TAXPAYERS TOTAL 2.75M UNTIL FEB - EBL Securities€¦ · MEXICO TURNS DOWN PROPOSAL FOR DUTY-FREE ACCESS OF BD PRODUCTS ... issues of the sector fa ced erosion, out of 18 with the

Daily News Flash, 5th March, 2017

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TAXPAYERS TOTAL 2.75M UNTIL FEB ................................................................................ 1

BILL SEEKS TO LOWER BSC SHARE'S FACE VALUE TO TK 10................................................. 2

14 SECTORS FACE EROSION, FIVE CLOSE HIGHER ............................................................... 3

BSEC TO GET NEW ICT SYSTEM ......................................................................................... 4

KNITWEAR EXPORTERS URGE KENYA TO CUT DUTY .......................................................... 5

MEXICO TURNS DOWN PROPOSAL FOR DUTY-FREE ACCESS OF BD PRODUCTS ................... 6

HC ORDERS 154 TANNERY OWNERS TO PAY TK 308.5 MILLION FINE .................................. 7

DSE TURNOVER NEARS ONE-MONTH LOW ........................................................................ 7

STOCKS BREAK THREE-WEEK WINNING SPELL ................................................................... 8

FOUR STRATEGIES TO MEET CAPITAL SHORTFALL IN BANKS ............................................ 10

BUDGET OUTLAY DECLINES BY 7.34% ............................................................................. 11

OIL PRICES RISE ON WEAKER DOLLAR ............................................................................. 11

STATE BANKS' RESCHEDULED LOANS TURN BAD AGAIN .................................................. 12

ISLAMI BANK BREAKS RULES IN APPROVING LOANS, BB FINDS ........................................ 13

INVESTORS SEE SNAP'S IPO AS 'TOO BIG TO FAIL' ............................................................ 14

BANGLALINK'S REVENUE GOES UP 3.4PC ........................................................................ 16

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TAXPAYERS TOTAL 2.75M UNTIL FEB The tax authority has identified more than 2.75 million taxpayers as of February last which is at least 0.25 million higher than the target set up to June 30 next. "We've identified 2.75 million tax payers until February against the target of 2.5 million up to June next," Md Nojibur Rahman, senior secretary to the Internal Resources Division and also NBR Chaiman disclosed it at a programme held in the city.

DSEX -10.47 Gold (Ounce) $1235.10 Dollar 79.38 (Buy) 79.39 (Sell) CSCX -33.02 Oil (Barrel) $53.20 Euro 83.71 (Buy)83.75 (Sell)


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He said the tax authority has taken a number of steps to raise awareness among the people about the taxes which he believes worked as the main driver for higher number of tax payers in the country. The NBR chief also said the institutional capacities have also been increased to handle the tax payers. "We don't say tax realisation rather we say tax mobilisation which was used to collect rents during the British era." He added. He was speaking as the chief guest at a Mock Parliament on "Government Wants to Make Income Tax Management Pro-people" on Saturday at the auditorium of Bangladesh Film Development Corporation (BFDC). Debate for Democracy organised the programme where East West University attended as the ruling party and Prime University as the opposition party. Chairman of Debate for Democracy Hassan Ahamed Chowdhury Kiron presided over the programme. Speaking on the occasion Md Nojibur Rahman said as a part of increasing institutional capacity, the NBR also significantly increased its manpower. "In 2009 we had only 9,000 employees. Now we have around 21,000 employees and we've formed a partnership with the Public Service Commission to provide required number of manpower to us," he added. Mr. Nojibur Rahman said the new VAT law will be effective from next July. "Now business identification number is set to be launched," he further said. NBR chief said they are considering forming a special tribunal to take legal actions against the tax evaders. "We are also strengthening the central income tax intelligence to ensure more surveillance on tax collection," he added. Admitting presence of some dishonest NBR officials, he said they categorised NBR officials in three types-green, yellow and red-where green category indicates honest officials and red category indicates dishonest officials. "We are adopting different ways to inform red officials and we have taken departmental actions so that they come back from their wrong path," he added. Hassan Ahamed Chowdhury Kiron said NBR should take required initiatives to remove the tax-fear among the people by making income tax management easier. "We should also come out from the mentality of tax evasion," he added. He urged the government to take proper action against the tax dodgers through the tribunals. Currently there are many cases lying pending with the courts filed by the alleged tax dodgers, he added. Source: http://print.thefinancialexpress-bd.com/2017/03/05/166422

BILL SEEKS TO LOWER BSC SHARE'S FACE VALUE TO TK 10 The face value of the Bangladesh Shipping Corporation's shares will be Tk 10 each instead of Tk 100 now, resulting in a 10-fold increase in the number of its scrip's in the capital market once the BSC Bill 2017 is passed by the parliament. The ongoing session of the parliament is expected to pass the bill. BSC Managing Director Commodore M Habibur Rahman Bhuiyan told the FE Saturday afternoon that the bill was placed in the parliament again on February 28. He declined to comment on whether the bill would be passed in the current session. Everybody was expecting the bill to be passed as it would further boost investment of shareholders and overall activities of the BSC. Sources in the BSC said the Bill was being updated after a long time. Minister


