Morning Newsflash Sunday, March 24, 2019

Transcription

1 Economy New budget to cross Tk 5 lakh crore Fiscal 's budget is set to cross the landmark of Tk 5 lakh crore as the Awami League-led government, fresh from being elected to a third term, looks to scale up implementation of the mega projects announced in previous terms.the upcoming national budget, due to be placed in the parliament on June 13, will likely be about Tk 5.23 lakh crore, up percent year-on-year, according to the finance ministry's preliminary projections, which were made in December last year.finance Minister AHM Mustafa Kamal has already held three pre-budget meetings with economists and parliamentary standing committees, while Prime Minister Sheikh Hasina has advised him to discuss different issues of the budget with his predecessor. Expectations will be high not just because it will be the new finance minister's first budget but also because it will be seen as the first concrete manifestation of how the government will go about fulfilling the pledges made in its election manifesto, said Zahid Hussain, lead economist of World Bank's Dhaka office. Economy Japan to get 500 acres for economic zone in Narayanganj The Bangladesh Economic Zones Authority (Beza) is going to organize a land handover ceremony for developing the 500-acre Japanese Economic Zone. Narayanganj District Administration will hand over the land located in Araihazar upazila to Beza at its conference room on Sunday.Speaking about the initiative, Beza Executive Chairman Paban Chowdhury, said: Establishment of an economic zone for Japan is a great move, which will prove that Bangladesh is a lucrative place for foreign investors."on March 5, the Executive Committee of the National Economic Council (Ecnec) approved the economic zone for Japanese investors, who are expected to spend Tk2, crore for development of the zone.while briefing reporters after the meeting, Planning Minister MA Mannan had said the project will be implemented by June 2023.He added that the total project cost is Tk2, crore, Tk crore of which will come from the government fund, while the remaining Tk2, crore will come as project assistance from Japan through the Japan International Cooperation Agency (JICA).

2 Banks & NBFIs Banks' capital base shrinking fast The banking sector's capital base eroded alarmingly last year on the back of an increase in default loans.as of December last year, banks' capital adequacy ratio (CAR), which determines the adequacy of banks' capital in keeping with their risk exposures, stood at percent, down from percent a year earlier, according to data from the central bank.banks were required to keep at least percent CAR in December last year as per the roadmap set by the central bank for implementing Basel III this year, according to a Bangladesh Bank official.from the first quarter of this year, their CAR must be percent or else they will face trouble in conducting business with foreign banks, experts said.car has to be maintained to safeguard interests of depositors and promote financial stability. State-sponsored cyberattacks on banks on the rise Banks & NBFIs Cyberattacks on financial institutions are increasingly being linked to nation-states, resulting in destructive and disruptive damages rather than just theft, according to a report by the Carnegie Endowment for International Peace.Out of 94 cases of cyberattacks reported as financial crimes since 2007, the attackers behind 23 of them were believed to be state-sponsored, the majority coming from countries like Iran, Russia, China and North Korea, the report found.the number of such cyberattacks linked to nations jumped to six in 2018 from two in 2017 and two in 2016, the report, which was co-developed with British defence company BAE Systems, showed.the report which was shared with Reuters a day ahead of its official release highlights growing concerns about the vulnerability in the financial system to cybersecurity threats. Banks & NBFIs Banks hit SMEs with double digit lending rates In an effort to let large businesses off the hook, banks are now increasing their grip on small businesses, decreasing lending rates for the former and increasing it for the latter.while 21 banks in the country have managed to bring their interest rates down to single digits on long term loans, most of the banks small and medium enterprise (SME) loan interest rates have spiked by 1-2%.According to Bangladesh Bank statistics, the concerned banks have decreased lending rates to single digits, but still charge 11 to 18% interest on SME loans.golam Kibria, an SME customer of Mutual Trust Bank, said his borrowing rate was 14.5% even in February, but from March 1 it rose to 16%, with a single letter from the bank.when contacted, Mutual Trust Bank officials said the increase was decided at a recent board meeting.

