Business
Special bonds issued to pvt banks to clear liabilities with power plants
In a significant move to stabilize its power sector, the Bangladesh government has secured Tk 2,062 crore through the issuance of special bonds. This initiative, aimed at clearing outstanding liabilities to private power plants, involves a collaboration with two prominent private banks: City Bank and Pubali Bank.
A comprehensive agreement was inked on Wednesday at the Secretariat, marking a critical step in addressing the financial challenges faced by the power sector. As per this agreement, the government will issue bonds worth Tk 1,985 crore to City Bank and Tk 77.50 crore to Pubali Bank, as confirmed by the Ministry of Finance.
Sources reveal that the government’s inability to disburse subsidy funds had left private power plants struggling to meet their financial obligations, leading some to the brink of insolvency.
Read: Bangladesh's imports drop over 18% in first half of FY2023-24
To counter this crisis, the government’s issuance of special bonds comes with an 8 percent coupon rate, mirroring the repo rate set by Bangladesh Bank. Notably, any future fluctuations in the repo rate will correspondingly adjust the bond interest rate.
At the term’s end, the government will settle the bank dues along with interest, subsequently reclaiming these bonds. Unlike typical 15–20 year bonds, these special bonds have a maximum tenure of 10 years, a move tailored to the urgent needs of the power sector.
Key players in the power sector, including Summit Power, United Power, Confidence Power, Baraka, Kushiara, Doreen, and Akron Power, are among the beneficiaries of this initiative. The Finance Division also disclosed plans for phased agreements with other banks, including BRAC Bank and Bank Asia, to further address the sector’s liabilities.
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Reflecting on the agreement’s significance, managing directors of several banks expressed optimism. While banks can leverage these bonds with Bangladesh Bank, it provides the government with crucial financial breathing space.
This strategic financial maneuver stands as a testament to the government’s commitment to ensuring the stability and sustainability of Bangladesh’s power sector.
Bangladesh's imports drop over 18% in first half of FY2023-24
Amid multi-faceted economic challenges, Bangladesh's imports dropped 18.19 percent year on year to 33.68 billion U.S. dollars in the first half of the 2023-24 fiscal year from July 2023 to June 2024.According to latest statistics of the Bangladesh Bank (BB), the settlement of letters of credit (LCs), generally known as actual imports, stood at 33,683.51 million dollars in July-December compared to 41,175.28 million dollars in the same period a year earlier.
In the July-December period, the BB data showed, Bangladesh's overall import orders also declined by 5.33 percent year-on-year.
The overall import orders, officially known as the fresh opening of import letters of credit, decreased to 32,929.31 in July-December against 34,784.72 million dollars in the same period of the last fiscal year, it showed.
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Bangladesh's trade deficit in the last 2022-23 fiscal year dipped by 48.41 percent year-on-year to 17.16 billion dollars amid shrinking forex reserves-depressed imports.
In its bid to boost Bangladesh's shrinking forex reserves, which now stand at around 20 billion dollars, the bank has taken various measures to discourage imports.
The central bank has recently set policies aimed at tackling challenges affecting the economy. The BB said that the main objective of its strategic directives in the half-yearly monetary policy, spanning from January to June 2024, is centered on upholding a vigilant, hawkish approach to monetary policy until inflation rates are effectively reined into a desired level.
The BB said it finds itself at a critical juncture as the economy navigates through the latter half of the fiscal year, facing a multifaceted economic landscape.
The bank said it has decided to increase its policy rate by 25 basis points to 8 percent from 7.75 percent to deal with the demand-side pressures while ensuring the required flow of funds to the priority and production sectors to promote supply-side activities.
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This was the ninth straight rate hike in the past 20 months as consumer prices have remained at an elevated level.
Bangladesh's inflation was at 9.93 percent last October, above the central bank's then-target of 6 percent for the current fiscal year from July 2023 to June 2024.
BCC fines Diamond Egg, CP for raising egg prices in collusion
The Bangladesh Competition Commission (BCC) has fined Tk 3.5 crore against two egg supply companies after probing price hiked abnormally.
The commission fined Diamond Egg Limited Tk2.5 crore and CP Bangladesh Company Limited Tk1.0 crore as the allegations of abnormally increasing the price of eggs in collusion with different companies have been proven.
The BCC filed a case against the two companies. After the hearing of the case, the commission ordered this penalty on January 22.
Within 30 days of the announcement of the verdict, the amount of the penalty should be deposited in the concerned department of the BCC. If not, a fine of Tk1.0 lakh per day will be added in light of the Competition Act.
