Alo (September 09, 2011)
বাণিজ্য প্রতিযোগিতাসক্ষমতায় এক ধাপ পিছিয়েছে বাংলাদেশ। গতবারের চেয়ে ‘স্কোর’ বাড়লেও অন্য দেশগুলোর বাণিজ্যসক্ষমতা তুলনামূলকভাবে বেশি বাড়ায় বাংলাদেশ পিছিয়ে গেছে। এবার ১৪২টি দেশের মধ্যে বাংলাদেশের অবস্থান ১০৮ নম্বরে, আর গতবার এ অবস্থান ছিল ১০৭ নম্বরে।
ওয়ার্ল্ড ইকোনমিক ফোরামের (ডব্লিউইএফ) ২০১১-১২ সালের বৈশ্বিক প্রতিযোগিতাসক্ষমতা প্রতিবেদন (জিসিআর) ও বাংলাদেশ ব্যবসায় পরিবেশ সমীক্ষা ২০১০-এ বাংলাদেশ সম্পর্কে এসব তথ্য উঠে এসেছে। গতকাল বৃহস্পতিবার ডব্লিউইএফের পক্ষে বেসরকারি গবেষণা সংস্থা সেন্টার ফর পলিসি ডায়ালগ (সিপিডি) এ প্রতিবেদনটি প্রকাশ করে।
১০ কোটি টাকার চেয়ে বেশি সম্পদমূল্যের ৭০ জন ব্যবসায়ীর মতামত নিয়ে সিপিডি প্রতিবেদনটি তৈরি করেছে। ২০১০ সালের জানুয়ারি থেকে ডিসেম্বর পর্যন্ত প্রতিবেদনের তথ্য-উপাত্তের সময়কাল ধরা হয়েছে।
সমীক্ষায় মতামত দেওয়া ব্যবসায়ীরা জানিয়েছেন, বাংলাদেশের ব্যবসায় পরিবেশে সবচেয়ে বড় সমস্যা হলো অবকাঠামো দুর্বলতা। বিশেষ করে, বিদ্যুৎ-সংকটই ব্যবসা-বাণিজ্যে সবচেয়ে বড় প্রতিবন্ধকতা হিসেবে মনে করছেন তাঁরা। ব্যবসায় সুবিধা নেওয়ার ক্ষেত্রে সুশাসনের অভাবকে আরেকটি প্রতিবন্ধকতা হিসেবে দেখছেন ব্যবসায়ীরা।
ধানমন্ডির সিপিডি কার্যালয়ে আয়োজিত সংবাদ সম্মেলনে প্রতিবেদন দুটির মূল অংশ উপস্থাপন করেন সংস্থার জ্যেষ্ঠ গবেষক খন্দকার গোলাম মোয়াজ্জেম। এ ছাড়া বক্তব্য দেন সিপিডির নির্বাহী পরিচালক মোস্তাফিজুর রহমান। উপস্থিত ছিলেন সিপিডির বিশেষ ফেলো দেবপ্রিয় ভট্টাচার্য, অতিরিক্ত পরিচালক ফাহমিদা খাতুন প্রমুখ।
সিপিডির নির্বাহী পরিচালক মোস্তাফিজুর রহমান বলেন, ‘২০১০ সালে গণতান্ত্রিক সরকার ক্ষমতায় ছিল। এ সময় বিভিন্ন সূচকে বাংলাদেশের স্কোর বেড়েছে, কিন্তু অন্যরা আরও এগিয়েছে। তাই প্রত্যাশার সঙ্গে বাস্তবতার পার্থক্য তৈরি হয়েছে। আমরা আশা করি, গণতান্ত্রিক শাসনব্যবস্থায় গণতান্ত্রিক প্রতিষ্ঠানগুলো শক্তিশালী হবে। কিন্তু মতামত জরিপে তা আসছে না।’
বৈশ্বিক প্রতিযোগিতাসক্ষমতা প্রতিবেদনে বলা হয়েছে, বাংলাদেশের ব্যবসা-বাণিজ্যে প্রধান প্রধান প্রতিবন্ধক সূচকের মধ্যে শীর্ষস্থানে রয়েছে অবকাঠামোগত দুর্বলতা। এ ছাড়া দুর্নীতি সূচকটি আগের বছর তিন নম্বরে থাকলেও এবার তা দুই নম্বরে ওঠে এসেছে। এরপরই রয়েছে অদক্ষ জনপ্রশাসন, রাজনৈতিক অস্থিতিশীলতা ও ব্যবসায় অর্থায়ন সূচক।
সরকারি প্রতিষ্ঠানগুলো সম্পর্কে ব্যবসায়ীদের দৃষ্টিভঙ্গির কোনো পরিবর্তন হয়নি বলে প্রতিবেদনে বলা হয়েছে। এতে বলা হয়েছে, কেন্দ্রীভূত নীতিনির্ধারণী ব্যবস্থা, রাজনীতিবিদদের আর্থিক অসততা এবং প্রতিষ্ঠান ও ব্যক্তিবিশেষ পক্ষপাতিত্ব, সরকারি অর্থের অপচয়, উচ্চ করহার ও শ্লথ কাস্টমস প্রক্রিয়াকরণ সম্পর্কে মতামত দেওয়া ব্যবসায়ীদের দৃষ্টিভঙ্গির কোনো পরিবর্তন আনেনি। অর্থাৎ বিষয়গুলো সম্পর্কে তাঁদের দৃষ্টিভঙ্গি আগের মতোই নেতিবাচক রয়েছে।
প্রতিবেদনে আরও বলা হয়েছে, ২০১০ সালে উদ্যোক্তারা ঋণপ্রাপ্তির ক্ষেত্রে স্বস্তিতে ছিলেন না। ব্যবসায়ীরা বলেছেন, ঋণপ্রাপ্তি আগের চেয়ে আরও কঠিন হয়েছে। এ ছাড়া আমদানি-রপ্তানিসহ বিভিন্ন খাতে কর প্রদানের ক্ষেত্রে অনৈতিক লেনদেন বেড়েছে। দুর্নীতি দমনসংক্রান্ত কার্যক্রম আরও শক্তিশালী করার তাগিদ দেওয়া হয়েছে।
এ ছাড়া প্রতিবেদনে বাংলাদেশের ব্যবসা-বাণিজ্যে বহির্বিশ্বসংক্রান্ত পাঁচটি সমস্যা চিহ্নিত করা হয়েছে। এগুলো হলো: বৈশ্বিক অর্থনীতির অনিশ্চয়তা, জ্বালানিমূল্যের অস্থিরতা, বাণিজ্য বাধা, বৈদেশিক মুদ্রা বিনিময়মূল্যে ওঠানামা ও প্রাকৃতিক সম্পদের অপর্যাপ্ততা।
প্রতিবেদনে আরও বলা হয়েছে, ভারত ছাড়া বাংলাদেশের পার্শ্ববর্তী ও প্রতিযোগী দেশগুলো বাংলাদেশের চেয়ে অনেক এগিয়ে গেছে। চীন ২৭ থেকে ২৬, মালয়েশিয়া ২৬ থেকে ২১, শ্রীলঙ্কা ৬২ থেকে ৫২, নেপাল ১৩০ থেকে ১২৫, পাকিস্তান ১২৩ থেকে ১১৮ ও কম্বোডিয়া ১০৯ থেকে ৯৭ নম্বরে উন্নীত হয়েছে। তবে ভারতের অবস্থান ৫১ থেকে পিছিয়ে ৫৬ নম্বরে নেমেছে।
Friday, September 9
Remittance supports Bangladesh economy
Express (September 09, 2011)
Bangladesh is a huge labour surplus country in the world due to overpopulation. Hence it belongs to the supply side of the global labour market for unskilled labour. On an average 2,50,000 people annually (1995-2003) migrated to take up overseas employment. The flow of migrant workers is associated with the growing flow of remittance to a country. It was estimated that 60 per cent of global remittances were sent to developing countries in the year 2000. Lower middle-income countries apparently receive the largest amounts, but remittances may constitute a much higher share of the total international capital flow to low-income countries.
To further emphasise the development dimension of migrant transfers, remittances seem to be more stable than private capital flows and to be less volatile to change in economic cycles. It may, therefore, be concluded that monetary remittances play most important role in the accounts of many developing countries and are crucial to the survival of poor individuals and communities around the world. The emphasis of development policy is now firmly on poverty reduction and the achievement of the UN Millennium Development Goals, which in addition to the eradication of extreme poverty, also envisage improvement of health and education, gender equality and empowerment of women, the reduction of infant and child mortality, access to safe drinking water and sanitation, and the improvement of the lives of both rural and urban poor people.
From 1976 to 2008, a total of about 3.92 million people migrated temporarily from Bangladesh. The systematic recording of information on migration of Bangladeshi workers began in the mid-seventies. The Bureau of Manpower, Employment and Training (BMET) of the Labour Ministry maintains the record. Now BMET has classified temporary migrant population into four categories. These are professional, skilled, semi-skilled, and unskilled. Doctors, engineers, nurses and teachers are professionals; manufacturing or garments workers are considered as skilled workers while tailor,
Flow of remittance in Bangladesh during 1975 to 2011
Source: BAIRA- 2009 & BER- 2011
mason etc as semi-skilled workers. Housemaid, cleaner, labourers are classified as unskilled workers. The skill composition of those who migrated over this period, in general, indicates a consistent level of comparatively high proportion of semi and unskilled migrant workers too. The statistics said that in 1990, 40 per cent of the migrant workers were in professional and skilled category and the remaining 60 per cent were in semi-skilled and unskilled category. In 2004, 44 per cent workers were in professional and skilled category, and the rest of the 56 per cent were in semi-skilled and unskilled category. The manpower export increased gradually after 1990, as well as the number of skilled workers also increased; but it was not significant compared to the number of semi-skilled and unskilled workers.
During the period between 1976 to 2009, Bangladesh received about US$ 67.68 billion as remittance. However, the amount of remittance would have been much higher if the country could send more professional and skilled workers.
The remittance received by Bangladesh in 1976 was only US$ 23.71 million. Then it continued to increase until 1983. The remittance showed a downward trend during the next couple of years. However, the remittance gained momentum in 1992 and showed a persistently increasing trend until 2010 when the country received US $10987.40 million as remittance. A relatively large share of Bangladesh's remittance came from the Middle-Eastern countries. If one looks into the sources of remittance at least for the last ten years, obviously the countries of the Middle-East, Malaysia and Singapore constitute major sources of the total remittance for Bangladesh.
For the year 2009, it is observed that the countries in the Middle-East constituted a large part (59.45 per cent) of the total remittance. Of the amount, the highest (26.67 per cent) came from Saudi Arabia, 16.37 per cent and 9.05 per cent came from the United Arab Emirates and Kuwait respectively. Besides, Bangladeshi migrants in the USA contributed 14.67 per cent, the UK 7.36 per cent, Malaysia 2.63 per cent and Singapore 1.54 per cent. The remaining 14 per cent came from other countries.
Since 1976, remittance has been playing a significant role in the economic development of Bangladesh. The role of remittance has in fact been quite obvious in the last decade. In 1999, remittance was 1.17 times higher than the foreign aid received and 9.12 times higher than the foreign direct investment (FDI). In 2009, the 'times' went up to around 5.90 for overseas assistance and 11.39 for FDI. This means that yearly remittance has always been exceeding foreign aid and FDI in Bangladesh
Statistics shows that increasing flow of remittance has been reducing Bangladesh's external aid dependency. It particularly attracted the development partners and had a major influence over the policymaking process of the country. The growing formal inflow of remittance, equivalent alone to more than 50 per cent of total government revenue, has also been reducing dependency on FDI in Bangladesh.
In 1999, remittance as part of GDP and export was 3.74 per cent and 32.04 per cent respectively. In 2009, formal remittance as part of GDP and export stood at 10 per cent and 68.37 per cent respectively. This means that the amount of remittance in terms of GDP and export earnings increased over the period 1999 to 2009. Such growing contribution of remittance inflow to GDP and export has not only assisted to meet the increasing trade deficit but also maintain a stable foreign currency reserve.
Foreign currency aspect of remittance is especially important as Bangladesh runs a trade deficit and is currently suffering from a foreign exchange crisis. Growth in remittance is one of the key factors in maintaining foreign exchange reserves. The steady growth of inward remittance and falling import payments has contributed to the higher growth of reserves. The growing contribution of inward remittance to foreign exchange reserve has been helping Bangladesh to make up the deficit between total export and import and to maintain the balance of payments, and thereby also economic stability.
The economic development of Bangladesh is very much dependent on increasing investment opportunity and reducing poverty. There are many areas where remittance has been used as productive investment including human capital development. Nevertheless, remittance has helped Bangladesh to make investments for manufacturing expansion, modernise its agriculture and industries by importing high-tech machineries for export-oriented production. Now it is a timely demand that policymakers take care of the temporary migrants, look after their problems and support them for their betterment. Therefore, more labour will be interested to go abroad and Bangladesh will be able to earn more foreign exchange (FC). We must have to keep in mind that the remittance is an important source of investment without the traditional cost of capital, and it can perform as a key driver for economic development in Bangladesh.
The writers B M Sajjad Hossain
Bangladesh is a huge labour surplus country in the world due to overpopulation. Hence it belongs to the supply side of the global labour market for unskilled labour. On an average 2,50,000 people annually (1995-2003) migrated to take up overseas employment. The flow of migrant workers is associated with the growing flow of remittance to a country. It was estimated that 60 per cent of global remittances were sent to developing countries in the year 2000. Lower middle-income countries apparently receive the largest amounts, but remittances may constitute a much higher share of the total international capital flow to low-income countries.