3 Fuel & Power Gazprom to get lion's share of energy exploration deals The government has agreed, in principle, to offer seven deals to Russian oil giant Gazprom for energy exploration in both offshore and onshore blocks.these include exploration work in the Chittagong Hill Tracts under block 22, signing strategic agreement with Petrobangla, conducting 2D seismic survey in offshore blocks in the sea, conducting deep drilling in five points in the country.we have received instruction from the high-ups in this regard recently and now we are engaged in preparing an MoU in line with the proposal, said a senior official of the Petrobangla who preferred to be unidentified.in this proposal, Gazprom sought US$ 160 million for deep drilling in five gas fields whereas the state-controlled BAPEX has assigned an Azerbaijan company for similar work in three fields at a cost of only $33 million, an official said, citing the gulf of difference between the two offers. Fuel & Power LNG boosts daily gas supply to mmcf The country's overall natural gas supply crossed the 3,200 million cubic feet mark a day (mmcf), boosted by the imports of liquefied natural gas (LNG).The lone operational floating, storage, re-gasification unit (FSRU) is currently re-gasifying around 511 mmcfd equivalent of LNG, which is the highest quantity of LNG re-gasification from Excelerate Energy's vessel at Matarbari in the Bay of Bengal.According to state-run Petrobangla, the total natural gas output was 3,204 mmcf per day, as of Thursday.Of the total output, local gas production companies produced around 1,035 mmcf or 31.8 per cent of the total daily output, international oil companies (IOCs) produced around 1657 or 50.8 per cent and the remaining 511 mmcf are re-gasified LNG.Of the total re-gasified LNG, the Karnaphuli Gas Distribution Company Ltd (KGDCL), dedicated to supplying natural gas to the Chattogram region, has been taking around 320 mmcf a day, or 70 per cent of the total quantity. mmcf Singer Bangladesh's majority stakes change hands Capital Market Arçelik, an Istanbul-based company, is set to buy Singer Bangladesh's majority shareholder Retail Holdings Bhold BV's 57 percent stakes for $75 million, as foreign companies continue to direct their gaze on to Bangladesh.The transaction is anticipated to close in April, said a press release from Retail Holdings on Friday.The remaining 43 percent of the shares of Singer Bangladesh, a major retailer of home appliance, is publicly owned.founded in 1955 as a subsidiary of Koç Holding, Turkey's largest industrial conglomerate and a member of the Fortune 500, Arçelik is a leading player in the home appliance industry with 21 manufacturing facilities in eight countries.it is the third largest home appliance company in Europe.Singer Bangladesh is the largest retailer of consumer durables in Bangladesh, with 385 stores and 720 wholesale dealers.

4 Capital Market GSP Finance to issue Tk 2.0b bond The board of directors of GSP Finance Company (Bangladesh) Limited has decided to issue coupon bearing bond worth Tk 2.0 billion, said an official disclosure on Saturday.The company will issue the bond for seven years tenure in the name and style GSP Non-Convertible Fully Redeemable Coupon Bearing Bond of Tk 2.0 billion through private placement.the issuance of bond is subject to approval from the regulatory authorities - Bangladesh Bank (BB) and Bangladesh Securities and Exchange Commission (BSEC), the disclosure added. The board of directors of the company has also recommended 18 per cent cash dividend for the year ended on December 31, 2018.The record date for entitlement of dividend is on April 15.The company s consolidated net profit after tax stood at Tk million for the year ended on December 31, 2018 as against Tk million in the previous year Telecommunication BTRC moves again to issue guidelines on ISP business Bangladesh Telecommunication Regulatory Commission has sent to the posts and telecommunications ministry draft guidelines on regulating and licensing of internet service providers after more than a year of putting the guidelines on hold.the telecom regulator initiated the fresh move following an instruction of prime minister s information and communication technology adviser Sajeeb Wazed Joy.Since 2014, the telecom regulator took a number of attempts for formulating guidelines on ISP business.in 2017, when the commission was at the final stage of formulating guidelines on ISP business, the telecom ministry had instructed BTRC to refrain from framing the guidelines at that moment.a strong opposition from ISPs forced the government to hold the formulation of the guidelines.the latest instruction of the PM s ICT adviser prompted the telecom regulator to send the guidelines to the ministry for approval, a senior official of the commission told New Age on Thursday.

5 Others Government to support over 450,000 Aus paddy farmers In order to increase high-yield Aus paddy output in the next fiscal year (FY ), the government is planning to provide seeds and chemical fertilizers free of cost to small scale farmers. As part of this incentive package of Tk4.18 crore, 459,226 farmers from all 64 districts of the country will receive support from the government.of the 1,365,412 hectares of land allocated for Aus paddy cultivation for FY , 61,354.8 hectares will receive free seeds and fertilizer under the incentive program.this will lead to rice production of 156,452 metric tons, worth Tk578.9 crore, while the hay harvested will be 246, 643 metric tons worth Tk24.66 crore, reaching a total production value of Tk crore. Others Jute millers call for lifting source tax Jute millers have urged the government to withdraw the source tax on export proceeds next fiscal year, according to a budget proposal of the Bangladesh Jute Mills Association (BJMA).The trade body, representing private millers, said an anti-dumping duty slapped by India in 2017 and falling demand in other markets has caused a slump in export receipts, putting the jute industry in trouble.so, the 0.60 percent source tax on export earnings should be waived, said the proposal submitted to the National Board of Revenue (NBR) in the middle of this month.jute goods exporters have been paying 0.60 percent withholding tax on export proceeds since July 1, The existing rate will expire on June 30 this year.jute and jute goods exports dipped 25 percent year-onyear to $ million in the July-January period of the current fiscal year of International Business More shale, who cares? Saudi Arabia pushes for at least $70 oil Budget needs are forcing Saudi Arabia to push for oil prices of at least $70 per barrel this year, industry sources say, even though US shale oil producers could benefit and Riyadh's share of global crude markets might be further eroded.riyadh, Opec's de facto leader, said it was steeply cutting exports to its main customers in March and April despite refiners asking for more of its oil. The move defies US President Donald Trump's demands for Opec to help reduce prices while he toughens sanctions on oil producers Iran and Venezuela.The export cuts are designed to prop up prices, sources close to Saudi oil policy say. Saudi officials say the kingdom's output policies are merely intended to balance the world market and reduce high inventories. The Saudis want oil at $70 at least and are not worried about too much shale oil, said one industry source familiar with Saudi oil policy.

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