In the ninth meeting of the BCC, based on the report of the National Directorate of Consumer Rights Protection and the report published in an online media headlined 'Tk518 crore loot from the egg and chicken market in 15 days' and the news published in various newspapers and print media, the decision was taken to investigate this matter.
According to the brief description of the complaint, the investigation report initially shows the crime of violation of the competition law by setting the sale price of eggs in the market abnormally and limiting or controlling the supply of eggs in the market against CP Bangladesh Company Limited, Diamond Egg Limited, and several other organisations.
The summary of the verdict said that the BCC ordered the penalty on both companies based on the investigation report and the written and oral arguments of the lawyers.
To ensure good governance in banks, chairman should be from independent directors: Dr Atiur
Bangladesh Bank's former governor Dr Atiur Rahman has suggested appointing a chairman from the independent directors of the board of directors of banks to ensure good governance in private banks.
He said this at a lunch meeting organised by the Foreign Investors Chamber of Commerce and Industry (FICCI) at a hotel in Gulshan in the capital on Wednesday.
Under the chairmanship of FICCI President and Managing Director of Unilever Bangladesh, Javed Akhtar, businessmen from various sectors, and representatives of development partner countries joined the event.
Dr Atiur said that ensuring good governance in the financial sector is one of the challenges now. For that reason, professional people should be brought in as independent directors.
Besides, he said that implementation of the new Bank Company Act and the merger of weak banks should be encouraged to ensure that people do not become defaulters voluntarily, he said.
Atiur presented an article titled 'Bangladesh on the path to the trillion-dollar economy: possibilities and challenges'.
“Those who claimed as the main owners of private banks are not the main owners; Rather, bank depositors are the principal owners.”
So, if the independent directors become the chairman, they will be the representatives of the real owners of the banks, he said.
Atiur said that Bangladesh has developed amazingly over the last 50 years, and if the growth rate remains 5 percent, Bangladesh will be a trillion-dollar economy by 2040.
He pointed out that there are several challenges in achieving that goal, such as inflation, deficit in financial accounts and reduced investment.
Several steps need to be taken to solve these problems including stabilising the foreign exchange rate. This will reduce inflation as well as increase foreign investment, he said.
NBR awards 54 public and private companies as highest taxpayers
The Large Taxpayers Unit (LTU), a wing of the National Board of Revenue (NBR), handed over awards to 54 public (state-owned) and private companies as the highest taxpayers for the fiscal year 2022-2023.
On the occasion, an award-giving ceremony was held at NBR's Multipurpose Hall in Agargaon on Wednesday.
NBR Member (Tax Administration and Human Resource Management) Syed Mohammad Abu Dawood, Tax Commissioner of Large Taxpayer Unit Iqbal Baha handed the award to the winners in different categories.
The winners in banking category-Islami Bank Bangladesh PLC, Standard Chartered Bank, BRAC Bank PLC, Dutch-Bangla Bank, Limited Category, Eastern Bank PLC, The City Bank PLC, United Commercial Bank PLC, The Hong Kong & Shanghai Banking Corporation Limited, Prime Bank PLC, Al Arafa Islami Bank plc, IFIC Bank plc First Security Islami Bank plc, Trust Bank, Mutual Trust Bank plc, Agrani Bank plc, The Premier Bank plc, Bank Asia Limited, Dhaka Bank plc, National Credit and Commerce Bank plc, Shahjalal Islami Bank plc, Pubali Bank plc, AB Bank plc and Jamuna Bank plc.
Non-banking finance category-Infrastructure Development Company Limited, IDLC Finance Limited, Bangladesh Infrastructure Finance Fund Limited, DBH Finance PLC, and Investment Corporation of Bangladesh.
Insurance category-American Life Insurance Company (Metlife , General Insurance Corporation Category, National Life Insurance Company Limited and Green Delta Insurance Company Limited.
Telecommunications-Grameenphone Limited Service sector-Power Grid Company of Bangladesh Limited received the award.
Engineering Category-BSRM Steels Limited, Bangladesh Steel Re-Rolling Mills Limited, and Rangs Limited.
Food and accessories-Nestlé Bangladesh Plc, Olympic Industries Limited, Transcom Beverages Limited, and New Zealand Dairy Products Bangladesh Limited.
Energy Category-Titus Gas Transmission and Distribution Company Limited and Chevron Bangladesh Blocks Thirteen and Fourteen Limited
Spinning and Textiles-Square Textiles plc and Coats Bangladesh Limited.
Medicine and Chemistry-Square Pharmaceuticals plc, Beximco Pharmaceuticals Limited, and Healthcare Pharmaceuticals Limited.