To further emphasise the development dimension of migrant transfers, remittances seem to be more stable than private capital flows and to be less volatile to change in economic cycles. It may, therefore, be concluded that monetary remittances play most important role in the accounts of many developing countries and are crucial to the survival of poor individuals and communities around the world. The emphasis of development policy is now firmly on poverty reduction and the achievement of the UN Millennium Development Goals, which in addition to the eradication of extreme poverty, also envisage improvement of health and education, gender equality and empowerment of women, the reduction of infant and child mortality, access to safe drinking water and sanitation, and the improvement of the lives of both rural and urban poor people.
From 1976 to 2008, a total of about 3.92 million people migrated temporarily from Bangladesh. The systematic recording of information on migration of Bangladeshi workers began in the mid-seventies. The Bureau of Manpower, Employment and Training (BMET) of the Labour Ministry maintains the record. Now BMET has classified temporary migrant population into four categories. These are professional, skilled, semi-skilled, and unskilled. Doctors, engineers, nurses and teachers are professionals; manufacturing or garments workers are considered as skilled workers while tailor,
Flow of remittance in Bangladesh during 1975 to 2011
| Year | Remittance earned (in million US$) |
| 1975-76 | 23.71 |
| 1979-80 | 301.33 |
| 1984-85 | 500.00 |
| 1991-90 | 781.54 |
| 1994-95 | 1201.52 |
| 1999-00 | 1954.95 |
| 2004-05 | 4249.87 |
| 2008-09 | 10720.20 |
| 2009-10 | 10987.40 |
| 2010-11 (up to April) | 9587.15 |
mason etc as semi-skilled workers. Housemaid, cleaner, labourers are classified as unskilled workers. The skill composition of those who migrated over this period, in general, indicates a consistent level of comparatively high proportion of semi and unskilled migrant workers too. The statistics said that in 1990, 40 per cent of the migrant workers were in professional and skilled category and the remaining 60 per cent were in semi-skilled and unskilled category. In 2004, 44 per cent workers were in professional and skilled category, and the rest of the 56 per cent were in semi-skilled and unskilled category. The manpower export increased gradually after 1990, as well as the number of skilled workers also increased; but it was not significant compared to the number of semi-skilled and unskilled workers.
During the period between 1976 to 2009, Bangladesh received about US$ 67.68 billion as remittance. However, the amount of remittance would have been much higher if the country could send more professional and skilled workers.
The remittance received by Bangladesh in 1976 was only US$ 23.71 million. Then it continued to increase until 1983. The remittance showed a downward trend during the next couple of years. However, the remittance gained momentum in 1992 and showed a persistently increasing trend until 2010 when the country received US $10987.40 million as remittance. A relatively large share of Bangladesh's remittance came from the Middle-Eastern countries. If one looks into the sources of remittance at least for the last ten years, obviously the countries of the Middle-East, Malaysia and Singapore constitute major sources of the total remittance for Bangladesh.
For the year 2009, it is observed that the countries in the Middle-East constituted a large part (59.45 per cent) of the total remittance. Of the amount, the highest (26.67 per cent) came from Saudi Arabia, 16.37 per cent and 9.05 per cent came from the United Arab Emirates and Kuwait respectively. Besides, Bangladeshi migrants in the USA contributed 14.67 per cent, the UK 7.36 per cent, Malaysia 2.63 per cent and Singapore 1.54 per cent. The remaining 14 per cent came from other countries.
Since 1976, remittance has been playing a significant role in the economic development of Bangladesh. The role of remittance has in fact been quite obvious in the last decade. In 1999, remittance was 1.17 times higher than the foreign aid received and 9.12 times higher than the foreign direct investment (FDI). In 2009, the 'times' went up to around 5.90 for overseas assistance and 11.39 for FDI. This means that yearly remittance has always been exceeding foreign aid and FDI in Bangladesh
Statistics shows that increasing flow of remittance has been reducing Bangladesh's external aid dependency. It particularly attracted the development partners and had a major influence over the policymaking process of the country. The growing formal inflow of remittance, equivalent alone to more than 50 per cent of total government revenue, has also been reducing dependency on FDI in Bangladesh.
In 1999, remittance as part of GDP and export was 3.74 per cent and 32.04 per cent respectively. In 2009, formal remittance as part of GDP and export stood at 10 per cent and 68.37 per cent respectively. This means that the amount of remittance in terms of GDP and export earnings increased over the period 1999 to 2009. Such growing contribution of remittance inflow to GDP and export has not only assisted to meet the increasing trade deficit but also maintain a stable foreign currency reserve.
Foreign currency aspect of remittance is especially important as Bangladesh runs a trade deficit and is currently suffering from a foreign exchange crisis. Growth in remittance is one of the key factors in maintaining foreign exchange reserves. The steady growth of inward remittance and falling import payments has contributed to the higher growth of reserves. The growing contribution of inward remittance to foreign exchange reserve has been helping Bangladesh to make up the deficit between total export and import and to maintain the balance of payments, and thereby also economic stability.
The economic development of Bangladesh is very much dependent on increasing investment opportunity and reducing poverty. There are many areas where remittance has been used as productive investment including human capital development. Nevertheless, remittance has helped Bangladesh to make investments for manufacturing expansion, modernise its agriculture and industries by importing high-tech machineries for export-oriented production. Now it is a timely demand that policymakers take care of the temporary migrants, look after their problems and support them for their betterment. Therefore, more labour will be interested to go abroad and Bangladesh will be able to earn more foreign exchange (FC). We must have to keep in mind that the remittance is an important source of investment without the traditional cost of capital, and it can perform as a key driver for economic development in Bangladesh.
The writers B M Sajjad Hossain
One-stop tax service centre to be opened in city
Express (September 09, 2011)
The National Board of Revenue (NBR) is going to introduce tax information and service centre in the city to offer one-stop service to the income taxpayers of the capital.
The NBR will launch the service centre tomorrow (Saturday) at the Segun Bagicha (12-storey building) office on pilot basis.
The centre will be inaugurated by NBR Chairman Dr Nasiruddin Ahmed, income tax member Syed Aminul Karim and tax commissioner Quader Sarker.
"The taxpayers will get TIN certificates and free advisory services in the service centre," Aminul Karim told the FE Thursday.
The main objective of the centre is to remove the fear factor among the taxpayers and encourage voluntary tax payment by ensuring better service, he said.
There will be facilities for online submission of income tax returns, issuance of the Taxpayers Identification Number (TIN) etc in the service centre, he added.
"Initially the service will be limited for taxpayers of some selective zones to avoid rush. Gradually, the service will be available for all the taxpayers," he said.
The service centre is established with the financial assistance of the Department for International Development (DFID) of the UK under the Tax Administration, Capacities and Taxpayers Services (TACTS) project, he added.
Officials said the NBR will outsource the work to ensure smooth services.
Usually, people feel uncomfortable to visit tax offices for obtaining services or submitting tax returns for fear of harassment. The taxpayers will be able to get services from the centre instead of going to tax offices.
The centre will provide all necessary support to the taxpayers and give one-stop service.
The National Board of Revenue (NBR) is going to introduce tax information and service centre in the city to offer one-stop service to the income taxpayers of the capital.
The NBR will launch the service centre tomorrow (Saturday) at the Segun Bagicha (12-storey building) office on pilot basis.
The centre will be inaugurated by NBR Chairman Dr Nasiruddin Ahmed, income tax member Syed Aminul Karim and tax commissioner Quader Sarker.
"The taxpayers will get TIN certificates and free advisory services in the service centre," Aminul Karim told the FE Thursday.
The main objective of the centre is to remove the fear factor among the taxpayers and encourage voluntary tax payment by ensuring better service, he said.
There will be facilities for online submission of income tax returns, issuance of the Taxpayers Identification Number (TIN) etc in the service centre, he added.
"Initially the service will be limited for taxpayers of some selective zones to avoid rush. Gradually, the service will be available for all the taxpayers," he said.
The service centre is established with the financial assistance of the Department for International Development (DFID) of the UK under the Tax Administration, Capacities and Taxpayers Services (TACTS) project, he added.
Officials said the NBR will outsource the work to ensure smooth services.
Usually, people feel uncomfortable to visit tax offices for obtaining services or submitting tax returns for fear of harassment. The taxpayers will be able to get services from the centre instead of going to tax offices.
The centre will provide all necessary support to the taxpayers and give one-stop service.
Turnover dips to 7-month low on DSE
Express (September 09, 2011)
Dhaka stocks returned to negative territory again Thursday, a day after moderate gain, with turnover declined to seven and a half-month low as liquidity crisis continued in the stock market.
The lack of confidence and lower participation of institutional investors dragged down the market as turnover value failed to cross even Tk 2.5 billion, said a stock broker.
Amid lower participation of small and institutional investors, total turnover value declined to Tk 2.41 billion since January 25 when turnover value was Tk 2.06 billion.
The market witnessed choppy trading for the first three hours as the index moved along with hardly any volatility. The last hour it witnessed some aggressive sell-off and finally closed 18 points lower.
The benchmark General Index of the DSE, the main gauge of the market, went down by 18.22 points or 0.29 per cent to close at 6,077.31.
The broader All Shares Price Index (DSI) shed 12.95 points or 0.25 per cent to close at 5,088.41. The DSE-20 Index comprising blue-chip shares also lost 2.03 points or 0.04 per cent to close at 4,144.51.
The investors are suffering from lack of confidence following the dearth of ongoing liquidity in the market as turnover is very low amid thin participation of investors," said a stock broker.
"The majority of investors are watching the movement of the market while big and institutional investors remain inactive, which contributed to the lower turnover," he said.
"Stalemate continued in bourse and poorest turnover and volume reflected acute dearth of liquidity in the market," said LankaBangla Securities in its daily market analysis.
"To break the stalemate, regulator gave stock split stimulus to spur the market activities before Eid vacation but the split recipe was largely outshone by the cautionary move of investors after the central bank's policy interest rates hike apart from other factors," it said.
Tightening monetary policy tools have already made the short term borrowing more expensive for the banks and financial institutions, it said.
Investors who have been waiting to participate are now skeptical of taking fresh exposure in the market amid very poor activities, it added.
"Despite news regarding the Dhaka Stock Exchange's (DSE) initiative to sit with top brokers on coming Sunday to discuss about the declining turnover, market was unable to stage any rally after previous day's uptrend where ICB reportedly provided support to the market," a market insider said.
The DSE will hold a meeting with the top 30 brokerage houses to discuss the overall market situation and find out the way how the market will stablise.
Share price of all the major sectors declined except cement sector as the market witnessed selling pressure all across the board.
Cement sector was the best performing sector of the day gaining 0.83 per cent as share price of heavyweight Lafarge Surma Cement rise following the news of their right offer.
Banking sector lost 0.2 per cent whereas NBFIs, insurance, and fuel and power sector declined by 0.5 per cent, 0.8 per cent and 0.3 per cent respectively.
Most of the share price traded on the day declined. Out of 251 issues traded, only 80 advanced, 156 declined while 15 remained unchanged.
A total of only 24.36 million shares changed hands on the day against 35.89 million in the previous session. The trade deals also declined to 64,584 against Wednesday's 75,574.
Total market capitalisation of the DSE, declined to Tk 2,899.63 billion against Tk 2,906.74 billion in the previous session.
Lafarge Surma Cement also topped the turnover list with shares worth Tk 218.02 million changing hands.
The other turnover leaders were Titas Gas, UCBL, Beximco Ltd, Jamuna Oil, National Bank Ltd, Square Pharma, Grameenphone, One Bank Ltd and CMC Kamal.
Legacy Footwear was the day's highest gainer posting a rise of 9.92 per cent.
It was followed by ICB AMCL Islamic Mutual Fund, Monno Stafflers, MBL First Mutual Fund, Anlima Yarn, BD Auto Cars, Libra Infusion, Reliance Insurance, Sixth ICB and Standard Ceramics.
The day's worst losers included Seventh ICB, Progressive Life Insurance, Dulamia Cotton, Green Delta Life Insurance, Meghna Condensed Milk, Global Insurance, Bangas Ltd, Meghna Petroleum, Fu-Wang Foods and Apex Foods.
Dhaka stocks returned to negative territory again Thursday, a day after moderate gain, with turnover declined to seven and a half-month low as liquidity crisis continued in the stock market.
The lack of confidence and lower participation of institutional investors dragged down the market as turnover value failed to cross even Tk 2.5 billion, said a stock broker.
Amid lower participation of small and institutional investors, total turnover value declined to Tk 2.41 billion since January 25 when turnover value was Tk 2.06 billion.
The market witnessed choppy trading for the first three hours as the index moved along with hardly any volatility. The last hour it witnessed some aggressive sell-off and finally closed 18 points lower.
The benchmark General Index of the DSE, the main gauge of the market, went down by 18.22 points or 0.29 per cent to close at 6,077.31.
The broader All Shares Price Index (DSI) shed 12.95 points or 0.25 per cent to close at 5,088.41. The DSE-20 Index comprising blue-chip shares also lost 2.03 points or 0.04 per cent to close at 4,144.51.
The investors are suffering from lack of confidence following the dearth of ongoing liquidity in the market as turnover is very low amid thin participation of investors," said a stock broker.