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for Shipping Shajahan Khan introduced the BSC Bill 2017 in the parliament on January 29 last. Later, it was sent to the Parliamentary Standing Committee on the Shipping Ministry for scrutiny. Chairman of the committee Major (rtd) Rafiqul Islam Bir Uttam finally placed the Bill in the parliament on February 28. Although the face value of all companies in the capital market is Tk 10 per share, that of the BSC remains Tk 100. The new bill has proposed the value at Tk 10. Once the bill is passed, the approved capital of the BSC will stand at Tk 10.0 billion (Tk 1,000 crore), of which the paid-up capital will be Tk 3.50 billion. A stock broker in Chittagong said investors were interested in buying BSC shares, but they could not as the face value is very high. If the face value is fixed at Tk 10 per share, the general investors will find it easier to put their money in. On passage at the bill, the BSC will perform activities, including procurement of ships, hiring as well as leasing out and owning vessels. It could also build or assemble ships and appoint shipping agents for vessel operations. Another important feature of the new Bill is that the BSC head office now in Chittagong could be shifted to Dhaka or elsewhere in the country with the permission of the government. The BSC has seven members on its managing board but the number of board members will rise to 13 after passage of the bill. The board will be chaired by the Shipping Minister while the secretary of the Shipping Ministry, joint secretary-ranked officials of the ministries of Finance and Commerce, Managing Director of the BSC, Executive Director (finance) and Executive Director (commercial), among others, will be board members. Source: http://print.thefinancialexpress-bd.com/2017/03/05/166423

14 SECTORS FACE EROSION, FIVE CLOSE HIGHER Most of the sectors witnessed price erosion last week on the Dhaka bourse that ended Thursday as investors opted for quick-profit on sector-specific issues. Of the 19 sectors listed on the Dhaka Stock Exchange (DSE), except corporate bonds, debenture and treasury bonds, the market capitalisation of 14 sectors faced correction while five closed higher, according to weekly analysis of DSE and the LankaBangla Securities. Market insiders said fuel and power, non-bank financial institutions, telecom and engineering saw major correction while bank, food & allied and textile issues showed investors' buying interest. Among the major sectors, fuel and power was the biggest loser, plunging by 3.76 per cent as 16 issues of the sector faced erosion, out of 18 with the sector's heavyweight Titas Gas Transmission and Distribution Company took a big jolt following the news that distribution margin of the company will remain unchanged despite gas price hike. Titas Gas was also the week's second highest loser after Salvo Chemicals. The state-run company's share price fell 11.82 per cent to close at Tk 52.20 each on Thursday, the last trading day of the week. Among other fuel and power issues, CVO Petrochemicals Refinery lost 5.50 per cent, followed by Doreen Power 4.30 per cent, GBB Power 3.55 per cent, Padma Oil 3.50 per cent, Linde BD 3.20 per cent, Meghna Petroleum 3.10 per cent, Summit Power 3.0 per cent and DESCO 2.80 per cent. The non-bank financial institution (NBFI) sector also faced 1.92 per cent correction followed by telecommunication with 1.53 per cent, engineering 1.45 per cent and cement 1.04 per cent. Among other sectors, travel & leisure lost 4.48 per cent, followed by services & real estate with 3.02 per cent, ceramics 2.66 per cent, paper & printing 2.02 per cent, mutual fund 1.91 per cent, miscellaneous 1.21 per cent, IT 0.95 per cent, jute 0.45 per cent and pharmaceuticals 0.22 per cent.


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The non-bank financial institutions lost 1.92 per cent despite 15 issues of the sector close higher, out of 23. However, the sector's large-cap issues faced erosion. Of the NBFI issues, IDLC Finance was the biggest loser, losing 7.50 per cent, followed by Uttara Finance 4.90 per cent, ICB 2.30 per cent, National Housing Finance 2.40 per cent, Delta Brac Housing Finance 2.30 per cent and LankaBangla Finance 1.90 per cent. The engineering sector also posted 1.45 per cent correction as 22 issues of the sector closed lower, out of 33. Among the engineering issues, Atlas Bangladesh was the top loser, losing 6.70 per cent, followed by Singer BD 6.40 per cent, Bangladesh Building Systems 5.20 per cent, National Polymer 4.80 per cent, BD Autocars 3.80 per cent, Golden Son 3.70 per cent and Appollo Ispat 3.60 per cent. The heavyweight telecommunication sector, which comprised two issues - Grameenphone (GP) and Bangladesh Submarine Cable Company (BSCCL) also faced 1.53 per cent erosion. GP, the largest market-cap listed company in Bangladesh's stock market lost 2.0 per cent while the state-owned BSCCL also lost 2.0 per cent. On the other hand, textile, bank, food and allied, tannery and insurance sectors posted modest gain of 1.16 per cent, 0.35 per cent, 0.34 per cent, 0.04 per cent and 0.03 per cent respectively. The textile sector saw 1.16 per cent gain as 25 issues of the sector closed higher, out of 46. Of the textile issues, Shasha Denims was the highest gainer, posting a 4.0 per cent decline, followed by Tung Hai Knitting & Dyeing 3.0 per cent, Square Textile 3.0 per cent, Mozaffar Hossian Spinning 3.0 per cent while Saiham Textile, Regent Textile, Paramount Textile, HR Textile and Delta Spinners gained 2.0 per cent each. The heavyweight banking sector posted a modest gain of 0.35 per cent despite 21 banks face price correction, out of 30 listed banks. However, the large-cap banks managed to close higher. Of the banks, Mercantile Bank was the top gainer, advancing 6.90 per cent, followed by Islami Bank 5.50 per cent, Brac Bank 3.0 per cent, ONE Bank 2.40 per cent, Dhaka Bank 1.40 per cent and SIBL 1.40 per cent. Source: http://print.thefinancialexpress-bd.com/2017/03/05/166397

BSEC TO GET NEW ICT SYSTEM The securities' regulator is working to start the Capital Market Development Programme-III (CMDP-III) in an effort to diversify the capital market and enhancing the regulatory capacity as well. The CMDP-III will be implemented with the support of Asian Development Bank (ADB) and the introduction of derivatives, Clearing and Settlement Company and ICT system at the Bangladesh Securities and Exchange Commission (BSEC) will come under the coverage of the programme. The regulator will introduce the ICT system as the absence of this system limits the effectiveness of the regulator along with hindering its responsiveness. In order to start the CMDP-III, some conditions including preparing an organogram at the BSEC are required to be fulfilled. Mohammad Saifur Rahman, a BSEC executive director, said the time frame set for fulfilling the conditions may be extended due to some difficulties. "The regulator is working to fulfill the conditions to start the activities of the CMDP-III," Rahman said. He said the programme will diversify the capital market and will increase the capacity of the regulatory body by introducing ICT system. According to the securities' regulator, the CMDP-III will also benefit domestic and international investors, public and private sector borrowers and issuers, and other market participants. The BSEC officials said the project will ensure real automation of the BSEC by increasing efficiency, transparency, and will create automated environment.


