthening national economy.
BGMEA urges EU to consider transition period extension
BGMEA President Faruque Hassan has urged the European Union to consider an extension of the transition period of GSP (EBA) from 3 years now to 6 years for ensuring smoother graduation.
He made the call while speaking at a seminar on “50 Years of EU-Bangladesh Partnership:
Charting Ahead on A Legacy of Success” organized by Research and Policy Integration for Development (RAPID) in Dhaka on March 14.
Dr. Mashiur Rahman, Economic Affairs Adviser to the Prime Minister, attended the seminar as the chief guest while Charles Whiteley, Ambassador and Head of Delegation, Delegation of the European Union to Bangladesh was present as special guest.
Professor Dr. Imtiaz Ahmed, Professor Dr. Lailufar Yasmin, UNDP Country Economist Dr. Nazneen Ahmed also spoke at the seminar.
Dr Abdur Razzak, chairman of RAPID, presented the keynote addres.
In his speech, Faruque Hassan pointed out the challenges for Bangladesh after its graduation from the LDC category.
He stressed economic diplomacy and industry capacity development to face challenges.
“The government of Bangladesh has taken a number of steps required to mitigate the challenge, particularly through engaging diplomatically, as well as at the local industry level,” he said.
He also said, “In addition to building the capacity of the industries, the overall efficiency of the country's trade logistics infrastructure will be crucial, and the government is implementing a number of mega projects to fill in that gap.”
BGMEA for stakeholders collaboration to achieve shared sustainability goals
BGMEA President Faruque Hassan has urged all the stakeholders, including buyers, to join hands together to achieve shared goals around sustainability in order to secure a safe and bright future.
“To what extent climate change will change the world is still unclear, but one thing is certain: businesses can no longer grow at the cost of the environment. The decisions taken now and in the coming years will affect the planet,” he said.
All would have to play their respective roles to protect the planet from peril, the BGMEA chief said.
He made the comments while addressing a seminar on “Promoting circularity for a sustainable RMG sector in Bangladesh” as a special guest.
Salman F Rahman MP, Private Industry and Investment Advisor to the Prime Minister, Charles Whiteley, Ambassador and Head of Delegation, Delegation of the European Union to Bangladesh; Winnie Estrup, Ambassador of Denmark to Bangladesh, Silje Fines Wenebbo,?Charge the Affairs of Norway Embassy and Tahrin Aman, President, Nordic Chamber of Commerce and Industry, also spoke at the seminar organized by NCCI and Nordic embassies in Dhaka on March 14.
Highlighting the achievements of Bangladesh’s garment industry, Faruque Hassan said, “Bangladesh RMG industry’s march toward environmental sustainability is unprecedented and unmatched anywhere in the world. It is also a manifestation of Bangladeshi apparel makers’ commitment to take the sector forward and meet ESG standards throughout the manufacturing process.”
Calling on brands to support their suppliers in sustainability efforts, he said, “Brands are pressing us for a net-zero road map in line with their own strategic targets of becoming climate neutral. When the brands are setting ambitious targets, it is their responsibility to make sure that no one is left behind in the supply chain.”
He also put emphasis on assisting SMEs in adopting sustainable practices.
“We also have to keep in mind that SMEs represent the majority of the BGMEA member factories, and given the ambitious goals made by brands towards sustainability, it is harder for them to invest in issues like circularity or overall climate change. So, it is imperative that we keep them in our mind while designing the business model or offering a collaborative approach.”
FBCCI pleased with huge response to Bangladesh Business Summit 2023
The Federation of Bangladesh Chamber of Commerce and Industry (FBCCI) has claimed that Bangladesh Business Summit 2023 succeeded in catching the attention of global investors to the potential of Bangladesh.
Speaking in a press conference on the concluding day of Bangladesh Business Summit 2023, FBCCI president Md Jasim Uddin said for the first time in Bangladesh more than 300 foreign entrepreneurs participated at such an event along with 400 local entrepreneurs.
This enthusiasm among both domestic and global investors proved that the arrangement of the business summit was very successful, he said.
Read more: Bangladesh a safe destination for investment, speakers tell FBCCI-sponsored Business Summit
The country’s economy will surpass several trillion dollars by 2041 if the current growth and production continues, he said.
Jasim said several countries including Saudi Arabia and China gave a commitment to increase investment in Bangladesh during the business summit.
Large numbers of both foreign and domestic investors are searching for the opportunities here for investment and entrepreneurship, he said.
In reply to a query, the FBCCI president said global manufacturers would invest in Bangladesh due to three reasons: the number of the workable population here, the local consumer market, and the geopolitical advantage of the country.
Jasim said Bangladesh set an example by keeping the manufacturing sector operational and supply chain active during the Covid-19 pandemic.