Print and electronic media category-Mediastar Limited.
Leather industry-Bata Shoe Company (Bangladesh) Limited and Apex Footwear Limited.
Other categories-British American Tobacco Bangladesh Company Limited.
Apart from this, Grameenphone Limited and Bangladesh Bank were given separate honours for deducting tax at source.
Uber appoints Nasheed Ferdous Kamal as Country Head
Uber, the ridesharing app, has announced the appointment of Nasheed Ferdous Kamal as the Country Head for Uber Bangladesh.
Nasheed is a seasoned leader with over 18 years of experience in marketing, product and pricing strategy, new business development, customer lifecycle management, revenue and base growth, said the company on Wednesday.
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Before joining Uber, Nasheed was the General Manager at Robi Axiata Limited where she led the company’s Airtel brand Base Management and Customer Lifecycle Management in the region.
She is an alumnus of the University of Windsor and North South University.
Commenting on the appointment, Abhishek Padhye, Head of Regional Business Operations, Uber India and South Asia, said, “We are delighted to welcome Nasheed as the new head of our business in Bangladesh. Her addition to our team is a significant step towards reinforcing Uber’s footprint and ensuring sustained growth in Bangladesh. Nasheed brings robust experience from the telecom industry and we are confident that under her leadership, we will explore further avenues of growth in Bangladesh.”
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Commenting on the appointment, Nasheed said: “Uber has transformed the way people move in Bangladesh, while also creating work opportunities for lakhs of people. I am excited to join Uber and work alongside the talented team, as we work together on building shared mobility business in Bangladesh while committing to our sustainability goals.”
Uber started operations in Bangladesh in 2016 with a mission to power mobility. In over seven years of operations, Uber has built a strong position in the ridesharing ecosystem.
Plastic goods industry's international product fair in Dhaka from Wed
The 16th International Plastic Products Fair is scheduled to start tomorrow (Wednesday), with a four-day residency at the International Convention City, Bashundhara (ICCB) in the capital.
Shamim Ahmed, president of Bangladesh Plastic Goods Manufacturers & Exporters Association (BPGMEA) disclosed details of the event at a press conference held on Monday.
Shamim said that there would be 961 stalls by 654 companies, the majority of them based abroad, at the fair.
Minister of Industries Nurul Majid Mahmud Humayun will inaugurate the fair.
Different types of plastic products and modern equipment required for the production of plastic products will be displayed at the fair.
At the press conference, the president of BPGMEA said, 654 local and foreign companies involved in producing and supplying plastic sector machinery, moulds, and raw materials will participate in the fair.
Some 800 of the stalls will be by 600 companies coming from 20 different countries, while the remaining 161 will be spread among 54 domestic companies. Participants at the fair are divided into 15 categories. These include household products, crockery, packaging materials, plastic moulds, toys, pharmaceuticals, furniture, melamine, ready-made clothing materials, PP oven bags, automobiles and electric and electronic products.
The BPGMEA leader said that currently, plastic products are in 12th position on the list of export-earning industries.
In the 2021-2022 fiscal, plastic products worth USD $166 million crore were exported from Bangladesh. In the last fiscal 2022-2023, the figure grew appreciably to $210 million. The growth of over 26 percent year-on-year bodes well for the industry's upward trend.
Currently, plastic products made in Bangladesh are being exported to 126 countries of the world including the USA, Canada, and the European Union.
The press conference was also attended by former BPGMEA president of ASM Kamal Uddin, and other leaders of the industry.
Islami Bank opens Premier Stall at DITF
Islami Bank Bangladesh PLC has opened Premier Stall at the Dhaka International Trade Fair.
Mohammed Monirul Moula, Managing Director and CEO of the bank, formally inaugurated the stall No. 71 on Tuesday at Bangabandhu Bangladesh-China Friendship Exhibition Center (BBCFEC), Purbachal, said a press release.
Md. Maksudur Rahman, Senior Executive Vice President, Md. Mizanur Rahman Bhuiyan, Executive Vice President, Md. Nasir Uddin and Nazrul Islam, Senior Vice Presidents, A M Shahidul Amran, Senior Assistant Vice President and Dipok Chandra Saha, Officer-in-Charge (OC) of Rupganj, Narayanganj along with other executives and officials of the bank were present on the occasion.
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Islami Bank stall is providing modern banking and information services to visitors, customers, and traders. Merchants can deposit their VAT, tax, and other fees of daily transactions through the Automated Challan System (ACS) at the stall.
Services provided at the premier stall include account opening, cash deposit, and withdrawals through ATM and CRM Booth.