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All staffs of the BSEC will be connected with central server through their desktops as well as through cell phone. All internal and external communications shall be done through e-mails. The e-mail addresses of other regulators, stock exchanges, brokers, CDBL, depository participants, listed companies, merchant banks, asset management companies, custodians, trustees, credit rating companies, etc. will be collected and preserved for future use. After introduction of ICT system, the BSEC's central server will have the options of accepting electronic filing, said the officials of the securities regulator. All listed companies and market intermediaries will login into the system using their passwords and will upload periodical reports and accounts that will be accepted and stored in the designated folder and concerned department will see it immediately. According to the securities' regulator, the installation of the new ICT system at BSEC will create synergetic effects to increase its productivity levels. Necessary supports will also be provided under the project to formulate draft rules for introducing derivatives by the securities' regulator. The project will also provide expertise to establish Clearing and Settlement Company by finalising legal framework. Under the project, training will also be provided to IDRA staffs in areas that include supervisory and regulatory mechanism to oversee insurance companies monitoring and evaluation procedures, ICT Management of governance issues and study of actuarial analysis. Following international practices, the securities' regulator will complete preparation of draft rules for Sukuk, Islamic financial products similar to conventional asset-backed securities, by taking support under the development project. Source: http://print.thefinancialexpress-bd.com/2017/03/05/166391

KNITWEAR EXPORTERS URGE KENYA TO CUT DUTY Local knitwear makers urged Saturday the visiting Kenyan business delegation for measures to remove barriers to enhancing bilateral trade between the two countries. The existing 25 per cent duty is one such impediment, they said, calling for reducing the rate. A 10-member Kenyan business delegation comprising private and public sectors headed by Charles Mahinda arrived Friday in the city for a weeklong visit to explore trade and investment opportunity in the country. Leaders of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) made the call in a meeting with the visiting delegation held at the trade body's Dhaka office. BKMEA's vice presidents AH Aslam Sunny and GM Faruque, Export Promotion Bureau vice chairman Mafruha Sultana, director general (Africa Wing) of foreign ministry Shamsul Haque and Rajeev Arora, Steve Odua and Charles Mahinda from the ministry of industry, trade and cooperatives of Kenya, among others, spoke in the meeting. "25 per cent duty is one of the major barriers to exporting to Kenya, though the country is a potential destination among other African countries for Bangladesh," Mr Sunny said. He requested the delegation to raise the issue to their respective policy makers to reduce the duty aiming to enhance the bilateral trade between the two countries. He also sought investments from Kenya for the proposed 'Knit Palli' at Shantinagar Char, Madongonj. Bangladesh earned $10.78 million from exports to Kenya and knitwear exports stood at $0.38 million, while imported $3.10 million in the last fiscal. In 2016, Bangladesh exported knitwear products worth $78.61 million to the African region, according to BKMEA.


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The EPB vice chairman said Kenya and other African countries were big and potential markets for locally-made exportable products and there was scope for increasing bilateral trade between the two countries. "Kenya is well-known as the gateway to foreign trade in the African region," Mr Arora said, adding that the country is preparing itself as one of the representative countries for garment made in the East Asian region. Both countries can benefit from bilateral agreement to ensure smooth supply of raw materials and enhance technical support, he noted. The delegation also held meeting with the leaders of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and discussed the joint-venture opportunity. Source: http://print.thefinancialexpress-bd.com/2017/03/05/166402

MEXICO TURNS DOWN PROPOSAL FOR DUTY-FREE ACCESS OF BD PRODUCTS Mexico has regretted a Bangladesh government's plea for providing duty-free and quota-free (DFQF) access of Bangladeshi products to the Latin American country, officials said. Instead, the Mexican government has expressed its willingness to explore new avenues for the expansion of economic and trade cooperation with Bangladesh, they said. Earlier, the Bangladesh Tariff Commission (BTC) sent a list of products to the Mexican government, seeking their DFQF facility. In reply to the letter, the Mexican government said, "There is no opportunity to provide DFQF facility at this moment." But the country expressed interest to explore different economic possibilities for fostering economic cooperation between Bangladesh and Mexico, according to the letter. The authority concerned has already directed the Bangladesh embassy in Mexico City to take necessary steps for exploring trade and business potentials between the two countries, a high official of the commerce ministry said. The authority concerned has asked the Bangladesh embassy in Mexico to identify more new sectors for expanding the bilateral economic activities between the two countries, he said. There is a huge demand for Bangladeshi products, especially apparels, jute goods, pharmaceuticals and handicrafts in the Latin American country, a BTC official said. On the other hand, sugar and sugar confectionery, organic chemicals, cotton, boilers, machinery and mechanical appliances, parts thereof, vehicles other than railway or tramway rolling-stock, and parts and accessories thereof etc are imported from Mexico, according to Dhaka Chamber of Commerce and Industry (DCCI) data. Presently, the volume of trade between Bangladesh and Mexico is insignificant. Bangladesh earned about US$ 166,153,844.75 against exports in the fiscal year 2015-16. In 2011, a business delegation from Bangladesh visited Mexico aimed at exploring potentials for boosting bilateral trade and investment. In 2013, Bangladesh and Mexico signed an agreement on mutual administrative assistance in customs matters to curb smuggling and misdeclaration and facilitate bilateral trade. Climate change and poverty alleviation have also been identified as potential areas for bilateral cooperation between the two countries. Besides, a memorandum of understanding (MoU) was signed in 2015 to strengthen bilateral relationship between Bangladesh and Mexico. Source: http://print.thefinancialexpress-bd.com/2017/03/05/166407