Read more: Saudi Arabia interested to invest in Bangladesh's energy, port sectors
Bangladesh is holding a top position in the world when it comes to green apparel factories, he said.
The concluding day saw several plenary sessions on Circular Economy, Public Private Partnership, Hi-Tech and Automobile, SMEs Development, Pharmaceuticals and Health Care, Special Economic Zone, Women’s Participation, Tourism, and Blue Economy.
Speakers in these sessions focused on setting a long-term policy for sustainable funding, energy supply, infrastructure, port handling, and taxation along with good governance in all the sectors for growing investment.
Several ministers, parliament members, bureaucrats, business leaders, economists, and local and foreign business delegations participated in a different session and share their views on developing business in Bangladesh.
The FBCCI organized the business summit 2023 from March 11-13 to celebrate 50 years of the anniversary of the federation. Prime Minister Sheikh Hasina inaugurated the three-day summit at the Bangabandhu International Conference Center (BICC) on Saturday.
Read more: Beximco to produce medicines in Saudi Arabia from next year
Ministers from seven countries, including the United Kingdom, Saudi Arabia, China, Bhutan, and the United Arab Emirates, chief executive officers of 12 multinational companies, and business leaders from 17 countries participated in the summit.
Asian shares mostly sink on jitters after US bank failure
Asian shares mostly fell Monday, shaken by a Wall Street tumble that set off worries the biggest United States bank failure in nearly 15 years might have ripple effects around the world.
But the falls were relatively subdued because of reassurances from U.S. officials that financial shocks would be mitigated.
Japan's benchmark Nikkei 225 slipped 1.6% to 27,685.86 in morning trading. Australia's S&P/ASX 200 lost 0.3% to 7,125.90. South Korea's Kospi shed 0.4% to 2,385.25.
Hong Kong's Hang Seng rose 1.4% to 19,594.07. The Shanghai Composite rose 0.3% to 3,238.98, as Chinese shares tracked a gain in U.S. futures. Dow futures were up 1.1% at 32,516.00. S&P 500 futures rose 1.4% to 3,952.50.
The recent developments in Chinese politics have also worked as a stabilizing factor. Major posts, including the governor of the Bank of China, as well as other political leaders, were announced, signaling a continuation of policy.
Also Read: Startup-focused Silicon Valley Bank becomes largest bank to fail since 2008 financial crisis
Before trading began in Asia, the U.S. Treasury Department, Federal Reserve and FDIC said Sunday that all Silicon Valley Bank clients will be protected and have access to their funds and announced steps designed to protect the bank’s customers and prevent more bank runs.
Regulators closed Silicon Valley Bank on Friday amid a run on the bank, which was the second-largest U.S. bank failure, behind the 2008 failure of Washington Mutual. They also announced Sunday that New York-based Signature Bank was being seized after it became the third-largest bank failure in U.S. history.
Following two bank failures, worries about financial stability and liquidity concerns were dominating the market landscape, said Stephen Innes, managing partner at SPI Asset Management in Hong Kong.
He said traders made nervous by the weekend's news could create “a ready-aim-fire Monday open.”
“With the market likely headed for a more turbulent period with US inflation on a collision course with Bank ‘theater of tragedy,’ now is probably not the best time for investor euphoria," Innes said.
But the sense that U.S. authorities were taking some steps to limit “the contagion effect” had somewhat of a calming effect, although “markets remain skittish” in Asia, said Venkateswaran Lavanya at Mizuho Bank.
Shares had tanked Friday on Wall Street, with the S&P 500 dropping 1.4% to cap its worst week since September.
The Dow Jones Industrial Average fell 345 points, or 1.1%, while the Nasdaq composite sank 1.8%. The S&P 500 fell 56.73 points to 3,861.59. The Dow lost 345.22 to 31,909.64, and the Nasdaq dropped 199.47 to 11,138.89.
Some of the sharpest drops on Wall Street last week came from the financial industry. First Republic Bank tumbled 14.8%, while Charles Schwab lost another 11.7% after dropping 12.8% Thursday. Larger banks, which have been stress-tested by regulators following the 2008 financial crisis, held up better. JPMorgan Chase rose 2.5%.
In Tokyo trading, banking issues were sold, with MUFG Bank falling nearly 4%, echoing such falls on Wall Street. Shares in Mitsui Sumitomo Financial Group dipped 4.7% in morning trading.
Worries were growing recently that interest rates are set to go higher than expected after the Fed Reserve said it could reaccelerate the size of its rate hikes. The Fed is focusing on wage growth in particular in its fight against inflation. It worries too-high gains could cause a vicious cycle that worsens inflation.
Traders now largely expect the Fed to stick with a modest 0.25 point hike. Last month, the Fed slowed to that pace after earlier hiking by 0.50 and 0.75 points. The Fed has already raised rates at the fastest pace in decades and made other moves to reverse its tremendous support for the economy during the pandemic.