"The majority of investors are watching the movement of the market while big and institutional investors remain inactive, which contributed to the lower turnover," he said.
"Stalemate continued in bourse and poorest turnover and volume reflected acute dearth of liquidity in the market," said LankaBangla Securities in its daily market analysis.
"To break the stalemate, regulator gave stock split stimulus to spur the market activities before Eid vacation but the split recipe was largely outshone by the cautionary move of investors after the central bank's policy interest rates hike apart from other factors," it said.
Tightening monetary policy tools have already made the short term borrowing more expensive for the banks and financial institutions, it said.
Investors who have been waiting to participate are now skeptical of taking fresh exposure in the market amid very poor activities, it added.
"Despite news regarding the Dhaka Stock Exchange's (DSE) initiative to sit with top brokers on coming Sunday to discuss about the declining turnover, market was unable to stage any rally after previous day's uptrend where ICB reportedly provided support to the market," a market insider said.
The DSE will hold a meeting with the top 30 brokerage houses to discuss the overall market situation and find out the way how the market will stablise.
Share price of all the major sectors declined except cement sector as the market witnessed selling pressure all across the board.
Cement sector was the best performing sector of the day gaining 0.83 per cent as share price of heavyweight Lafarge Surma Cement rise following the news of their right offer.
Banking sector lost 0.2 per cent whereas NBFIs, insurance, and fuel and power sector declined by 0.5 per cent, 0.8 per cent and 0.3 per cent respectively.
Most of the share price traded on the day declined. Out of 251 issues traded, only 80 advanced, 156 declined while 15 remained unchanged.
A total of only 24.36 million shares changed hands on the day against 35.89 million in the previous session. The trade deals also declined to 64,584 against Wednesday's 75,574.
Total market capitalisation of the DSE, declined to Tk 2,899.63 billion against Tk 2,906.74 billion in the previous session.
Lafarge Surma Cement also topped the turnover list with shares worth Tk 218.02 million changing hands.
The other turnover leaders were Titas Gas, UCBL, Beximco Ltd, Jamuna Oil, National Bank Ltd, Square Pharma, Grameenphone, One Bank Ltd and CMC Kamal.
Legacy Footwear was the day's highest gainer posting a rise of 9.92 per cent.
It was followed by ICB AMCL Islamic Mutual Fund, Monno Stafflers, MBL First Mutual Fund, Anlima Yarn, BD Auto Cars, Libra Infusion, Reliance Insurance, Sixth ICB and Standard Ceramics.
The day's worst losers included Seventh ICB, Progressive Life Insurance, Dulamia Cotton, Green Delta Life Insurance, Meghna Condensed Milk, Global Insurance, Bangas Ltd, Meghna Petroleum, Fu-Wang Foods and Apex Foods.
Insurance company faces music
Express (September 09, 2011)
Insurance Development and Regulatory Authority (IDRA) has started taking strict measures to bring healthy competition among the insurers to regulate the sector.
The Central Rating Committee in its 143rd meeting held on July 12 and an emergency meeting on August 10 took a number of wide ranging decisions effective from September 04 to regulate the insurance industry.
As part of its move, IDRA has imposed a penalty of Tk 0.45 million (Tk 4,50,000) to Agrani Insurance Company Ltd for violating tariff rates.
Agrani faced a hearing Thursday in the city where IDRA has announced the penalty.
IDRA Chairman Shefaque Ahmed with its two members, Agrani Insurance Company's Managing Director (MD) and Branch Manager and Member Secretary of Central Rating Committee, among others, were present in the hearing.
It imposed a fine of Tk 0.3 million to the company, Tk 0.1 million to Company's MD Anwar Hossain and Tk 50, 000 to its Executive Vice President and Incharge of Dilkusha Branch Munshi Anwar Hossain.
IDRA officials said violation of tariff rates has a huge negative impact on the industry. Due to this malpractice, the company as well as share holders deprive from income and benefits.
The government also losses its revenue, they added.
"Such type of step helps create a healthy competition among the insurance industry players to create a level playing field for all," an IDRA official said.
Had there been no such practice the premium income would have been doubled, he added.
When contacted Agrani Insurance Company Ltd MD Mr Anwar Hossain declined to make any comment on this issue.
Insurance Development and Regulatory Authority (IDRA) has started taking strict measures to bring healthy competition among the insurers to regulate the sector.
The Central Rating Committee in its 143rd meeting held on July 12 and an emergency meeting on August 10 took a number of wide ranging decisions effective from September 04 to regulate the insurance industry.
As part of its move, IDRA has imposed a penalty of Tk 0.45 million (Tk 4,50,000) to Agrani Insurance Company Ltd for violating tariff rates.
Agrani faced a hearing Thursday in the city where IDRA has announced the penalty.
IDRA Chairman Shefaque Ahmed with its two members, Agrani Insurance Company's Managing Director (MD) and Branch Manager and Member Secretary of Central Rating Committee, among others, were present in the hearing.
It imposed a fine of Tk 0.3 million to the company, Tk 0.1 million to Company's MD Anwar Hossain and Tk 50, 000 to its Executive Vice President and Incharge of Dilkusha Branch Munshi Anwar Hossain.
IDRA officials said violation of tariff rates has a huge negative impact on the industry. Due to this malpractice, the company as well as share holders deprive from income and benefits.
The government also losses its revenue, they added.
"Such type of step helps create a healthy competition among the insurance industry players to create a level playing field for all," an IDRA official said.
Had there been no such practice the premium income would have been doubled, he added.
When contacted Agrani Insurance Company Ltd MD Mr Anwar Hossain declined to make any comment on this issue.
DSE CEO resigns
Express (September 09, 2011)
Dhaka Stock Exchange (DSE) Chief Executive Officer (CEO) Satipati Moitra Thursday resigned on health ground, officials said.
DSE President Md. Shakil Rizvi confirmed the news about Mr Satipati's resignation letter, which was accepted by DSE board on the same day.
Mr. Rizvi said the DSE board requested Mr. Moitra to carry on his job.
"But Mr. Moitra expressed his unwillingness to continue the job of DSE CEO. Before Eid-ul-Fitr, the CEO also wanted to resign on heath ground," Mr. Rizvi told the FE.
Another source said, Mr. Moitra’s resignation came following some bourse members ‘reservation’ about him.
However, the source specifically said nothing about the reservation against Mr Moitra.
The CEO was not available to make comment on his resignation.
In December 2010, Moitra resigned from his post on health ground for the second time. However DSE board of directors made him agreed to continue his job.
According to competent sources, the then CEO's resignation came following criticism from different quarters about his inability to convince the people concerned on a number of sensitive issues involving the interests of the DSE members.
Then some DSE members criticised the CEO strongly following his alleged failure to convince the SEC to keep the member's margin deposit provision unchanged.
In November, 2010, DSE CEO had begged apology to the SEC for implementing some parameters for calculating the index despite receiving prior consent of the SEC for it.
After implementing the parameters, the CEO had duly informed the regulator about index calculation.
Dhaka Stock Exchange (DSE) Chief Executive Officer (CEO) Satipati Moitra Thursday resigned on health ground, officials said.
DSE President Md. Shakil Rizvi confirmed the news about Mr Satipati's resignation letter, which was accepted by DSE board on the same day.
Mr. Rizvi said the DSE board requested Mr. Moitra to carry on his job.
"But Mr. Moitra expressed his unwillingness to continue the job of DSE CEO. Before Eid-ul-Fitr, the CEO also wanted to resign on heath ground," Mr. Rizvi told the FE.
Another source said, Mr. Moitra’s resignation came following some bourse members ‘reservation’ about him.
However, the source specifically said nothing about the reservation against Mr Moitra.
The CEO was not available to make comment on his resignation.
In December 2010, Moitra resigned from his post on health ground for the second time. However DSE board of directors made him agreed to continue his job.
According to competent sources, the then CEO's resignation came following criticism from different quarters about his inability to convince the people concerned on a number of sensitive issues involving the interests of the DSE members.
Then some DSE members criticised the CEO strongly following his alleged failure to convince the SEC to keep the member's margin deposit provision unchanged.
In November, 2010, DSE CEO had begged apology to the SEC for implementing some parameters for calculating the index despite receiving prior consent of the SEC for it.
After implementing the parameters, the CEO had duly informed the regulator about index calculation.
Five private cos to get $192m foreign loans
Express (September 09, 2011)
Bangladesh's trade relations with India are now poised to witness a remarkable stride following the announcement by Indian Prime Minister Dr. Manmohan Singh in Dhaka last Tuesday about providing duty-free access to 46 garment products from its neighbour, according to economic analysts.
"It is, no doubt, a step forward at the moment in terms of trade with India," ABM Azizul Islam, former finance adviser to the past interim government told the FE.
If the 46 Bangladesh garments products enjoy quota-free access, then it is a really prospective step forward, but the announcement of Dr. Manmohan did not amply clarify this point, the former finance adviser said.
Mr. Zahid Bakth, research director of Bangladesh Institute of Development Studies (BIDS) said: "The announcement for duty-free access for 46 products is a positive development."
He said it is an achievement for Bangladesh's apparel sector, despite the fact that India has its own expanding garments sector and also a strong anti-Bangladesh lobby.
Mr. Zahidi Sattar, a leading economist of the country also said the Indian gesture would help Bangladesh to help boost its readymade garments (RMG) exports to India.
"India's garment market is worth $30 billion and Bangladesh can have a big share of it," Mr. Sattar told the FE.
"The access for 46 products to India for which our exporters had to struggle for years, will definitely boost our garment sector," Prof. Abul Barakat, chairman of Economics Department of the Dhaka University told the FE.
India has a large and expanding middle class and Bangladesh has world-class garment producers, so garment exports to India will get a new dimension.
But still there may some non-tariff barriers, which should be addressed in course of time, through a mechanism to be evolved through inter-actions between the two sides.
"We should be more diplomatic and intelligent to carry forward the facilities that we have achieved following years of efforts and persuasion," Barakat said.
Mr Bakth, however, expressed the hope that there would be no, or, less barriers at the state-level in federal India as was assured last Wednesday by the chief ministers accompanying the Indian PM Manmohan Singh.
Former finance adviser Azizul Islam endorsed the expectations of the BGMEA that India could be the third largest buyers of Bangladesh RMG products after the Europe Union and the USA.
"For this to happen, the members of the BGMEA must increase their capability to meet the demand in the enlarging market when India imports more apparel items from Bangladesh", he added.
Without increasing capacity, enlargement of the export market will not be possible, he observed.
"Otherwise, to feed a new market we may lose the established markets like Europe and the USA. So with the opening of a new horizon, we must increase our production capability", he stated.
"To increase supply to India, we must not reduce supply to our established markets."
"India should not be substitute for our established markets like Europe and the USA," Azizul Islam added.
For this, Bangladesh, he noted should also improve its infrastructural facilities including utility services like those of power, water and other logistic supports for the garments sector.
Bangladesh must increase power generation and make efforts to augment energy supplies from sources like gas, coal etc, he added.
Bangladesh's trade relations with India are now poised to witness a remarkable stride following the announcement by Indian Prime Minister Dr. Manmohan Singh in Dhaka last Tuesday about providing duty-free access to 46 garment products from its neighbour, according to economic analysts.
"It is, no doubt, a step forward at the moment in terms of trade with India," ABM Azizul Islam, former finance adviser to the past interim government told the FE.
If the 46 Bangladesh garments products enjoy quota-free access, then it is a really prospective step forward, but the announcement of Dr. Manmohan did not amply clarify this point, the former finance adviser said.
Mr. Zahid Bakth, research director of Bangladesh Institute of Development Studies (BIDS) said: "The announcement for duty-free access for 46 products is a positive development."
He said it is an achievement for Bangladesh's apparel sector, despite the fact that India has its own expanding garments sector and also a strong anti-Bangladesh lobby.
Mr. Zahidi Sattar, a leading economist of the country also said the Indian gesture would help Bangladesh to help boost its readymade garments (RMG) exports to India.
"India's garment market is worth $30 billion and Bangladesh can have a big share of it," Mr. Sattar told the FE.
"The access for 46 products to India for which our exporters had to struggle for years, will definitely boost our garment sector," Prof. Abul Barakat, chairman of Economics Department of the Dhaka University told the FE.
India has a large and expanding middle class and Bangladesh has world-class garment producers, so garment exports to India will get a new dimension.
But still there may some non-tariff barriers, which should be addressed in course of time, through a mechanism to be evolved through inter-actions between the two sides.
"We should be more diplomatic and intelligent to carry forward the facilities that we have achieved following years of efforts and persuasion," Barakat said.
Mr Bakth, however, expressed the hope that there would be no, or, less barriers at the state-level in federal India as was assured last Wednesday by the chief ministers accompanying the Indian PM Manmohan Singh.
Former finance adviser Azizul Islam endorsed the expectations of the BGMEA that India could be the third largest buyers of Bangladesh RMG products after the Europe Union and the USA.
"For this to happen, the members of the BGMEA must increase their capability to meet the demand in the enlarging market when India imports more apparel items from Bangladesh", he added.
Without increasing capacity, enlargement of the export market will not be possible, he observed.
"Otherwise, to feed a new market we may lose the established markets like Europe and the USA. So with the opening of a new horizon, we must increase our production capability", he stated.
"To increase supply to India, we must not reduce supply to our established markets."
"India should not be substitute for our established markets like Europe and the USA," Azizul Islam added.
For this, Bangladesh, he noted should also improve its infrastructural facilities including utility services like those of power, water and other logistic supports for the garments sector.