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HC ORDERS 154 TANNERY OWNERS TO PAY TK 308.5 MILLION FINE The High Court (HC) directed on Thursday 154 Hazaribagh tannery owners to pay Tk 308.5 million fine for not shifting to Savar, report agencies. A two-member HC bench comprising Justice M Ashfaqul Islam and Justice Ashish Ranjan Das passed the order asking the Hazaribagh tannery owners to pay the fine within the next two weeks. On Wednesday, the Industries secretary submitted a list of 154 errant tannery owners who hadn't pay Tk 10,000 fine per day according to the court's previous directive. The court's order came after a supplementary petition filed by rights body, Human Rights and Peace for Bangladesh (HRPB). "The court has given two weeks. If they do not pay the Tk 308.5 million within that time, we will petition to shut down the tanneries or arrest the owners," petitioner's counsel Manjil Morshed told the media. On February 7, the secretary appeared before the court following its directive to explain his failure to collect Tk 10,000 per day from the tannery owners. On that day, the HC directed him to submit the list of the 154 tannery owners. On July 18 last, the Supreme Court ordered each of the 154 tannery owners at Hazaribagh to pay the government Tk 10,000 per day as fine for not relocating their factories to the Tannery Estate in Savar. The court also ordered the government to donate 50 per cent of the fine to the National Liver Foundation of Bangladesh. On January 10 last, the Industries secretary submitted a report before the court mentioning that 150 companies paid Tk 10,000 each in August last while four paid the fine for September while three others for October last. As the secretary failed to perform his duty for collecting the fine, Supreme Court lawyer advocate Manzill Murshid filed a petition seeking a summon order against the secretary to give the explanation. In 2001, the High Court passed an order for relocating the tannery industries from Hazaribagh of the capital. The government extended several times the relocation deadline following requests from the Bangladesh Small and Cottage Industries Corporation (BSCIC), the implementing agency of the tannery estate project. Source: http://print.thefinancialexpress-bd.com/2017/03/03/166271

DSE TURNOVER NEARS ONE-MONTH LOW Stocks closed lower for the fourth consecutive session on Thursday with the turnover hitting nearly a one-month low on the premier bourse of the country, as cautious investors held onto the selling binge. Analysts said the market faced correction further as risk-averse investors maintained their selling spree while some others adopted a 'wait-and-see' approach amid the ongoing dividend declarations by multinational and financial companies. "The cautious investors opted to book quick-gain on bank, power and NBFI issues while some preferred sideline, observing the market, which lessened total market activities," said an analyst at a leading brokerage firm in the city. The market was in the positive territory for a brief period as was on past few trading days. But investors added pressure to sales to book modest profit with the session progressing, sending the market into the negative territory. The DSEX, the prime index of the Dhaka Stock Exchange (DSE), closed at 5,586.74, shedding 10.47 points or 0.18 per cent. The DSEX lost nearly 48 points in the past four consecutive sessions.


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EBL Securities, a stockbroker, said, "The market started with profit booking tendency which continued till the end of the session as the risk-averse investors spurred the selling spree to book quick-gain in sector-specific stocks". Turnover, the most important indicator of the market, also fell further to Tk 8.30 billion, which was 13.72 per cent lower than the previous day's Tk 9.62 billion. It was also the lowest single-day transaction in nearly one month since February 7, when the turnover was recorded at Tk 6.20 billion. Overall activities remained mainly limited to pharmaceuticals, engineering and textile sectors, where they captured 17.7 per cent, 17.6 per cent and 14.4 per cent respectively of the day's total turnover value. IDLC Investments, a merchant bank, said, "The divergence is due to large caps staying flat which much nullified the effect of decline in smaller cap classes". "Investors resorted to sideline, preferring to wait-and-see, rather than act in a declining market," said the IDLC Investments. Sheltech Brokerage said, "Following last trading session, the market extended its losing streak for fourth continuous session." The stockbroker noted that the recent dividend declarations by British American Tobacco Bangladesh Company (BATBC), Linde Bangladesh, Heidelberg Cement and Singer Bangladesh failed to attract investors. BATBC recommended 600 per cent in cash dividend, Linde BD 310 per cent, Heidelberg 300 per cent and Singer 70 per cent for the year ended in December 2016. The large-cap sectors put up mixed performances on the day. The telecommunication sector posted the highest gain of 0.34 per cent, followed by pharmaceuticals with 0.04 per cent and food and allied 0.01 per cent with the engineering sector closing flat. The banking sector witnessed the highest loss of 0.40 per cent, followed by fuel and power with 0.25 per cent and non-bank financial institutions 0.13 per cent. The losers took a strong lead over the gainers, as out of 329 issues traded, 189 closed lower, 96 went higher and 44 remained unchanged on the DSE trading floor. LankaBangla Finance dominated the DSE turnover chart with about 8.62 million shares worth Tk 534 million changing hands, followed by Ratanpur Steel Re-rolling Mills, Barka Power, Beximco and IFAD Autos. Al-Haj Textile was the day's top gainer with 5.51 per cent rise in its share price. Savar Refractories tasted the biggest loss of 8.77 per cent on the day. In the port city the Chittagong Stock Exchange (CSE) also edged lower with its Selective Categories Index - CSCX - losing 33.02 points to settle at 10,492.48 points. Losers beat gainers, as 147 issues closed lower, 81 went higher and 29 remained unchanged on the CSE. The port city bourse saw 14.06 million shares and mutual fund units worth over Tk 427 million traded. Source: http://print.thefinancialexpress-bd.com/2017/03/03/166217

STOCKS BREAK THREE-WEEK WINNING SPELL Stocks faced modest correction last week that ended Thursday, snapping a three-week winning spell, as risk-averse investors booked quick-profit on some large-cap issues. Market insiders said stocks posted meager correction as investors were mostly cautious while some sold shares to bag profit on stocks that saw significant rise in recent upsurge amid ongoing dividend declaration session of financial and multinational companies.