In energy trading, benchmark U.S. crude lost 26 cents to $76.42 a barrel. Brent crude, the international standard, fell 35 cents to $82.43 a barrel.
In currency trading, the U.S. dollar fell to 134.40 Japanese yen from 134.96 yen. The euro cost $1.0694, up from $1.0643.
Avery Dennison partners with UNICEF to expand reach of Mothers@Work in Bangladesh
Avery Dennison, a global materials science and digital identification solutions company, has teamed up with United Nations Children's Fund (UNICEF) to support the Mothers@Work program, a national initiative, that promotes maternity rights and childcare support to women workers in the ready-made garments (RMG) sector in Bangladesh.
Through this partnership, the Avery Dennison Foundation will provide funding of $200,000 over two years to expand the program in 160 more RMG factories in Bangladesh. This will help build the capacity of their 2,000 staff including health workers and care providers, and strengthen initiatives that provide maternity protection and breastfeeding support in the workplace, including providing breastfeeding spaces and breaks, paid maternity leave, healthcare, employment protection, and a safe work environment for working mothers and pregnant women.
The collaboration was announced at an event held in the national capital on March 12, 2023, in the presence of representatives of the Bangladesh Garment Manufacturers Association (BGMEA) and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA). Bangladesh’s garment industry is the second largest clothing exporter in the world, contributing about 11 percent to the country’s Gross Domestic Product.
However, more than 80 percent of apparel industry workers are female, without the right infrastructure for infant care. The funding will enhance the protection of maternity rights through BKMEA and BGMEA and support the RMG factories in establishing an environment for breastfeeding and childcare facilities for women workers in the workplace.
In addition to providing a core grant for the Mothers@Work program, Avery Dennison is also organizing a fundraising campaign involving its employees. Under this campaign, artwork by children of employees will be auctioned, and products created with the artwork will be sold online, with all proceeds going to the Mothers@Work initiative.
Speaking on the occasion, Kenny Liu, vice president and general manager, South Asia & EMEA, Apparel Solutions, Avery Dennison, said, “Avery Dennison is committed to improving the livelihood and diversity of garment workers. We are proud to partner with UNICEF in the Mothers@Work program to support would-be and new mothers at the ready-made garment and knitwear factories. This aligns with our 2030 sustainability goal of making a positive social impact on our people and communities. Our values of sustainability and diversity, including inclusion and empowerment of women drive us to create a supportive environment for all our workers, and we will continue to work towards a sustainable future.”
Sheldon Yett, UNICEF representative to Bangladesh, said, “Breastfeeding spaces, childcare facilities, paid maternity leave and safe work environments are not just central to the well-being of working mothers and their children, but also to the success of businesses competing for the best staff. UNICEF is grateful for the generous support from Avery Dennison, and for Avery Dennison’s efforts to meet the rights of children and their mothers working in the Bangladesh garment sector.”
In collaboration with the Ministry of Health and Family Welfare, the Ministry of Labour and Employment of the Government of Bangladesh, and the ILO BetterWork Bangladesh program, the Mothers@Work program was implemented in 113 RMG factories during 2017-2021. With the current support from Avery Dennison, 160 more RMGs will be reached with the Mother@Work program interventions over the next two years, and 144,000 female workers will be made aware and informed about maternity rights, breastfeeding support services, and nutritional requirements during pre and post pregnancy.
The participation of civil society organizations and most importantly, the RMG industry associations BGMEA and BKMEA has solidified the program base for this initiative. The long-term goal is to mainstream Mothers@Work in the RMG sector to reach all female workers by 2030.
Bangladesh a safe destination for investment, speakers tell FBCCI-sponsored Business Summit
Speakers in different plenary sessions on the second day of the Bangladesh Business Summit 2023 said that the country is secure for investment with the advantage of a low-cost workforce and lucrative tax exemption offers for both domestic and foreign investors.They said Bangladesh has also the advantage of being the hub for regional connectivity for several big markets of Asia.
Commerce Minister Tipu Munshi said that investment in Bangladesh is much more affordable, attractive, and safe than in other countries of the world. China, Korea, and Japan have already invested here, he said.
“The development work of 100 economic zones of the country has also progressed. There is an export target of $100 billion by 2031,” he added. Prime Minister's Advisor on Private Industry and Investment Salman F Rahman said Bangladesh has a more affordable and safer investment environment than other countries in the world.“Investing in this country will save 47 to 84 percent of cost for workers, and 41 to 69 percent of operational spending,” he said.State Minister for Foreign Affairs Shahriar Alam said, “Infrastructure development has taken place around our mega project. Many other developments, including Padma Bridge, Karnaphuli Tunnel, and Payra Bridge have been made to facilitate investment and business.Bangladesh has the most green factories in the world. The top cleanest green factory in the world is also in the country, he said.“We have a safe working environment, come here, we have all facilities, for investors,” said Alam.