Bangladesh must increase power generation and make efforts to augment energy supplies from sources like gas, coal etc, he added.
Economists upbeat about increasing exports to India
Express (September 09, 2011)
Bangladesh's trade relations with India are now poised to witness a remarkable stride following the announcement by Indian Prime Minister Dr. Manmohan Singh in Dhaka last Tuesday about providing duty-free access to 46 garment products from its neighbour, according to economic analysts.
"It is, no doubt, a step forward at the moment in terms of trade with India," ABM Azizul Islam, former finance adviser to the past interim government told the FE.
If the 46 Bangladesh garments products enjoy quota-free access, then it is a really prospective step forward, but the announcement of Dr. Manmohan did not amply clarify this point, the former finance adviser said.
Mr. Zahid Bakth, research director of Bangladesh Institute of Development Studies (BIDS) said: "The announcement for duty-free access for 46 products is a positive development."
He said it is an achievement for Bangladesh's apparel sector, despite the fact that India has its own expanding garments sector and also a strong anti-Bangladesh lobby.
Mr. Zahidi Sattar, a leading economist of the country also said the Indian gesture would help Bangladesh to help boost its readymade garments (RMG) exports to India.
"India's garment market is worth $30 billion and Bangladesh can have a big share of it," Mr. Sattar told the FE.
"The access for 46 products to India for which our exporters had to struggle for years, will definitely boost our garment sector," Prof. Abul Barakat, chairman of Economics Department of the Dhaka University told the FE.
India has a large and expanding middle class and Bangladesh has world-class garment producers, so garment exports to India will get a new dimension.
But still there may some non-tariff barriers, which should be addressed in course of time, through a mechanism to be evolved through inter-actions between the two sides.
"We should be more diplomatic and intelligent to carry forward the facilities that we have achieved following years of efforts and persuasion," Barakat said.
Mr Bakth, however, expressed the hope that there would be no, or, less barriers at the state-level in federal India as was assured last Wednesday by the chief ministers accompanying the Indian PM Manmohan Singh.
Former finance adviser Azizul Islam endorsed the expectations of the BGMEA that India could be the third largest buyers of Bangladesh RMG products after the Europe Union and the USA.
"For this to happen, the members of the BGMEA must increase their capability to meet the demand in the enlarging market when India imports more apparel items from Bangladesh", he added.
Without increasing capacity, enlargement of the export market will not be possible, he observed.
"Otherwise, to feed a new market we may lose the established markets like Europe and the USA. So with the opening of a new horizon, we must increase our production capability", he stated.
"To increase supply to India, we must not reduce supply to our established markets."
"India should not be substitute for our established markets like Europe and the USA," Azizul Islam added.
For this, Bangladesh, he noted should also improve its infrastructural facilities including utility services like those of power, water and other logistic supports for the garments sector.
Bangladesh must increase power generation and make efforts to augment energy supplies from sources like gas, coal etc, he added.
Bangladesh's trade relations with India are now poised to witness a remarkable stride following the announcement by Indian Prime Minister Dr. Manmohan Singh in Dhaka last Tuesday about providing duty-free access to 46 garment products from its neighbour, according to economic analysts.
"It is, no doubt, a step forward at the moment in terms of trade with India," ABM Azizul Islam, former finance adviser to the past interim government told the FE.
If the 46 Bangladesh garments products enjoy quota-free access, then it is a really prospective step forward, but the announcement of Dr. Manmohan did not amply clarify this point, the former finance adviser said.
Mr. Zahid Bakth, research director of Bangladesh Institute of Development Studies (BIDS) said: "The announcement for duty-free access for 46 products is a positive development."
He said it is an achievement for Bangladesh's apparel sector, despite the fact that India has its own expanding garments sector and also a strong anti-Bangladesh lobby.
Mr. Zahidi Sattar, a leading economist of the country also said the Indian gesture would help Bangladesh to help boost its readymade garments (RMG) exports to India.
"India's garment market is worth $30 billion and Bangladesh can have a big share of it," Mr. Sattar told the FE.
"The access for 46 products to India for which our exporters had to struggle for years, will definitely boost our garment sector," Prof. Abul Barakat, chairman of Economics Department of the Dhaka University told the FE.
India has a large and expanding middle class and Bangladesh has world-class garment producers, so garment exports to India will get a new dimension.
But still there may some non-tariff barriers, which should be addressed in course of time, through a mechanism to be evolved through inter-actions between the two sides.
"We should be more diplomatic and intelligent to carry forward the facilities that we have achieved following years of efforts and persuasion," Barakat said.
Mr Bakth, however, expressed the hope that there would be no, or, less barriers at the state-level in federal India as was assured last Wednesday by the chief ministers accompanying the Indian PM Manmohan Singh.
Former finance adviser Azizul Islam endorsed the expectations of the BGMEA that India could be the third largest buyers of Bangladesh RMG products after the Europe Union and the USA.
"For this to happen, the members of the BGMEA must increase their capability to meet the demand in the enlarging market when India imports more apparel items from Bangladesh", he added.
Without increasing capacity, enlargement of the export market will not be possible, he observed.
"Otherwise, to feed a new market we may lose the established markets like Europe and the USA. So with the opening of a new horizon, we must increase our production capability", he stated.
"To increase supply to India, we must not reduce supply to our established markets."
"India should not be substitute for our established markets like Europe and the USA," Azizul Islam added.
For this, Bangladesh, he noted should also improve its infrastructural facilities including utility services like those of power, water and other logistic supports for the garments sector.
Bangladesh must increase power generation and make efforts to augment energy supplies from sources like gas, coal etc, he added.
Thursday, September 8
Renata's jt venture with Indian co to market anti-cancer products
Express (September 08, 2011)
Renata Limited in co-operation with Indian Natco Pharma will set up a pharmaceutical company in a bid to develop and market anti-cancer products in the country at affordable prices.
A memorandum of understanding (MoU) was signed last week between the two companies regarding the joint venture envisages for setting up API and Dosage form manufacturing facilities in Bangladesh, a statement issued by Renata Limited said Wednesday.
"The purpose of the joint venture for setting up 'Renata Oncology Limited' is also focused on to exploit opportunities for exports in the international market," the statement said.
According to Dhaka Stock Exchange (DSE) website the company's expected initial investment for the said MOU will be $1.0 million.
Renata expects the new company will start operation by the end of 2012 and there will be no significant impact on earnings per share for the next 2 years, the website said.
Natco Pharma is a specialty pharmaceutical company developing, manufacturing and marketing pharmaceutical products. Natco has leadership position in Oncology segment in India. Apart from a branded generic business Natco is engaged in Discovery research and development of novel drug delivery systems.
The last traded price of per Renata share was Tk 12500 Wednesday, 0.56 per cent lower than that of Tuesday.
Chairman of Renata Limited SH Kabir, in its annual report 2010, said, significantly, we entered into negotiations with a foreign company to set up an Active Pharmaceutical Ingredient (API) facility to take advantage of TRIPS. If these negotiations are successful, we expect to begin construction in the second half of 2011.
The public limited company incorporated in Bangladesh in 1972 as Pfizer Laboratories (Bangladesh), under the Companies Act, 1913 and was renamed as "Renata Limited" in 1993.
The authorized capital of the Company is Tk 500 million (Tk 500,000,000) and paid up capital Tk 180.748 million (Tk 180,748,000), according to its annual report.
The Company manufactures and sells various pharmaceutical, animal health, animal nutritional, oral saline, hormone and other medical products in the local market. The Company exports a few of its pharmaceutical products to some foreign markets.
Renata Limited in co-operation with Indian Natco Pharma will set up a pharmaceutical company in a bid to develop and market anti-cancer products in the country at affordable prices.
A memorandum of understanding (MoU) was signed last week between the two companies regarding the joint venture envisages for setting up API and Dosage form manufacturing facilities in Bangladesh, a statement issued by Renata Limited said Wednesday.
"The purpose of the joint venture for setting up 'Renata Oncology Limited' is also focused on to exploit opportunities for exports in the international market," the statement said.
According to Dhaka Stock Exchange (DSE) website the company's expected initial investment for the said MOU will be $1.0 million.
Renata expects the new company will start operation by the end of 2012 and there will be no significant impact on earnings per share for the next 2 years, the website said.
Natco Pharma is a specialty pharmaceutical company developing, manufacturing and marketing pharmaceutical products. Natco has leadership position in Oncology segment in India. Apart from a branded generic business Natco is engaged in Discovery research and development of novel drug delivery systems.
The last traded price of per Renata share was Tk 12500 Wednesday, 0.56 per cent lower than that of Tuesday.
Chairman of Renata Limited SH Kabir, in its annual report 2010, said, significantly, we entered into negotiations with a foreign company to set up an Active Pharmaceutical Ingredient (API) facility to take advantage of TRIPS. If these negotiations are successful, we expect to begin construction in the second half of 2011.
The public limited company incorporated in Bangladesh in 1972 as Pfizer Laboratories (Bangladesh), under the Companies Act, 1913 and was renamed as "Renata Limited" in 1993.
The authorized capital of the Company is Tk 500 million (Tk 500,000,000) and paid up capital Tk 180.748 million (Tk 180,748,000), according to its annual report.
The Company manufactures and sells various pharmaceutical, animal health, animal nutritional, oral saline, hormone and other medical products in the local market. The Company exports a few of its pharmaceutical products to some foreign markets.
DSE leaders sit with brokers Sunday on falling turnover
Star (September 08, 2011)
Dhaka Stock Exchange leaders will sit with top 30 brokerage firms in terms of turnover on Sunday to discuss ways of rejuvenating the stockmarket.
“We want to find out why turnover declined. We are trying to take positive measures to increase the volume of turnover,” said Ahasanul Islam, senior vice president of DSE.
A list of large institutional investors will be drawn at the meeting through discussion with the brokerage firms and positive measures will be taken to increase the big parties' participation, he added.
“We are concerned about the sliding turnover,” said Islam, adding that 60 percent of institutional participation is very important in every share for the well-being of small investors.
He also said overheated shares will not be sold if corporate participation increases in every share.
Shakil Rizvi, president of DSE, and a number of directors will join the meeting, said Shafiqur Rahman, deputy general manger of DSE.
DGEN returned to the black, breaking a three-day losing streak, as investors used low prices of shares as a buying opportunity yesterday.
The benchmark General Index of DSE closed on 6,095.54 points, after gaining 29.94 points or 0.49 percent.
Most sectors closed positively and the textile sector moved up as Bangladesh got duty-free access for its 46 textile items to the Indian market, said Green Delta Securities, one of the leading stockbrokers.
Turnover on the DSE slipped 15.9 percent to Tk 308 crore from the previous day.
Of the total 253 issues traded on the DSE floor, 164 advanced and 76 declined. Thirteen securities remained unchanged. Among the DSE-20 blue chips, only nice closed positive.
The banking sector gained 0.63 percent, making 30 percent of the total market capitalisation. Out of 30 bank issues only four closed negative, while the non-bank financial institutions lost o.5 percent and out of 21 issues 14 closed positive.
Grameenphone, which represents the telecoms sector, gained 1.14 percent, fuel and power 0.60 percent and textile 1.14 percent.
Jamuna Oil topped the turnover value with 6.12 lakh shares worth Tk 16.88 crore changing hands.
BD Autocars was the biggest gainer of the day, posting a 5.46 percent rise. Anwar Galvanizing slumped 5.02 percent to end up as the worst loser.
Dhaka Stock Exchange leaders will sit with top 30 brokerage firms in terms of turnover on Sunday to discuss ways of rejuvenating the stockmarket.
“We want to find out why turnover declined. We are trying to take positive measures to increase the volume of turnover,” said Ahasanul Islam, senior vice president of DSE.
A list of large institutional investors will be drawn at the meeting through discussion with the brokerage firms and positive measures will be taken to increase the big parties' participation, he added.
“We are concerned about the sliding turnover,” said Islam, adding that 60 percent of institutional participation is very important in every share for the well-being of small investors.
He also said overheated shares will not be sold if corporate participation increases in every share.
Shakil Rizvi, president of DSE, and a number of directors will join the meeting, said Shafiqur Rahman, deputy general manger of DSE.
DGEN returned to the black, breaking a three-day losing streak, as investors used low prices of shares as a buying opportunity yesterday.
The benchmark General Index of DSE closed on 6,095.54 points, after gaining 29.94 points or 0.49 percent.
Most sectors closed positively and the textile sector moved up as Bangladesh got duty-free access for its 46 textile items to the Indian market, said Green Delta Securities, one of the leading stockbrokers.
Turnover on the DSE slipped 15.9 percent to Tk 308 crore from the previous day.
Of the total 253 issues traded on the DSE floor, 164 advanced and 76 declined. Thirteen securities remained unchanged. Among the DSE-20 blue chips, only nice closed positive.
The banking sector gained 0.63 percent, making 30 percent of the total market capitalisation. Out of 30 bank issues only four closed negative, while the non-bank financial institutions lost o.5 percent and out of 21 issues 14 closed positive.
Grameenphone, which represents the telecoms sector, gained 1.14 percent, fuel and power 0.60 percent and textile 1.14 percent.
Jamuna Oil topped the turnover value with 6.12 lakh shares worth Tk 16.88 crore changing hands.
BD Autocars was the biggest gainer of the day, posting a 5.46 percent rise. Anwar Galvanizing slumped 5.02 percent to end up as the worst loser.