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"A moderate pullback by the market offset the recent rally due to profit taking on power, NBFI, telecom and engineering issues amid latest gas price hike and transport workers strike," said an analyst at a leading brokerage firm. The week featured five trading sessions as usual. Of them, first session posted 9.78 points rise, while last four eroded 48.37 points amid sluggish trading activities. Week-on-week, DSEX, the prime index of the Dhaka Stock Exchange (DSE), fell 38.59 points or 0.69 per cent to settle the week at 5,586.75. "After the positive index movement in the preceding week, the last week saw a correction around 40 points amidst negative reaction to gas price hike and transport strike," said LankaBangla Securities, stockbroker, in its weekly market analysis. The two other indices also saw modest correction. The DS30 index, comprising blue chips, shed 15.16 points or 0.74 per cent to finish at 2,021.04. The DSE Shariah Index lost 5.45 points or 0.42 per cent to close at 1,304.03. The port city bourse, Chittagong Stock Exchange (CSE), also closed lower with its Selective Categories Index, CSCX, shedding 71.68 points or 0.68 per cent to close at 10,492.16. The total turnover for the week fell to Tk 53.58 billion on the premier bourse against Tk 51.73 billion in the week before as last week saw five trading sessions instead of previous week's four. The daily turnover averaged at Tk 10.72 billion, registering a decline of nearly 17 per cent over the previous week's average of Tk 12.93 billion. "Sudden drop in turnover indicates that investors were staying on the sidelines and observing the market movement carefully," said an analyst. Shetceh Brokerage, said, "The market showed extreme volatility amid dividend declaration of several multinational companies, bank and non-bank financial institution and gas price hike". The stockbroker noted that the announcement of latest gas price hike left investors directionless. "Stocks tumbled last week, snapping a 3-week winning spell, as the risk-averse investors booked quick-profit on sector specific stocks," said International Leasing Securities, a stockbroker, in an analysis. The stockbroker noted that the shaky investors opted to book profits that saw substantial price surge on the stocks while some others rebalanced their portfolio ahead of the financial sector stocks' ongoing dividend declarations. The market finished the week lower amid volatile trading and declined turnover as the investors adopted 'wait-and-see' approach on the ongoing market movement, said the stockbroker. The large-cap sectors showed mixed performances throughout the week. Both banks and food and posted 0.35 per cent gain each. Fuel and power issues witnessed the highest correction of 3.76 per cent as Titas Gas plunged 11.82 per cent alone following the news that distribution margin of the company will remain unchanged. It was also the week's second worst loser. It was followed by NBFI 1.91 per cent, telecommunication 1.53 per cent, engineering 1.45 per cent and pharmaceuticals 0.22 per cent. The pharmaceuticals sector led the turnover chart, capturing 19 per cent of the week's total turnover value, followed by engineering 16 per cent and financial institution 15 per cent. "Stocks exposed a moderate pullback which offset the rally that was seen in previous three weeks," said EBL Securities, a stockbroker, in its weekly analysis. Seven listed companies - Mercantile Bank, Reliance Insurance, BATBC, Heidelberg Cement, Singer BD, United Finance and Linde BD-- recommended dividend last week. Out of 332 issues traded, 196 closed lower, 113 ended higher and 23 remained unchanged on the DSE trading floor. The total market capitalisation of the DSE also fell 0.88 per cent last week as it was Tk 3,762 billion on the opening day of the week, while it stood at Tk 3,729 billion on closing day of the week.


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LankaBangla Finance dominated the week's turnover chart on DSE with 36 million shares of Tk 2.27 billion changing hands, followed by Active Fine Chemicals, Beximco, Islami Bank Bangladesh Ltd and Baraka Power. Premier Leasing & Finance was the week's highest gainer, posting a 14.07 per cent gain, while Salvo Chemicals was the worst loser, slumping by 11.86 per cent. Source: http://print.thefinancialexpress-bd.com/2017/03/04/166306

FOUR STRATEGIES TO MEET CAPITAL SHORTFALL IN BANKS A large amount of funds have remained idle in the countrys banking sector, and are not being invested The government has decided to take initiative to meet the capital shortfall of Tk15,000 crore in the state-run banks. Bank and Financial Institutions Division has come up with four different strategies to address the shortfall. The Division has sent a summary of the strategies to Finance Minister AMA Muhith recently. Bank and Financial Institutions Division said the capital shortfall can be met providing capital or issuing shares in the stock market. The capital shortfall can also be addressed through cash payment from budget allocation. However, the government has allocated Tk4,000 crore in the current fiscal years budget which is a scanty amount compared to Tk15,000 crore capital shortfall. Also, the bonus shares can be issued from net profit in the state-owned banks to address the shortfall. This system is more acceptable for all though the state banks have not followed it for a long time, said the Bank Division. The Division said the shortfall from classified loans can be reduced as state banks capital shortfall are created mostly for putting the provision reserves against classified loans. It said the state banks can issue bonds, but the government will repay interest and principal amount at the end of the duration of the bonds. BASIC Bank and Rupali Bank requested the Banks Division to issue bonds in meeting their capital shortfalls. The managements of the two banks said their overseas business operations have been hampered due to their capital shortfall. The banks said they want fund to meet the capital shortfalls. Bank Division sources said the capital shortfall of Sonali Bank is Tk2,606 crore, Agrani Bank Tk200 crore, Rupali Bank Tk1,053 crore, BASIC Bank Tk2,286 crore, BDBL Tk737 crore, Bangladesh Krishi Bank Tk7,485 crore and Rajshahi Krishi Unnayan Bank Tk705 crore. A large amount of funds have remained idle in the countrys banking sector, and are not being invested, said Bank and Financial Institutions Division Secretary Enusur Rahman. He said this is not the appropriate management of the banking sector funds. Banks are not getting any profit from investment due to low interest rate, secretary added. In all of the state-owned banks except Bangladesh Development Bank Limited, the capital shortfall remained widening. Besides, the two state-run banks Sonali and Janata recently showed they had used the government recapitalisation funds in complying with conditions. Source: http://www.dhakatribune.com/business/2017/03/04/four-strategies-meet-capital-shortfall-banks/