Besides, information related to deposit and investment, digital banking solutions CellFin App, mCash, agent banking, and internet banking are available.
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In addition, sellers are also getting the opportunity to deposit their money at any time through CRM, it said.
Walton records profit growths in July-December of FY 2023-24
Walton Hi-Tech Industries PLC has recorded profit growth during the period July-December of the current Financial Year 2023-24.
The Bangladeshi electronics giant posted around 23 times or 2,270 percent higher profits during the July-December period of 2023, compared to the same period of the previous year, according to a press release.
Walton Hi-Tech also witnessed substantial growth in major financial indicators, including Operating Profit Margin, Earnings Per Share (EPS), Net Asset Value Per Share (NAVPS) etc. during the first six months (July-December) of the current FY 2023-2024, it said.
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Such picture of the company's financial indicators was reflected in its Q2 un-audited Financial Statements for the period ended December 31, 2023.
The report was published after reviewed and approved by the Company's Board of Directors in its 37th meeting held on Monday (January 22, 2024).
According to the published report, Walton Hi-Tech posted Tk 340.35 crore profit during the period from July to December, 2023 as against the profits of Tk 14.36 crore in the same period of the previous year.
In the Second Quarter (October-2023 to Decmber-2023), the profit of the Company was increased to Tk 138.28 crore as against of Tk 60.46 crore of the corresponding period of the previous year.
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The amount and percentage of finance costs during the period (July-2023 to December-2023) is significantly lower than the comparative period because of less impact of devaluation of taka against foreign currencies like Euro and USD. However, the company suffered foreign currency losses during the period of July 2023 to December of 2023 amounting to Tk 43.75 crore, which was Tk 336.10 crore in the corresponding period of the previous year.
As a result, the Company's EPS for the period ended December 31, 2023 stood at Tk 11.24 as against of Tk 0.47 of the same period of the last year. As on December 31 of 2023, the Company's Net Asset Value Per Share (NAVPS) stood at Tk 244.26 without revaluation and Tk 345.75 with revaluation.
In that period, the Company's Net Operating Cash Flows Per Share (NOCFPS) stood at Tk 27.16.
During the period from July 2023 to December 2023, the percentage of finance costs was reduced significantly. In that period, the percentage of finance costs against sales was recorded at 7.51 percent, which was 18.15 percent in the same period of the previous year.
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At the end of the Second Quarter of current Financial Year (2023-2024), the Company's total Finance Costs were recorded at Tk 177.93 crore, which was Tk 469.33 crore in the same period of the previous year. As a result, the Company's Profit After Tax for the period ended December 31, 2023 stood at 14.37% as against of 0.56% of the same period of the previous year.
However, the management of Walton Hi-Tech Industries PLC anticipated that the Company’s profits would be healthier in the next quarters of the current Financial Year.
Chinese delegation meets BGMEA leaders to discuss trade and investment potential
A delegation from China, comprising representatives from the China Knitting Industrial Association and the China Cotton Textile Association, visited the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) on Monday.
The visit aimed at exploring potential collaboration, particularly in the textile and apparel sector to derive mutual trade benefits.
The Chinese delegation included Lin Yunfeng, chairman of China Knitting Industrial Association, Jing Shenquan, vice chairman of China Cotton Textile Association, and Wei Wei, vice director of the Department of China Knitting Industrial Association.
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Besides, representatives from various Chinese companies specializing in textile machinery, chemicals, and raw materials were also part of the delegation.
During the visit, they met with BGMEA leaders including President Faruque Hassan, Senior Vice President S. M. Mannan (Kochi), Vice President Shahidullah Azim, and Vice President (Finance) Khandoker Rafiqul Islam.
BGMEA Directors Faisal Samad, Haroon Ar Rashid, Barrister Vidiya Amrit Khan, Md. Imranur Rahman, and Neela Hosna Ara were also present in the meeting.
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They discussed trade and investment opportunities, fostering collaboration, and expanding business scope between Bangladesh and China in the textile and apparel sector.
BGMEA President Faruque Hassan gave an overview of Bangladesh’s apparel industry, especially its strong emphasis on shift towards manufacturing high-value products, particularly man-made fiber-based garments.
He sought China’s investment in high-end textile and backward linkage industries in Bangladesh that would bring benefits to both sides.
He also emphasized China’s support in enhancing capabilities through the exchange of knowledge and technical expertise.
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He said the shift to non-cotton apparel would lead to an increase in demand for man-made fiber-based fabrics, chemicals, and other raw materials, and China is well-positioned to meet Bangladesh’s requirements.
President Faruque Hassan also highlighted the high potential for garment exports from Bangladesh to China.