SEC to seek investment info from fund managers
Star (September 08, 2011)
The stockmarket regulator will seek investment information from the mutual fund managers in the backdrop of a bearish trend in the market.
The Securities and Exchange Commission wants to see whether the managers are utilising the funds properly in the market, which is now facing a liquidity dearth, an SEC official said yesterday.
“The commission will issue letters to the fund managers seeking their investment information,” the official said, adding that it is a responsibility of the regulator to see how the managers are using funds that were raised from public.
The SEC has also informally requested some mutual fund managers to be active in daily transactions so that the trade volume increases.
Like other investors, mutual fund managers have also taken a wait-and-see policy and remained on the sidelines of the market.
Presently, there are 36 mutual funds with their combined amount of around Tk 3,500 crore.
A mutual fund is a professionally managed collective investment scheme that pools money from many investors and invests it in stocks, bonds and short-term money market instruments.
Although stocks witnessed a rise in their prices yesterday, a bearish trend continued in the market in the last one month and so investors lost confidence and turnover declined drastically.
The market lost over 600 points in the last one and a half months, while the daily turnover came down to Tk 300 crore.
The month-long chronic bearish trend in the market was intensified by a number of factors. Firstly, a confidence loss triggered by the finance minister's comments on the index hike and his dissatisfaction over the consecutive rises in the market prompted the investors to book accumulated gains, said market analysts.
Secondly, the regulator's pre announced action of filing cases against some individual investors allegedly involved in the stockmarket manipulation kept the investors in anxiety and contributed to a selling spree.
Also the liquidity dearth due to a high demand of money ahead of Eid-ul-Fitr almost kept the institutional investors inactive in the market, while retail investors remained on the sidelines, seeing the continuous volatility, they said.
Though in the past, participation used to improve on the eve of and after the festivity, both institutions and retail investors acted differently this year due to those factors.
The investors who have been waiting to participate are now very skeptical of taking fresh exposure in the market.
The stockmarket regulator will seek investment information from the mutual fund managers in the backdrop of a bearish trend in the market.
The Securities and Exchange Commission wants to see whether the managers are utilising the funds properly in the market, which is now facing a liquidity dearth, an SEC official said yesterday.
“The commission will issue letters to the fund managers seeking their investment information,” the official said, adding that it is a responsibility of the regulator to see how the managers are using funds that were raised from public.
The SEC has also informally requested some mutual fund managers to be active in daily transactions so that the trade volume increases.
Like other investors, mutual fund managers have also taken a wait-and-see policy and remained on the sidelines of the market.
Presently, there are 36 mutual funds with their combined amount of around Tk 3,500 crore.
A mutual fund is a professionally managed collective investment scheme that pools money from many investors and invests it in stocks, bonds and short-term money market instruments.
Although stocks witnessed a rise in their prices yesterday, a bearish trend continued in the market in the last one month and so investors lost confidence and turnover declined drastically.
The market lost over 600 points in the last one and a half months, while the daily turnover came down to Tk 300 crore.
The month-long chronic bearish trend in the market was intensified by a number of factors. Firstly, a confidence loss triggered by the finance minister's comments on the index hike and his dissatisfaction over the consecutive rises in the market prompted the investors to book accumulated gains, said market analysts.
Secondly, the regulator's pre announced action of filing cases against some individual investors allegedly involved in the stockmarket manipulation kept the investors in anxiety and contributed to a selling spree.
Also the liquidity dearth due to a high demand of money ahead of Eid-ul-Fitr almost kept the institutional investors inactive in the market, while retail investors remained on the sidelines, seeing the continuous volatility, they said.
Though in the past, participation used to improve on the eve of and after the festivity, both institutions and retail investors acted differently this year due to those factors.
The investors who have been waiting to participate are now very skeptical of taking fresh exposure in the market.
Tuesday, September 6
securities regulator has rejected the proposal of bonus dividends by the fund managers of closed-end mutual fund
Express (August 21, 2011)
The securities regulator has rejected the proposal of bonus dividends by the fund managers of closed-end mutual funds, officials said.
The decision came at a commission meeting, chaired by the Securities and Exchange Commission (SEC) Chairman Professor M Khairul Hossain, held at the SEC office last week.
Recently, some fund managers submitted a number of proposals, including an opportunity for closed-end mutual funds to offer bonus shares.
An SEC official said the commission has decided not to approve the proposal of offering bonus shares against the units of closed-end mutual funds considering the nature of such funds.
"The opportunity of bonus offering will contradict with the nature and characteristics of closed-end mutual fund. That's why the regulator has rejected the proposal for the sake of market's discipline," the official said.
On June 26, 2008, the SEC revised the Mutual Fund Act 2001, imposing restriction on the bonus and right offers by closed-end mutual funds.
In November 2009, the High Court said in its verdict that the closed-end mutual funds, which went public before the amendment of mutual fund act, will be able to offer bonus and right shares.
Recently, Bangladesh Association of Asset Management Companies (BAAMC) sought regulatory consent in offering bonus dividend against the units of closed-end mutual fund in an effort to increase investors' concentration to mutual funds.
Some other mutual funds, including AIMS, said they are not in opposition of BAAMC's proposal of offering bonus shares.
"The problem was earlier solved by the High Court. So, the fresh proposal is nothing but to disturb the market," Yawer Sayeed, the Managing Director & CEO of AIMS of Bangladesh, told the FE.
The securities regulator has rejected the proposal of bonus dividends by the fund managers of closed-end mutual funds, officials said.
The decision came at a commission meeting, chaired by the Securities and Exchange Commission (SEC) Chairman Professor M Khairul Hossain, held at the SEC office last week.
Recently, some fund managers submitted a number of proposals, including an opportunity for closed-end mutual funds to offer bonus shares.
An SEC official said the commission has decided not to approve the proposal of offering bonus shares against the units of closed-end mutual funds considering the nature of such funds.
"The opportunity of bonus offering will contradict with the nature and characteristics of closed-end mutual fund. That's why the regulator has rejected the proposal for the sake of market's discipline," the official said.
On June 26, 2008, the SEC revised the Mutual Fund Act 2001, imposing restriction on the bonus and right offers by closed-end mutual funds.
In November 2009, the High Court said in its verdict that the closed-end mutual funds, which went public before the amendment of mutual fund act, will be able to offer bonus and right shares.
Recently, Bangladesh Association of Asset Management Companies (BAAMC) sought regulatory consent in offering bonus dividend against the units of closed-end mutual fund in an effort to increase investors' concentration to mutual funds.
Some other mutual funds, including AIMS, said they are not in opposition of BAAMC's proposal of offering bonus shares.
"The problem was earlier solved by the High Court. So, the fresh proposal is nothing but to disturb the market," Yawer Sayeed, the Managing Director & CEO of AIMS of Bangladesh, told the FE.
BB raises key policy rates
Star (September 06, 2011)
Bangladesh Bank has increased the policy rates for the fifth time in the last 13 months as non-food inflation jumped in the last few months.
The central bank yesterday raised the repurchase rate, at which it lends to commercial banks, to 7.25 percent from 6.75 percent.
The reverse repurchase rate was increased to 5.25 percent from 4.75 percent. The changes came into effect yesterday.
“Inflation may increase further in September,” BB governor Atiur Rahman told The Daily Star yesterday. “We are using our policy tools to make credit costly and control inflation.”
The inflation decreased 0.03 percentage points in June compared to that in May but in July it again rose 0.79 percentage points to 10.96 percent.
The most alarming thing is that non-food inflation rate has been increasing extremely over the last few months.
It increased about 1 percentage point in June and 0.75 percentage point in July.
Non-food inflation will go up in August and September also, said a BB official. People spent more on the eve of Eid that raises the probability of further increase in such inflation.
The central bank took several measures in the last one and a half years to cut credit growth. The growth is still high although it came down to some extent.
Private sector credit growth at the end of June was 25.84 percent. A few months back it was over 29 percent. The Monetary Policy Statement announced by the BB in July fixed a target of bringing down private sector credit growth to 18 percent by next June.
The central bank, which has raised interest rates by 275 basis points since August last year, said on July 27 that it plans to persist with a policy of restraining credit growth in current fiscal year although curbing inflation to the government's targeted level may be challenging.
Bangladesh Bank has increased the policy rates for the fifth time in the last 13 months as non-food inflation jumped in the last few months.
The central bank yesterday raised the repurchase rate, at which it lends to commercial banks, to 7.25 percent from 6.75 percent.
The reverse repurchase rate was increased to 5.25 percent from 4.75 percent. The changes came into effect yesterday.
“Inflation may increase further in September,” BB governor Atiur Rahman told The Daily Star yesterday. “We are using our policy tools to make credit costly and control inflation.”
The inflation decreased 0.03 percentage points in June compared to that in May but in July it again rose 0.79 percentage points to 10.96 percent.
The most alarming thing is that non-food inflation rate has been increasing extremely over the last few months.
It increased about 1 percentage point in June and 0.75 percentage point in July.
Non-food inflation will go up in August and September also, said a BB official. People spent more on the eve of Eid that raises the probability of further increase in such inflation.
The central bank took several measures in the last one and a half years to cut credit growth. The growth is still high although it came down to some extent.
Private sector credit growth at the end of June was 25.84 percent. A few months back it was over 29 percent. The Monetary Policy Statement announced by the BB in July fixed a target of bringing down private sector credit growth to 18 percent by next June.
The central bank, which has raised interest rates by 275 basis points since August last year, said on July 27 that it plans to persist with a policy of restraining credit growth in current fiscal year although curbing inflation to the government's targeted level may be challenging.
BB publishes draft guidelines to set up new banks
Express (September 06, 2011)
The central bank has published draft guidelines to establish new banks imposing a restriction to keep the number of directors in their board within 13, officials said.
Under the draft guidelines, the paid-up capital of a new commercial bank will have to be Tk 4.0 billion as required under Bank Company Act 1991. The share capital will be formed with ordinary shares only.
Any interested individual can submit his/her opinions to the general manager of Banking Regulation and Policy Department (BRPD) of the central bank through e-mail or by normal post as early as possible, the BB officials said.
"We'll submit the draft guidelines incorporating the public opinions to the next meeting of our Board of Directors for approval," a BB executive director told the FE Monday.
He also said the next Board meeting is scheduled to be held on September 14.
"The Board may take a final decision on setting up new private commercial banks (PCBs) in the next meeting," another BB official said.
The central banker also said the BB will publish an advertisement for inviting fresh applications from interested entrepreneurs to establish new banks, if the Board gives its approval for allowing new PCBs to operate.
On August 24 last, the Board kept in abeyance a proposal to issue lincences for new PCBs.
"The initial minimum capital of Tk 4.0 billion shall be provided by sponsors of the proposed bank," the Bangladesh Bank (BB) said in its draft guidelines, adding that the bank shall issue public shares within three years from the date of commencement of the banking business.
"Public issues shall be at least equal to the sponsors' share amount," it added.
Currently, the commercial banks maintain a total capital - paid-up and reserve - of Tk 4.0 billion, while a minimum of Tk 2.0 billion has been added as paid-up capital out of the total capital.
The minimum shareholding stake of each sponsor will be Tk 10 million instead of the existing Tk 2.5 million and the maximum will be 10 per cent of the proposed bank's total share capital, according to the guidelines.
"This ceiling of 10 per cent applies to an individual, company or family member, either personally or jointly or both," it added.
"Family" is defined herewith to include spouse, father, mother, son, daughter, brother and sister of the individual or anyone dependent on that individual.
"The number of members of the board of directors shall be restricted to 13," the guidelines said, adding that the chief executive officer (CEO) of the proposed bank shall have at least 15 years' experience in the banking profession.
Relating to the branch expansion policy, the guidelines said the ratio of urban and rural bank branches has to be 1:1 or as per instruction issued by the BB from time to time.
"The new bank has to ensure financing at least 5.0 per cent of its total lending into agricultural sector or as per instruction issued by the central bank from time to time," it added.
Currently, all PCBs and foreign commercial banks are fixing agriculture credit disbursement target at least at 2.5 per cent of their total loans.
The central bank has published draft guidelines to establish new banks imposing a restriction to keep the number of directors in their board within 13, officials said.
Under the draft guidelines, the paid-up capital of a new commercial bank will have to be Tk 4.0 billion as required under Bank Company Act 1991. The share capital will be formed with ordinary shares only.
Any interested individual can submit his/her opinions to the general manager of Banking Regulation and Policy Department (BRPD) of the central bank through e-mail or by normal post as early as possible, the BB officials said.
"We'll submit the draft guidelines incorporating the public opinions to the next meeting of our Board of Directors for approval," a BB executive director told the FE Monday.
He also said the next Board meeting is scheduled to be held on September 14.
"The Board may take a final decision on setting up new private commercial banks (PCBs) in the next meeting," another BB official said.
The central banker also said the BB will publish an advertisement for inviting fresh applications from interested entrepreneurs to establish new banks, if the Board gives its approval for allowing new PCBs to operate.
On August 24 last, the Board kept in abeyance a proposal to issue lincences for new PCBs.
"The initial minimum capital of Tk 4.0 billion shall be provided by sponsors of the proposed bank," the Bangladesh Bank (BB) said in its draft guidelines, adding that the bank shall issue public shares within three years from the date of commencement of the banking business.
"Public issues shall be at least equal to the sponsors' share amount," it added.
Currently, the commercial banks maintain a total capital - paid-up and reserve - of Tk 4.0 billion, while a minimum of Tk 2.0 billion has been added as paid-up capital out of the total capital.