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BUDGET OUTLAY DECLINES BY 7.34% Revenue expenditure might be reduced to Tk1,90,744 crore from Tk2,15,744 crore in the revised budget. The total expenditure in current fiscal year is expected to be revised to a 7.34% slash or Tk3,15,500 crore from the original budget outlay of Tk3,40,605 crore. A source in the Finance Division said as the Planning Ministry has not deducted its allocation from Annual Development Programme, revenue expenditure is going to reduce from actual outlay. The government is likely to announce the revised budget outlay for this fiscal year either at the end of this month or in the first week of April following approval from the fiscal coordination council, with Finance Minister AMA Muhith in the chairl. The Finance Division is concerned about the revenue income during the current fiscal year as its shortfall amounted to Tk9,092 crore during last seven months from July to January. The Centre for Policy Dialogue, however, has estimated that the total revenue shortfall will be Tk40,000 crore from the actual outlay of Tk2,03,152 crore. The subsidy allocation of this fiscal year is likely to reduce by Tk2,903 crore or 10.86% substantially, thanks to fall in oil price over the last one year. According to the Finance Division, the latest estimation about the subsidy allocation is reduced to Tk23,826 crore this fiscal year from the actual outlay of Tk26,729 crore. As per the revised budget, the power subsidy will be Tk5,500 crore from the budget allocation of Tk6,000 crore. Bangladesh Power Development Board purchases electricity from rental power plants at prices ranging between Tk13 and Tk23 per unit and sells at an average of Tk6.5 per unit. The government has given Tk1,000 crore gas subsidy in the middle of this fiscal year which will increase to Tk2500 crore at the end of fiscal year. The allocation of food subsidy is going to increase to Tk3,717 crore from the actual allocation of Tk2,820 crore due to the government initiative to provide rice for rural people at a lower price of Tk10 per kg. Jute and cash incentive remains the same as Tk4,500 crore in the actual budget outlay, according to the latest estimate. Because of oil price fall in the international market, the Agricultural Ministrys fertiliser subsidy is going to reduce to Tk6,000 crore in the revised budget from the actual outlay of Tk9,000crore. The subsidy amount will be Tk1,609 crore for payment of different pockets of subsidies for including rural electricity board, BIWTC and Trading Corporation of Bangladesh (TCB), according to the latest estimation of subsidies. Three days ago, the government endorsed a revised Annual Development Project (ADP) fund of Tk1,10,700 crore in a top meeting held at the Planning Commission. Sources in Finance Division said revenue expenditure might be reduced to Tk1,90,744 crore from Tk2,15,744 crore in the revised budget. The decline in such spending is because of subsidies in fertilizer, power and energy. Finance Adviser of the former caretaker government AB Mirza Azizul Islam said the total budget outlay will decline more as the ministries and divisions are unable to increase the capacity of spending. Source: http://www.dhakatribune.com/business/2017/03/02/budget-outlay-declines-7-34/

OIL PRICES RISE ON WEAKER DOLLAR Oil prices rose on Friday in international market as weaker U.S. dollar encouraged buying.


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The West Texas Intermediate for April Delivery added 0.72 dollars to settle at 53.33 dollars a barrel on the New York Mercantile Exchange, while Brent crude for May delivery increased 0.82 dollars to close at 55.90 dollars a barrel on the London ICE Futures Exchange, reports Xinhua. Source: http://www.daily-sun.com/post/209906/Oil-prices-rise-on-weaker-dollar-

STATE BANKS' RESCHEDULED LOANS TURN BAD AGAIN

State banks' large loans that were rescheduled nearly two years ago to support the borrowers have turned bad again. Bangladesh Bank data shows default loans increased by Tk 10,801 crore last year to take the total figure to Tk 62,172 crore as of December 31, 2016. Of the new default loans, eight state banks alone accounted for 74 percent or Tk 7,997 crore. The banks are -- Sonali, Janata, Agrani, Rupali, BASIC, Bangladesh Development Bank, Krishi Bank, and Rajshahi Krishi Unnayan Bank. A big portion of the loans that were regularised under the large loan rescheduling scheme has turned defaulted again, said Zaid Bakht, chairman of state-owned Agrani Bank, one of the largest banks in the country in terms of the number of branches. This is a major reason behind the rise in bad loans, he said. Of the total default loan figure of Tk 62,172 crore, the eight state banks accounted for 59 percent or Tk 36,709 crore, BB data shows. Salehuddin Ahmed, former central bank governor, said the wholesale rescheduling of loans in the pretext of political instability was not right; it should have been given according to merit. A borrower may get his loans rescheduled once, twice or thrice, but he cannot take the benefit again and again. In 2015, banks rescheduled Tk 26,308 crore in bad loans, which was 50.1 percent higher than that in 2014, according to central bank statistics. Under pressure from influential businessmen last year, the central bank also offered a special restructuring opportunity for loans upwards of Tk 500 crore. Under the facility, loans worth Tk 16,410 crore were restructured. On average, banks rescheduled Tk 10,909 crore a year between 2010 and 2014, according to a study by Bangladesh Institute of Bank Management (BIBM). BIBM prepared the report -- Implication of Loan Rescheduling and Write-off on the Performance of Banks -- last year after analysing data from 2010 to 2014 and recording the statements of bankers.