Ministers from seven countries, including the United Kingdom, Saudi Arabia, China, Bhutan, and the United Arab Emirates, chief executive officers of 12 multinational companies, more than 200 foreign investors’ representatives, and business leaders from 17 countries participated in the summit. FBCCI organised the summit to celebrate 50 years of its foundation.FBCCI called for highlighting Bangladesh's achievements in the economy in 50 years.
Prime Minister Sheikh Hasina inaugurated the three-day summit at the Bangabandhu International Conference Centre (BICC) on Saturday.On Monday (March 13) several sessions will be held on circular economy, public-private partnership, hi-tech and automobiles, SMEs development, pharmaceuticals and healthcare, Special Economic Zone, women’s participation, tourism and blue economy.
AMTOB gives 16 proposals including reduction of corporate tax rate to NBR
The Association of Mobile Telecom Operators of Bangladesh (AMTOB), a platform representing all telecom operators in the country, presented 16 proposals including a reduction of the corporate tax rate on mobile phone operating companies in the next budget.
"We propose to remove or reduce the minimum tax. Mobile operators are required to pay a minimum tax of 2% of their annual gross revenue which is in conflict with the Income Tax Act. Paying minimum tax despite loss in business means paying tax out of capital which is a barrier to business expansion," AMTOB Secretary General Brig Gen (retd) SM Farhad said during the pre-budget discussion meeting with the National Board of Revenue (NBR) on Sunday.
AMTOB also proposed to withdraw the minimum turnover tax and abolish the tax of Tk200 imposed on SIM cards.
"There is no alternative to removing or reducing the minimum tax in favour of sustaining the industry and building the Digital Bangladesh, as announced by the government," he added.
"The high rate of corporate tax should be reduced. The general corporate tax rate in the country is 27.5% for unlisted companie and 20% to 22.5% for listed companies. However, despite being an essential service, Bangladesh's mobile sector has to pay a high rate of corporate tax. The tax rate is 40% for listed mobile operators and 45% for unlisted companies," he added.
"In terms of taxation, instead of classifying mobile operators as a separate category, we demand that they be reorganised in line with other companies and that the tax be reduced at that rate," he further said.
The AMTOB Secretary General also said that the mobile phone sector is one of the sectors that provide the most revenue to the government in Bangladesh.
"We need to remember that the top three operators in the mobile sector are all foreign investors and their contribution to the socioeconomic development of the country is immense,” he said.
He said that from the main source of people's telecommunication and internet access to banking, mobile money, ride sharing, e-commerce, education, or e-courier, all sectors are directly or indirectly dependent on mobile.
“As the growth of mobile service providers increases, customers will get better quality services and the government will get more revenue," he added.
"Even then it is seen that the government is imposing new taxes every year in this sector. If the growth of the mobile sector is not encouraged by rationally considering the taxation system of the mobile sector, it will have an impact on all other sectors," SM Fahad added.
Besides, there is no clear guideline for VAT removal for Govt. regulatory organisations as per new VAT & SD ACT 2012. Government agencies and regulators are not following VAT- control proportionately.
“For this reason, operators are ultimately suffering. There needs a clear guideline for solving this problem,” he said.
He said that there is no separate HS coding system for telecom machinery, equipment and software , and the organisations have to import under different HS code.
“HS coding systems are currently hampering telecom operators' antenna designing and customisation solutions. This complicates unreasonable tax assessments and VAT rebates,” he added.
Bangladesh RMG sector committed to ensuring workers healthcare: BGMEA President
The ready-made garment industry of Bangladesh is committed to ensuring safer and healthier environment for workers, especially women, who are at the heart of the industry, said Faruque Hassan, President of BGMEA.
“As we recognize the crucial role that workers play in this industry, we also consider it as an imperative to take care of their health which directly correlates with their productivity,” he said.
“Our proactive engagement with the government of Bangladesh and UNICEF in the Mothers@Work project is an example of how the industry is trying to improve the healthcare of women workers in the sector,” he remarked while speaking at a program held at UNICEF House in Dhaka on March 12.
Kenny Liu, Vice President and General Manager (Retail, Branding and Information Solutions), South Asia, Europe, Middle East and Africa, Avery Dennison; Siddhartha C Reddy, Vice President (Finance, Solutions Group), Avery Dennison, USA; Sazzad Hossain, General Manager, Avery Dennison, Bangladesh were present at the program while from UNICEF, Dr. Saja Farooq Abdullah, Chief of Field Service; Dr. Safina Abdulloeva, Nutrition Manager; Elisa Cortes Gil, Chief Resource Mobilization and Partnerships and Piyali Mustphil, Chief, Nutrition also attended the event.