The minimum shareholding stake of each sponsor will be Tk 10 million instead of the existing Tk 2.5 million and the maximum will be 10 per cent of the proposed bank's total share capital, according to the guidelines.
"This ceiling of 10 per cent applies to an individual, company or family member, either personally or jointly or both," it added.
"Family" is defined herewith to include spouse, father, mother, son, daughter, brother and sister of the individual or anyone dependent on that individual.
"The number of members of the board of directors shall be restricted to 13," the guidelines said, adding that the chief executive officer (CEO) of the proposed bank shall have at least 15 years' experience in the banking profession.
Relating to the branch expansion policy, the guidelines said the ratio of urban and rural bank branches has to be 1:1 or as per instruction issued by the BB from time to time.
"The new bank has to ensure financing at least 5.0 per cent of its total lending into agricultural sector or as per instruction issued by the central bank from time to time," it added.
Currently, all PCBs and foreign commercial banks are fixing agriculture credit disbursement target at least at 2.5 per cent of their total loans.
Sunday, September 4
IMF suggests NBR to adopt new VAT law soon
Express (September 04, 2011)
The International Monetary Fund (IMF) has suggested the National Board of Revenue (NBR) to make the proposed VAT law effective without any delay to help prevent revenue leakage.
The multilateral lender recently sent a letter to the revenue board chief, expressing its optimism about speedy adoption of the law, officials said.
The IMF has long been suggesting the government to introduce a new VAT law replacing the existing one.
Earlier, the move to introduce the new VAT law faced blow, following an observation of the Prime Minister on its effect on local industries.
The country's apex chamber leaders are strongly opposed to some of the provisions of the draft VAT law. They met the PM and requested her not to introduce the new law and amend the existing one.
The IMF, in the letter to the revenue board chief, said it hopes the NBR would be able to finalise the draft of the new VAT law by December 2011. It also underscored the need for introducing a direct tax act for the income tax wing.
Officials said the multilateral development partner has expressed its willingness to provide technical assistance and training to the NBR in this connection.
Talking to the FE, the NBR chairman Dr Nasiruddin Ahmed said the revenue board has already incorporated a number of new measures in the existing VAT law.
He said the development partners have inquired about the latest status of the proposed VAT law several times.
Another official of the VAT department said the draft VAT law preparing team did not stop or suspend their work, although the draft law faced several roadblocks earlier.
In November 2009 the government formed a committee, led by economist Dr Ahsan H Mansur, and it had a plan to introduce the law from the current fiscal.
The committee suddenly stopped working for reasons hitherto unknown. Officials said recommendations of the committee faced opposition both from tax officials and businessmen.
Following repeated suggestions from the IMF, the NBR formed another committee, comprising senior VAT officials and chamber leaders, for preparing the draft VAT law. However, it again faced strong opposition from the businessmen.
The officials said the proposed withdrawal of reduced VAT rates for small and medium businesses in the draft VAT law sparked strong criticism, mainly coming from the businessmen.
The International Monetary Fund (IMF) has suggested the National Board of Revenue (NBR) to make the proposed VAT law effective without any delay to help prevent revenue leakage.
The multilateral lender recently sent a letter to the revenue board chief, expressing its optimism about speedy adoption of the law, officials said.
The IMF has long been suggesting the government to introduce a new VAT law replacing the existing one.
Earlier, the move to introduce the new VAT law faced blow, following an observation of the Prime Minister on its effect on local industries.
The country's apex chamber leaders are strongly opposed to some of the provisions of the draft VAT law. They met the PM and requested her not to introduce the new law and amend the existing one.
The IMF, in the letter to the revenue board chief, said it hopes the NBR would be able to finalise the draft of the new VAT law by December 2011. It also underscored the need for introducing a direct tax act for the income tax wing.
Officials said the multilateral development partner has expressed its willingness to provide technical assistance and training to the NBR in this connection.
Talking to the FE, the NBR chairman Dr Nasiruddin Ahmed said the revenue board has already incorporated a number of new measures in the existing VAT law.
He said the development partners have inquired about the latest status of the proposed VAT law several times.
Another official of the VAT department said the draft VAT law preparing team did not stop or suspend their work, although the draft law faced several roadblocks earlier.
In November 2009 the government formed a committee, led by economist Dr Ahsan H Mansur, and it had a plan to introduce the law from the current fiscal.
The committee suddenly stopped working for reasons hitherto unknown. Officials said recommendations of the committee faced opposition both from tax officials and businessmen.
Following repeated suggestions from the IMF, the NBR formed another committee, comprising senior VAT officials and chamber leaders, for preparing the draft VAT law. However, it again faced strong opposition from the businessmen.
The officials said the proposed withdrawal of reduced VAT rates for small and medium businesses in the draft VAT law sparked strong criticism, mainly coming from the businessmen.
Businesses out of leveraging technology, time zone differences and human capital
Express (September 04, 2011)
The most striking thing about information and communication technology is how pervasive it is. ICT devices have diffused across all aspects of modern life - from our social lives to the daily routine of working life - in Indonesia and around the world. This diffusive nature of ICT has led to the rise of the information society, which has created major changes in public expectations, organizational structures and working processes.
The spread of ICT devices has been remarkable. Given that the Internet did not came into public use until the 1990s, it has totally changed the rules of the game as the corporate world knew it. It has been the most vigorous catalyst of change and has been totally instrumental in creating deep social and organizational changes in a way that is nothing short of a paradigm shift.
The private sector, for instance, which initially championed ICT, delivered the efficiency and value to both the business and the customer. Businesses such as Amazon, eBay and AirAsia are all companies that we or our friends use on a regular basis to buy or sell goods and services online.
There are also many old traditional companies such as Marks & Spencer, British Airways and Walmart that have felt the need to change their business model by making the Internet a core part of their growth strategy. The changes include online shopping or having an integrated supply chain with automated stock inventory.
Other sophisticated business changes that need a mention relate to outsourcing of certain activities. The United States and some European countries have outsourced certain business functions to create efficiency and improve financial value. Variations of the outsourcing ideas have also found a take-up by small professional businesses.
For example, in the United States a doctor might see a patient in the evening and carry out some medical tests that are then sent electronically to a company in a country where it is still a working day. The receiving doctor interprets the results, writes a report and sends it back to the doctor in the United States. In the past, it would have taken days to complete this kind of activity, but now it's over in a few hours. Further, the outsourcing cost and benefit of interpreting the results and typing it up as a finished report within tight deadlines is a lot cheaper and simpler than getting those activities completed in-house. The Indian multinationals Infosys and Wipro have created huge businesses out of leveraging technology, time zone differences and human capital.
The US government, while a late entrant in the utilization of ICT, has become a major user of ICT. Having noticed and learned from the private sector about the value and customer satisfaction that technology can generate it is not difficult to see why the government would have stirred activity surrounding the online provision of government services, sometimes dubbed e-Government.
The key reason for e-Government is the government's need to modernize itself. The e-Government initiatives that most are now pursuing are driven by a desire to reduce transaction costs, raise tax revenue, improve efficiency in service delivery, create an environment of trust and transparency, encourage economic growth and advance any public reform agenda it might have.
Some of the most relevant examples of e-Government initiatives include Bhoomi, a program in the Indian state of Karnataka that is designed to computerize land ownership records. It has proved fairly successful in reducing the corruption inherent in the land acquisition process. Administrative corruption was reduced by taking away the discretion to delay or deny by automating the process, keeping a traceable electronic record of transactions and increasing the accountability of public officials.
Online income tax is being carried out by many countries, including in Asia. Singapore started its program in 1992 by introducing an imaging system to electronically process the paper-based income tax returns filed by the citizens. Over the years, the system has been improved to allow tax returns to be completed over the phone and now over the Internet, the ultimate aim being to link the information in various government agencies related to earnings, deductions and so forth.
E-Procurement generates value by increasing transparency and probity by keeping a traceable electronic record of government transactions online. It contains three key components: information and registration, e-purchasing and e-tendering. The e-procurement initiatives across various countries vary in the extent of computerisation of processes depending upon the need and requirement of governments. The Chilean and Philippine e-procurement systems focus on the first component of adequate public notification and oversight and provide complete information on procurement operations. The Mexican e-procurement system goes one step further and allows bid submission by vendors and reverse auctions. The Korean government has incorporated a comprehensive e-procurement system as one of the pillars of e-government in the country.
The efficiency gains through e-government projects are impressive in terms of cutting the number of steps involved, shrinking the time required, and reducing the number of agencies that need to be consulted.
It is, however, a little odd that, despite so many benefits of e-government, many developing countries do not yet have a comprehensive set of well functioning e-government programs. Of those that do exist, they seem to focus and gyrate around tax collection and procuring goods and services. That is not to say that other types of e-government do not exist; they do, but the emphasis always seems to be on financial benefits.
There is also the problem of access to technology. Information is determined by connectivity, capability and content, with connectivity being the biggest challenge to the development of the information society. The digital divide - the gap between those who have access to technology and those who do not - is growing. Further, the digital divide is no longer merely about the count of haves and have-nots; it is now also about the quality of the access to technology.
Other external factors that impede the development and uptake of e-government are legislative, regulatory, technological and access barriers to name a few.
Regardless of the hurdles and challenges, it is time for Asian countries, including Indonesia, to go beyond basic e-government offerings, where simply publishing basic but perhaps adequate information on the Internet is the norm. Indonesia has now moved into a higher economic gear, where it will be scrutinized for its record on corruption, its business development environment, its regional progress, its existence of robust regulatory frameworks, as well as its citizen inclusion in the process of governance.
The most striking thing about information and communication technology is how pervasive it is. ICT devices have diffused across all aspects of modern life - from our social lives to the daily routine of working life - in Indonesia and around the world. This diffusive nature of ICT has led to the rise of the information society, which has created major changes in public expectations, organizational structures and working processes.
The spread of ICT devices has been remarkable. Given that the Internet did not came into public use until the 1990s, it has totally changed the rules of the game as the corporate world knew it. It has been the most vigorous catalyst of change and has been totally instrumental in creating deep social and organizational changes in a way that is nothing short of a paradigm shift.
The private sector, for instance, which initially championed ICT, delivered the efficiency and value to both the business and the customer. Businesses such as Amazon, eBay and AirAsia are all companies that we or our friends use on a regular basis to buy or sell goods and services online.
There are also many old traditional companies such as Marks & Spencer, British Airways and Walmart that have felt the need to change their business model by making the Internet a core part of their growth strategy. The changes include online shopping or having an integrated supply chain with automated stock inventory.
Other sophisticated business changes that need a mention relate to outsourcing of certain activities. The United States and some European countries have outsourced certain business functions to create efficiency and improve financial value. Variations of the outsourcing ideas have also found a take-up by small professional businesses.
For example, in the United States a doctor might see a patient in the evening and carry out some medical tests that are then sent electronically to a company in a country where it is still a working day. The receiving doctor interprets the results, writes a report and sends it back to the doctor in the United States. In the past, it would have taken days to complete this kind of activity, but now it's over in a few hours. Further, the outsourcing cost and benefit of interpreting the results and typing it up as a finished report within tight deadlines is a lot cheaper and simpler than getting those activities completed in-house. The Indian multinationals Infosys and Wipro have created huge businesses out of leveraging technology, time zone differences and human capital.
The US government, while a late entrant in the utilization of ICT, has become a major user of ICT. Having noticed and learned from the private sector about the value and customer satisfaction that technology can generate it is not difficult to see why the government would have stirred activity surrounding the online provision of government services, sometimes dubbed e-Government.
The key reason for e-Government is the government's need to modernize itself. The e-Government initiatives that most are now pursuing are driven by a desire to reduce transaction costs, raise tax revenue, improve efficiency in service delivery, create an environment of trust and transparency, encourage economic growth and advance any public reform agenda it might have.
Some of the most relevant examples of e-Government initiatives include Bhoomi, a program in the Indian state of Karnataka that is designed to computerize land ownership records. It has proved fairly successful in reducing the corruption inherent in the land acquisition process. Administrative corruption was reduced by taking away the discretion to delay or deny by automating the process, keeping a traceable electronic record of transactions and increasing the accountability of public officials.
Online income tax is being carried out by many countries, including in Asia. Singapore started its program in 1992 by introducing an imaging system to electronically process the paper-based income tax returns filed by the citizens. Over the years, the system has been improved to allow tax returns to be completed over the phone and now over the Internet, the ultimate aim being to link the information in various government agencies related to earnings, deductions and so forth.
E-Procurement generates value by increasing transparency and probity by keeping a traceable electronic record of government transactions online. It contains three key components: information and registration, e-purchasing and e-tendering. The e-procurement initiatives across various countries vary in the extent of computerisation of processes depending upon the need and requirement of governments. The Chilean and Philippine e-procurement systems focus on the first component of adequate public notification and oversight and provide complete information on procurement operations. The Mexican e-procurement system goes one step further and allows bid submission by vendors and reverse auctions. The Korean government has incorporated a comprehensive e-procurement system as one of the pillars of e-government in the country.
The efficiency gains through e-government projects are impressive in terms of cutting the number of steps involved, shrinking the time required, and reducing the number of agencies that need to be consulted.
It is, however, a little odd that, despite so many benefits of e-government, many developing countries do not yet have a comprehensive set of well functioning e-government programs. Of those that do exist, they seem to focus and gyrate around tax collection and procuring goods and services. That is not to say that other types of e-government do not exist; they do, but the emphasis always seems to be on financial benefits.