http://www.daily-sun.com/post/209906/Oil-prices-rise-on-weaker-dollar-


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Bakht said, Cases should now be filed against those who took large loans as they cannot be spared anymore. The loans cannot be recovered without putting pressure by filing cases against them, he added. However, the medium scale borrowers may be given some time by rescheduling their loans so that they can repay, Bakht said. Ahmed said, in such cases in other countries, the defaulting borrowers are jailed, with a provision to seize their property. In Bangladesh, nothing such happens, he added. The default loans are the highest in the public sector banks, said the former governor. No real action is visible against those who are responsible for the default loans, he added. The default loans in the state banks are increasing due to a lack of sincerity and seriousness of the government, said Ahmed. If we look at different indexes of Sonali Bank, there is not much scope for optimism, Finance Minister AMA Muhith had said at the bank's annual conference on February 5. Last year, Sonali Bank's default loans rose 26 percent compared to the previous year. More than a third of the bank's total loans are non-performing. Sonali has a large scale capital deficit. Its default loans and loss-making branches are more than one-fourth of the total. These indexes do not instil much hope. However, we have to be hopeful, Muhith added. At the same function, State Minister for Finance and Planning MA Mannan said, The country's banking sector saw many developments, but the public sector banks do not seem to enjoy too many positive opinions. In 2016, bad loans in the private banks rose by Tk 2,297 crore to stand at Tk 23,057 crore. Officials of private banks said although the overall situation is good, the condition of some banks is grave, and the central bank has deployed observers there. A central bank official said the banks where ownership is bad have experienced the worst situations. Many of these owners are influential; hence, the central bank faces difficulties taking action against those banks, the official added. Many borrowers, especially the influential borrowers and wilful defaulters, place unethical requests and create pressure on banks to regularise their problem loans by rescheduling, without proper justification to do so, said the BIBM study. The government, judicial authority, central bank, law enforcement agencies, political parties, trade associations and the media should work to restrain bad borrowers from unethical practices, it added. The rescheduling of delinquent loans is actually a deferral process of accumulating default loans. The move puts immense pressure on the bank's capacity to recover the loans, which are not only 'toxic assets' but will go on to become irrecoverable in the long run. The study shows that the recovery of rescheduled loans is small and realisation of funds from large borrowers even smaller. On December 31, 2016, default loan as a percentage of total outstanding loans was 9.23 percent, which was 8.79 percent one year back. However, compared to September 30, 2016, the default loan declined slightly in December. On September 30 last year, it was 10.34 percent. Source: http://www.thedailystar.net/business/state-banks-rescheduled-loans-turn-bad-again-1371094

ISLAMI BANK BREAKS RULES IN APPROVING LOANS, BB FINDS The newly-formed board of Islami Bank Bangladesh has approved loans to clients without following proper rules, according to the central bank. In some instances, the board has not paid heed to objections raised by the Bangladesh Bank observer to the bank.

http://www.thedailystar.net/business/state-banks-rescheduled-loans-turn-bad-again-1371094http://www.thedailystar.net/business/state-banks-rescheduled-loans-turn-bad-again-1371094


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BB will enquire about the wrongdoings, if any, said sources at the central bank. Most of the loans under question were approved from the bank's Chittagong region, according to BB findings. The board approved loans worth Tk 16.75 crore to two clients -- JN Flour Mills and its associate organisation. The approval came at an executive meeting of the bank on February 16. The loan was disbursed from the bank's Bahaddarhat branch in Chittagong but the factory of the client is located at Laksam in Comilla. Moreover, the loan was acquired from the Khatunganj branch of Al-Arafah Islami Bank. BB will investigate at what condition the client has agreed to transfer the loan from Khatunganj to Bahaddarhat and whether the acquisition was lawful and the money would not be diverted to unspecified sectors, according to the BB sources. The BB observer found the board has granted grace periods to clients without following due process. In some cases, the grace period was extended even without rescheduling of loans. In another incident, the Islami Bank board has approved loan for HBC Bricks, a client of its Companiganj branch in Comilla, without knowing the creditworthiness of the borrower. The client has no environment clearance certificate too. The board approved the loan despite objection from the BB observer. The Khatunganj branch of Islami Bank also acquired all non-funded liabilities of Nur Brothers Trading from the branch of Exim Bank. The board also gave nod to a loan proposal from Islami Bank's Khatunganj branch to lend Tk 132.60 crore to Infinit CR Strips Industries. The company is a new client for the branch and the loan was given to build a steel sheet manufacturing plant. The loan proposal did not include information about the client's banking activities. According to BB, the board approved such a large amount of loan quickly to a completely new client without carrying out any field visit to the project site. But Islami Bank denies any wrongdoing. We don't favour a particular client while approving loans, said Abdul Matin, chairman of the executive committee of the bank. If clients fulfill all requirements they get loans, he said. Moreover, there is an observer from Bangladesh Bank who attends all of the meetings. We try to follow his guideline or take his objection into account before approving any loan proposal, he said. The new board at the country's biggest Shariah-based bank took the charge in early January following a major reshuffle in key positions, including chairman and managing director. Source: http://www.thedailystar.net/business/islami-bank-breaks-rules-approving-loans-bb-finds-1371049

INVESTORS SEE SNAP'S IPO AS 'TOO BIG TO FAIL' Institutional investors anxious not to be left out of this year's marquee initial public offering helped Snap Inc pull off the biggest US-listed technology share sale this week since Chinese e-commerce juggernaut Alibaba Group Holding Inc smashed records in 2014. Keen to boost returns and with a dearth of new stocks to buy, the IPO of a buzzy social media group was a "must-have" for money managers despite concerns about the company's strategy, slowing user growth and lack of voting rights for new investors, sources familiar with the offer said. "Taking a piece of the company is almost a foregone conclusion," said Evan Pondel, president of investor relations firm PondelWilkinson Inc. Investors' ardor for Snap shares - which rose almost 50 percent in its market debut on Thursday, giving it a market value of nearly $30 billion - bodes well for future tech IPOs.