There is also the problem of access to technology. Information is determined by connectivity, capability and content, with connectivity being the biggest challenge to the development of the information society. The digital divide - the gap between those who have access to technology and those who do not - is growing. Further, the digital divide is no longer merely about the count of haves and have-nots; it is now also about the quality of the access to technology.
Other external factors that impede the development and uptake of e-government are legislative, regulatory, technological and access barriers to name a few.
Regardless of the hurdles and challenges, it is time for Asian countries, including Indonesia, to go beyond basic e-government offerings, where simply publishing basic but perhaps adequate information on the Internet is the norm. Indonesia has now moved into a higher economic gear, where it will be scrutinized for its record on corruption, its business development environment, its regional progress, its existence of robust regulatory frameworks, as well as its citizen inclusion in the process of governance.
US regulator sues major banks over subprime bonds
Express (September 04, 2011)
A US regulator sued 17 large banks and financial institutions Friday over losses on about $200 billion of subprime bonds, which may hamper a broader government settlement of the mortgage mess left over from the housing crisis.
The lawsuits by the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, surprised investors, dragging down bank shares and could add billions of dollars of legal costs at perhaps the worst possible time for the industry.
Friday's lawsuits reflects how different parties, including investors, banks and different government groups are fighting over who should bear losses from a housing crisis that in 2008 drove the economy into its worst recession in decades.
The FHFA accused Bank of America Corp and its Countrywide and Merrill Lynch units, Barclays Plc, Citigroup Inc, Goldman Sachs Group Inc, JPMorgan Chase & Co, Royal Bank of Scotland Group Plc and others of misrepresenting the checks they had done on mortgages before bundling them into securities.
According to the lawsuits, the securities should have never been sold because the underlying mortgages did not meet investors' criteria. As more borrowers fell behind or went into foreclosure, the securities' value fell, causing losses.
Nearly all the banks that were sued declined to comment or were not immediately available for comment. Others called the charges unfounded.
"Fannie Mae and Freddie Mac are the epitome of a sophisticated investor, having issued trillions of dollars of mortgage-backed securities and purchased hundreds of billions of dollars more," said Mayura Hooper, a spokeswoman for defendant Deutsche Bank AG, in a statement.
A Bank of America spokesman said Fannie Mae and Freddie Mac are trying to shift responsibility to banks after earlier blaming losses on other factors. A spokesman for Ally Financial Inc, once known as GMAC, called the FHFA claims "meritless."
Bank of America faces three FHFA lawsuits, covering losses on more than $57 billion of securities. JPMorgan faces claims related to $33 billion of securities and Royal Bank of Scotland was sued over $30.4 billion of securities.
Several large banks are also negotiating with all 50 US state attorneys general on a comprehensive settlement to address mortgage abuses and limit future mortgage litigation.
"This new litigation could disrupt the AG settlement," said Anthony Sanders, finance professor at George Mason University and a former mortgage bond strategist.
Banks might resist settling if they knew litigation from other regulators could deplete capital, he said.
Before the FHFA lawsuits had even hit a court docket, financial experts offered blunt expectations for the outcome.
"The lawsuits will be settled," said Sean Egan, managing director of Egan-Jones Ratings Co, an independent credit ratings firm. "The end result will be a further outflow of cash from the banks, and more importantly an additional black eye."
FHFA director Edward DeMarco is looking to minimize future losses for Fannie Mae and Freddie Mac, which are owned by the government after being seized on Sept 7, 2008.
The FHFA filed the suits before a three-year statute of limitations expired. Fannie Mae and Freddie Mac are pillars of US mortgage finance.
Wells Fargo & Co, the largest US bank not sued by the FHFA, entered a "tolling" agreement waiving its right to claim the FHFA waited too long to sue, a person with knowledge of the matter said.
The bank said Wells Fargo might have done this to give it time negotiate its own settlement, the person added.
FHFA spokeswoman Corinne Russell and Wells Fargo spokeswoman Mary Eshet declined to comment.
The KBW Bank Index closed down 4.5 per cent Friday, nearly doubling the losses of the broader market. Bank of America led the index lower, dropping 8.3 per cent.
Bank shares also came under pressure from signs the Federal Reserve could start selling short-term debt on its books and buy long-dated bonds to push longer-term yields lower.
Such a move, known as "operation twist," would hurt banks whose profit margin is tied to the short-term rates at which they fund and the longer-term rates at which they invest.
Major banks already face potential payouts of tens of billions of dollars to settle regulatory charges of abusive mortgage lending and foreclosure practices, and other investor lawsuits over mortgage debt losses.
Such payouts would reduce earnings and weaken capital levels, perhaps harming the ability of banks to lend money and provide much-needed life to a stalled housing market and weakened economy.
Whether to take action for mortgage bond problems had been under discussion since Fannie Mae and Freddie Mac were placed in conservatorship, a person familiar with the matter said.
While the ultimate amount FHFA will seek is still unclear, that person said it could top the $20 billion settlement being discussed by the banks and the state attorneys general
A US regulator sued 17 large banks and financial institutions Friday over losses on about $200 billion of subprime bonds, which may hamper a broader government settlement of the mortgage mess left over from the housing crisis.
The lawsuits by the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, surprised investors, dragging down bank shares and could add billions of dollars of legal costs at perhaps the worst possible time for the industry.
Friday's lawsuits reflects how different parties, including investors, banks and different government groups are fighting over who should bear losses from a housing crisis that in 2008 drove the economy into its worst recession in decades.
The FHFA accused Bank of America Corp and its Countrywide and Merrill Lynch units, Barclays Plc, Citigroup Inc, Goldman Sachs Group Inc, JPMorgan Chase & Co, Royal Bank of Scotland Group Plc and others of misrepresenting the checks they had done on mortgages before bundling them into securities.
According to the lawsuits, the securities should have never been sold because the underlying mortgages did not meet investors' criteria. As more borrowers fell behind or went into foreclosure, the securities' value fell, causing losses.
Nearly all the banks that were sued declined to comment or were not immediately available for comment. Others called the charges unfounded.
"Fannie Mae and Freddie Mac are the epitome of a sophisticated investor, having issued trillions of dollars of mortgage-backed securities and purchased hundreds of billions of dollars more," said Mayura Hooper, a spokeswoman for defendant Deutsche Bank AG, in a statement.
A Bank of America spokesman said Fannie Mae and Freddie Mac are trying to shift responsibility to banks after earlier blaming losses on other factors. A spokesman for Ally Financial Inc, once known as GMAC, called the FHFA claims "meritless."
Bank of America faces three FHFA lawsuits, covering losses on more than $57 billion of securities. JPMorgan faces claims related to $33 billion of securities and Royal Bank of Scotland was sued over $30.4 billion of securities.
Several large banks are also negotiating with all 50 US state attorneys general on a comprehensive settlement to address mortgage abuses and limit future mortgage litigation.
"This new litigation could disrupt the AG settlement," said Anthony Sanders, finance professor at George Mason University and a former mortgage bond strategist.
Banks might resist settling if they knew litigation from other regulators could deplete capital, he said.
Before the FHFA lawsuits had even hit a court docket, financial experts offered blunt expectations for the outcome.
"The lawsuits will be settled," said Sean Egan, managing director of Egan-Jones Ratings Co, an independent credit ratings firm. "The end result will be a further outflow of cash from the banks, and more importantly an additional black eye."
FHFA director Edward DeMarco is looking to minimize future losses for Fannie Mae and Freddie Mac, which are owned by the government after being seized on Sept 7, 2008.
The FHFA filed the suits before a three-year statute of limitations expired. Fannie Mae and Freddie Mac are pillars of US mortgage finance.
Wells Fargo & Co, the largest US bank not sued by the FHFA, entered a "tolling" agreement waiving its right to claim the FHFA waited too long to sue, a person with knowledge of the matter said.
The bank said Wells Fargo might have done this to give it time negotiate its own settlement, the person added.
FHFA spokeswoman Corinne Russell and Wells Fargo spokeswoman Mary Eshet declined to comment.
The KBW Bank Index closed down 4.5 per cent Friday, nearly doubling the losses of the broader market. Bank of America led the index lower, dropping 8.3 per cent.
Bank shares also came under pressure from signs the Federal Reserve could start selling short-term debt on its books and buy long-dated bonds to push longer-term yields lower.
Such a move, known as "operation twist," would hurt banks whose profit margin is tied to the short-term rates at which they fund and the longer-term rates at which they invest.
Major banks already face potential payouts of tens of billions of dollars to settle regulatory charges of abusive mortgage lending and foreclosure practices, and other investor lawsuits over mortgage debt losses.
Such payouts would reduce earnings and weaken capital levels, perhaps harming the ability of banks to lend money and provide much-needed life to a stalled housing market and weakened economy.
Whether to take action for mortgage bond problems had been under discussion since Fannie Mae and Freddie Mac were placed in conservatorship, a person familiar with the matter said.
While the ultimate amount FHFA will seek is still unclear, that person said it could top the $20 billion settlement being discussed by the banks and the state attorneys general
Bangladesh-China direct shipping link from Sept 9
Express (September 04, 2011)
A Singapore-based carrier will launch a direct shipping link between Bangladesh and China this month, opening up a new vista for trade between the two economies.
The link will cut freight for Bangladeshi traders who import US$7 billion merchandise from the world's second largest economy and help boost export opportunities for local manufacturers seeking new avenues for shipment, experts said.
Pacific International Lines (PIL) starts the "landmark' shipping link on September 9, when its vessel, Kota Wista, will make the first voyage for Chittagong from Chinese commercial capital of Shanghai.
"We're introducing the new route to serve the country's businesses efficiently," said Mohammad Rafiqul Islam, country director of PIL.
"This will save a week for local traders who import most of the country's electronics from China and garment makers who source yarn and fabrics. It will ensure hassle-free cargo movement," he said.
The carrier plans to connect Chittagong with two other southern Chinese ports, Ningbo of Zhejiang province and Nansha of Guangdong -- the global textile, electronics and footwear hub.
Initially, the shipping company will operate two round trips on the route but it plans to launch weekly voyages in a couple of months, its executives said.
"Vessel from China will arrive Chittagong
port each Sunday and leave for China each Wednesday." Mr Rafique said.
Presently, Bangladesh can't ship directly to China or any of its major trade partners such as the European Union nations and the United States.
Vessels carrying goods destined for Bangladesh first disembark in Singapore, Port Klang of Malaysia and Colombo before heading to Chittagong or Mongla.
Similarly, cargoes loaded with Bangladeshi exports have to be reloaded in main line vessels in the three major ports before being shipped to EU, the US and other top markets.
Shipping executives said this process is cumbersome and adds extra-cost to Bangladeshi merchandise. The shipment is delayed for weeks when feeder vessels are in short supply in the three transshipment ports.
In many cases, goods and foodgrains remained stockpiled at the ports for weeks, fuelling inflation at home and spiking freight costs for export cargoes.
Traders and manufacturers now need at least 22-25 days to import goods from China. The direct shipping linkage will cut at least six-seven days and the round trip will take 35 days.
The main line operator will arrive Chittagong via Singapore. It will reach China via Singapore and Thailand as empty containers and Europe-America bound will be unloaded there.
Mr Rafique said the direct link will save at least $120 in freight cost per container for Bangladeshi traders. "There will be no hassles or delays in Singapore or at Port Klang," he said.
China has recent years emerged as the country largest import partner. It accounted for some 21 per cent of the Bangladesh's $33 billion import trade in the year to June 2011.
Bangladesh's major imports from China include electronics, fabrics, non-cotton yarn and accessories, machinery, chemicals, intermediary raw-material, fertilizers, food grains and fruits.
With its economy booming at the breckneck speed, the world's most populous country has also grown to Asia's top shopper. Last year it bought $400 million worth of merchandise from Bangladesh.
China last year overtook India as the biggest buyer of Bangladeshi raw jute and jute yarn. China also imports leather, dehydrated sea fish and apparel from Bangladesh.
A Singapore-based carrier will launch a direct shipping link between Bangladesh and China this month, opening up a new vista for trade between the two economies.
The link will cut freight for Bangladeshi traders who import US$7 billion merchandise from the world's second largest economy and help boost export opportunities for local manufacturers seeking new avenues for shipment, experts said.
Pacific International Lines (PIL) starts the "landmark' shipping link on September 9, when its vessel, Kota Wista, will make the first voyage for Chittagong from Chinese commercial capital of Shanghai.
"We're introducing the new route to serve the country's businesses efficiently," said Mohammad Rafiqul Islam, country director of PIL.
"This will save a week for local traders who import most of the country's electronics from China and garment makers who source yarn and fabrics. It will ensure hassle-free cargo movement," he said.
The carrier plans to connect Chittagong with two other southern Chinese ports, Ningbo of Zhejiang province and Nansha of Guangdong -- the global textile, electronics and footwear hub.
Initially, the shipping company will operate two round trips on the route but it plans to launch weekly voyages in a couple of months, its executives said.
"Vessel from China will arrive Chittagong
port each Sunday and leave for China each Wednesday." Mr Rafique said.
Presently, Bangladesh can't ship directly to China or any of its major trade partners such as the European Union nations and the United States.
Vessels carrying goods destined for Bangladesh first disembark in Singapore, Port Klang of Malaysia and Colombo before heading to Chittagong or Mongla.
Similarly, cargoes loaded with Bangladeshi exports have to be reloaded in main line vessels in the three major ports before being shipped to EU, the US and other top markets.