http://www.thedailystar.net/business/islami-bank-breaks-rules-approving-loans-bb-finds-1371049http://www.thedailystar.net/business/islami-bank-breaks-rules-approving-loans-bb-finds-1371049


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Although blockbuster names such as Uber Technologies Inc [UBER.UL] and Airbnb Inc are not expected to go public this year, there is a lineup of smaller technology companies preparing to list in the coming months that could benefit from residual investor enthusiasm, technology investors said. To ensure a successful market launch, Snap's bankers deployed a common tactic on big tech IPOs: they limited supply. Snap offered only 15 percent of the company to investors, including retail investors and short-term hedge funds, sources familiar with the IPO strategy told Reuters, speaking on condition of anonymity as the process is private. "All this concern about the number of users slowing down - a tech IPO of this sort has nothing to do with the business, nothing," said Philippe Collard, founding partner at Yabusame Partners, which advises technology startups. "It has everything to do with a financial transaction where you create artificial demand. Hedge funds are famous for buying into an IPO only to sell shortly after, but institutional investors are not above quickly "flipping" a stock if they see an opportunity. However, a quarter of the new offer was subject to a one-year lockup, an unusual stipulation, limiting the amount of churn. Large actively managed mutual funds are among the most sought-after IPO investors because of their size and their tendency to hold stocks for longer. They develop strong ties to IPO underwriters by virtue of being prolific IPO investors and providing the banks' brokerage business with trading fees. These funds are also under pressure to boost performance as investors redirect tens of billions of dollars each month into index-tracking funds, which cost less and over time have performed better. Fidelity Investments, BlackRock, T. Rowe Price and Wellington Management began piling into pre-IPO tech companies in 2014, and both Fidelity and T. Rowe Price invested in Snap during a private funding round last year, positioning them to benefit from Thursday's pop. Fidelity and T. Rowe Price declined to comment on whether they had bought into the IPO this week. There was significant pent-up demand for a new internet stock. Snap, the parent group of popular disappearing-messaging app Snapchat, went public after a long dry patch in the technology IPO market, with 2016 the slowest year for such launches since 2008. In addition to the absence of new shares, acquisitions and buy-backs have zapped investors in public technology companies of places to park their cash. Technology mergers and acquisitions and buybacks outpaced technology IPOs last year by a ratio of 38 to 1, according to Thomson Reuters data. In its IPO roadshow in New York, San Francisco, London and elsewhere, Snap Chief Executive Evan Spiegel brushed aside concerns of slowing user growth and stressed Snap's potential to change "the way people live and communicate," according to sources who attended. Even though many funds felt compelled to invest in Snap, they still had questions for the company. But they asked the toughest ones - about the company's corporate governance and slowing user growth - behind closed doors, in small meetings between management and the underwriters' preferred clients, sources close to the situation said, asking not to be named because the process is confidential. Such a dynamic is typical of such a high-profile IPO, when a full order book is all but guaranteed. Those investors invited only to the roadshow lunches and keen for a decent allocation are more interested in impressing the IPO bankers who take notes on who attends with how closely they have read up on the company, and do not want to jeopardize their chances by rattling the company management, said investor relations experts, bankers and lawyers. "It's like going to do the college visit. When it's time to decide who to admit, you look to see who put in the effort," said Lise Buyer, a principal with the IPO advisory firm Class V Group.


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On the roadshow, Snap largely deferred questions about its user growth in public sessions. In New York, not a single question was asked about the company's first-of-its kind share structure that offers IPO investors no voting rights. "It's an exercise in diplomacy," Pondel said. "You can't be too chest-pounding, because that's not someone they may want to have a piece of the company." Source: http://www.thedailystar.net/business/investors-see-snaps-ipo-too-big-fail-1371103

BANGLALINK'S REVENUE GOES UP 3.4PC

Banglalink's gross revenue rose 3.4 percent year-on-year to Tk 4,870 crore in 2016, driven mainly by growth in data revenue, its parent company Vimpe-lCom said in its annual report last week. However, the Amsterdam-based company mentioned nothing on Banglalink's profitability in its report. Banglalink earlier had said it would become profitable in 2016. Erik Aas, chief executive of Banglalink, expressed satisfaction over the financial results. Banglalink fared well in earning revenue in 2016 and we would continue bringing value to all our stakeholders, as we transform our company from a traditional telco into a world-class tech company, Aas told The Daily Star in a response to a query. On profitability, he said they are expecting better results in 2017. Banglalink, now the country's third largest operator after the merger of Robi and Airtel last year, saw a decline in the number of active SIMs, but recorded healthy growth in data use. As of December, Banglalink's customer base stood at 3.04 crore, down 5.9 percent year-on-year after the completion of the biometric verification process; the operator lost 38 lakh connections at that time, according to the report. However, 1.49 crore of the operator's connections are used for data services, which is an increase of 6.9 percent from the previous year. Banglalink has also continued to expand its 3G rollout, which now effectively covers 59 percent of the country's population. At the end of 2015, its 3G coverage was only 33 percent. The operator's capital expenditure was Tk 1,070 crore last year, growing around 2 percent year-on-year, reads the report.

http://www.thedailystar.net/business/investors-see-snaps-ipo-too-big-fail-1371103


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With network expansion and rising smartphone penetration, data usage also rose 192 percent year-on-year to 391MB a month per user at the end of December. This led data revenue to grow 51.2 percent year-on-year to Tk 490 crore. Data is the new emerging revenue source and we are happy to see the positive trend, said Aas. Source: http://www.thedailystar.net/business/banglalinks-revenue-goes-34pc-1371082

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