Shipping executives said this process is cumbersome and adds extra-cost to Bangladeshi merchandise. The shipment is delayed for weeks when feeder vessels are in short supply in the three transshipment ports.
In many cases, goods and foodgrains remained stockpiled at the ports for weeks, fuelling inflation at home and spiking freight costs for export cargoes.
Traders and manufacturers now need at least 22-25 days to import goods from China. The direct shipping linkage will cut at least six-seven days and the round trip will take 35 days.
The main line operator will arrive Chittagong via Singapore. It will reach China via Singapore and Thailand as empty containers and Europe-America bound will be unloaded there.
Mr Rafique said the direct link will save at least $120 in freight cost per container for Bangladeshi traders. "There will be no hassles or delays in Singapore or at Port Klang," he said.
China has recent years emerged as the country largest import partner. It accounted for some 21 per cent of the Bangladesh's $33 billion import trade in the year to June 2011.
Bangladesh's major imports from China include electronics, fabrics, non-cotton yarn and accessories, machinery, chemicals, intermediary raw-material, fertilizers, food grains and fruits.
With its economy booming at the breckneck speed, the world's most populous country has also grown to Asia's top shopper. Last year it bought $400 million worth of merchandise from Bangladesh.
China last year overtook India as the biggest buyer of Bangladeshi raw jute and jute yarn. China also imports leather, dehydrated sea fish and apparel from Bangladesh.
Tuesday, August 30
TV stations gear up for revenue battle
Star (August 30, 2011)
It's that time of the year again, when television channels spare no effort to attract viewers, and revenue as well.
According to advertisers, television channels charge almost double during the Eid festival to cash in on the demand, and Eid advertising accounts for up to 15 percent of the television channels' yearly revenue income.
“Leading TV channels that usually take Tk 40,000 a minute during peak hour, charge as high as Tk 80,000 for the Eid programmes,” said Mostafa Kamal Aru, media manager of TBWA\Benchmark, an ad firm.
State-owned Bangladesh Television, known as BTV, leads the race comfortably with higher demand.
“BTV has increased the advertisement rate by 20 percent during this year's Eid,” said Khitish Paul, associate director of Mindshare, another ad firm.
Generally, BTV takes Tk 100,000-Tk 150,000 for per minute advertisement during normal time and it goes up as high as Tk 300,000 during Eid.
In Bangladesh, there are around 20 television stations of which only BTV is terrestrial. All these channels are now ready to set off their festive programmes for the Eid viewers. Some channels have extended their Eid programmes up to 10 days.
Exclusive TV programmes bring families together, while fast moving consumer goods (FMCG) companies advertise more to create a long-lasting impact.
“There is no off-peak hour during the Eid festival as every company wants to advertise its products to reach the target groups,” said Ashim Kumar Das, marketing manager of NTV, a private satellite channel.
“The rush to gain consumer attention and influence the buying decision is the main drive in the promotional campaigns,” said Paul of Mindshare that works for Unilever, the biggest FMCG company in the country.
Apart from FMCGs, other big advertisers include telecom companies, food, confectionary, soft drinks, juices and electronics .
According to market players, the size of the advertisement and promotional market is estimated at around Tk 1,200 crore annually. Of which, nearly 40 percent goes to the television channels.
It's that time of the year again, when television channels spare no effort to attract viewers, and revenue as well.
According to advertisers, television channels charge almost double during the Eid festival to cash in on the demand, and Eid advertising accounts for up to 15 percent of the television channels' yearly revenue income.
“Leading TV channels that usually take Tk 40,000 a minute during peak hour, charge as high as Tk 80,000 for the Eid programmes,” said Mostafa Kamal Aru, media manager of TBWA\Benchmark, an ad firm.
State-owned Bangladesh Television, known as BTV, leads the race comfortably with higher demand.
“BTV has increased the advertisement rate by 20 percent during this year's Eid,” said Khitish Paul, associate director of Mindshare, another ad firm.
Generally, BTV takes Tk 100,000-Tk 150,000 for per minute advertisement during normal time and it goes up as high as Tk 300,000 during Eid.
In Bangladesh, there are around 20 television stations of which only BTV is terrestrial. All these channels are now ready to set off their festive programmes for the Eid viewers. Some channels have extended their Eid programmes up to 10 days.
Exclusive TV programmes bring families together, while fast moving consumer goods (FMCG) companies advertise more to create a long-lasting impact.
“There is no off-peak hour during the Eid festival as every company wants to advertise its products to reach the target groups,” said Ashim Kumar Das, marketing manager of NTV, a private satellite channel.
“The rush to gain consumer attention and influence the buying decision is the main drive in the promotional campaigns,” said Paul of Mindshare that works for Unilever, the biggest FMCG company in the country.
Apart from FMCGs, other big advertisers include telecom companies, food, confectionary, soft drinks, juices and electronics .
According to market players, the size of the advertisement and promotional market is estimated at around Tk 1,200 crore annually. Of which, nearly 40 percent goes to the television channels.
Central bank move keeps call rate stable
Express (August 30, 2011)
The inter-bank call money rate was stable Monday despite the pressure of withdrawal of cash from banks, ahead of the Eid-ul Fitr festival, treasury officials said.
The call rate ranged between 18.00 per cent and 20.00 per cent on the last working day before the Eid against the previous day's range between 15.00 per cent and 20.00 per cent.
However, most deals were settled at 20.00 per cent, market operators said.
"The call money rate was stable on the day following injection of fresh funds into the market by the central bank," a senior treasury official of a commercial bank told the FE.
He also said the inter-bank borrowings normally increase before the Eid festival to meet the increased demand of the clients of the banks for withdrawal of cash.
In 2010, the call money rate ranged between 4.0 per cent and 7.00 per cent on the last working day before the Eid-ul-Fitr festival, the treasury official added.
Most branches of the banks, especially at Motijheel, Dilkusha and other commercial hubs of the capital, witnessed long queues of people to withdraw money on the day.
The central bank continued to provide liquidity support to the commercial banks to meet higher demand for cash during the holy Ramadan and Eid-ul-Fitr.
As part of the move, the Bangladesh Bank (BB) injected fresh funds worth Tk 78.46 billion at 6.75 per cent Monday through auction of repurchase agreement (repo) and special liquidity support to the primary dealers (PDs).
The central bank earlier selected 15 PDs -- 12 banks and three non-banking financial institutions (NBFIs) -- to deal in government securities in the secondary market.
Besides, the central bank provided Tk 11.20 billion as special repo facility to the banks with the rate of interest ranging between 8.75 per cent and 8.80 per cent.
Last Thursday, the BB injected funds worth Tk 83.43 billion using the same mechanisms, the central bank officials said.
The inter-bank call money rate was stable Monday despite the pressure of withdrawal of cash from banks, ahead of the Eid-ul Fitr festival, treasury officials said.
The call rate ranged between 18.00 per cent and 20.00 per cent on the last working day before the Eid against the previous day's range between 15.00 per cent and 20.00 per cent.
However, most deals were settled at 20.00 per cent, market operators said.
"The call money rate was stable on the day following injection of fresh funds into the market by the central bank," a senior treasury official of a commercial bank told the FE.
He also said the inter-bank borrowings normally increase before the Eid festival to meet the increased demand of the clients of the banks for withdrawal of cash.
In 2010, the call money rate ranged between 4.0 per cent and 7.00 per cent on the last working day before the Eid-ul-Fitr festival, the treasury official added.
Most branches of the banks, especially at Motijheel, Dilkusha and other commercial hubs of the capital, witnessed long queues of people to withdraw money on the day.
The central bank continued to provide liquidity support to the commercial banks to meet higher demand for cash during the holy Ramadan and Eid-ul-Fitr.
As part of the move, the Bangladesh Bank (BB) injected fresh funds worth Tk 78.46 billion at 6.75 per cent Monday through auction of repurchase agreement (repo) and special liquidity support to the primary dealers (PDs).
The central bank earlier selected 15 PDs -- 12 banks and three non-banking financial institutions (NBFIs) -- to deal in government securities in the secondary market.
Besides, the central bank provided Tk 11.20 billion as special repo facility to the banks with the rate of interest ranging between 8.75 per cent and 8.80 per cent.
Last Thursday, the BB injected funds worth Tk 83.43 billion using the same mechanisms, the central bank officials said.
An eight-member Article-4 mission of International Monetary Fund (IMF) will arrive in Dhaka on September 4
Express (August 30, 2011)
An eight-member Article-4 mission of International Monetary Fund (IMF) will arrive in Dhaka on September 4 next on a two-week visit to have an in-depth look at the country's macro-economic fundamentals and the balance of payment (BoP) situation , a high official at the ministry of finance (MoF) has said.
The Extended Credit Facility (ECF) of IMF, under which the government sought $1.0 billion credit, will figure prominently at the discussion to be held between the policy makers and the Fund officials during their stay in the capital, sources said.
Ahead of the visit, the multilateral lending agency has made some queries about the real sectors, public enterprises, monetary and financial issues and the external sector.
After borrowing $490 million from IMF's poverty reduction growth facilities (PRGF) scheme in fiscal 2003-04, the country again sought around $1 billion under ECF arrangement for four years (fiscal 2011-14).
The government agencies concerned are now busy preparing the answers to the IMF's queries, while officials are updating themselves on various macro-economic issues that may come up during the visit of Article-4 mission, a ministry of finance official said.
Under Article-4 of the IMF Articles of agreement, the IMF holds bilateral discussions with member-countries, usually every year. A staff team visits the country, collects economic and financial information, and holds discussion on economic developments and policies with the officials of the country. On return to IMF headquarters, it prepares a report, which forms the basis for discussion by the executive board. At the conclusion of the discussion, the IMF Managing Director, as chairman of the board, summarises the views of the executive directors, and the summary is transmitted to the authorities of the country concerned.
Officials at the MoF said the overall macro-economic situation of the country is good, although the BoP situation has deteriorated. The bank borrowing of the government is increasing alarmingly. According to the latest data, the government borrowed Tk 30 billion during the first one and a half months of the current fiscal year.
"We need support from the IMF to address the BoP crisis," an MoF official said.
"We are hopeful of reaching a consensus with IMF during their upcoming visit on getting $1.0 billion ECF from them," he added.
However, IMF put forward a number of conditions to the government recently to become eligible for the proposed credit, sources said.
The conditions include enactment of new Value Added Tax (VAT) and income tax laws, establishing a monitoring framework for Bangladesh Petroleum Corporation, Bangladesh Chemical Industries Corporation, and Power Division, to set aside funds to cover losses, amendment to the Banking Company Act and phasing out ceiling on bank lending rates.
The IMF team will hold discussion with MoF, Bangladesh Bank, National Board of Revenue and Power Development Board, sources said.
An eight-member Article-4 mission of International Monetary Fund (IMF) will arrive in Dhaka on September 4 next on a two-week visit to have an in-depth look at the country's macro-economic fundamentals and the balance of payment (BoP) situation , a high official at the ministry of finance (MoF) has said.
The Extended Credit Facility (ECF) of IMF, under which the government sought $1.0 billion credit, will figure prominently at the discussion to be held between the policy makers and the Fund officials during their stay in the capital, sources said.
Ahead of the visit, the multilateral lending agency has made some queries about the real sectors, public enterprises, monetary and financial issues and the external sector.
After borrowing $490 million from IMF's poverty reduction growth facilities (PRGF) scheme in fiscal 2003-04, the country again sought around $1 billion under ECF arrangement for four years (fiscal 2011-14).
The government agencies concerned are now busy preparing the answers to the IMF's queries, while officials are updating themselves on various macro-economic issues that may come up during the visit of Article-4 mission, a ministry of finance official said.
Under Article-4 of the IMF Articles of agreement, the IMF holds bilateral discussions with member-countries, usually every year. A staff team visits the country, collects economic and financial information, and holds discussion on economic developments and policies with the officials of the country. On return to IMF headquarters, it prepares a report, which forms the basis for discussion by the executive board. At the conclusion of the discussion, the IMF Managing Director, as chairman of the board, summarises the views of the executive directors, and the summary is transmitted to the authorities of the country concerned.
Officials at the MoF said the overall macro-economic situation of the country is good, although the BoP situation has deteriorated. The bank borrowing of the government is increasing alarmingly. According to the latest data, the government borrowed Tk 30 billion during the first one and a half months of the current fiscal year.
"We need support from the IMF to address the BoP crisis," an MoF official said.
"We are hopeful of reaching a consensus with IMF during their upcoming visit on getting $1.0 billion ECF from them," he added.
However, IMF put forward a number of conditions to the government recently to become eligible for the proposed credit, sources said.
The conditions include enactment of new Value Added Tax (VAT) and income tax laws, establishing a monitoring framework for Bangladesh Petroleum Corporation, Bangladesh Chemical Industries Corporation, and Power Division, to set aside funds to cover losses, amendment to the Banking Company Act and phasing out ceiling on bank lending rates.
The IMF team will hold discussion with MoF, Bangladesh Bank, National Board of Revenue and Power Development Board, sources said.
Monday, August 29
Chartered Financial Analyst programme
Express (August 23, 2011)
The Chartered Financial Analyst (CFA) Institute has recently published the results of the CFA examinations. Twelve candidates from Bangladesh have passed the last (third) level of the examinations and qualified for receiving the CFA Charter. Numerous others have passed the first and second levels of the examinations on their way toward completion of the programme and toward receiving the coveted CFA designation. This is an extraordinary feat and an important achievement, and I will try to explain why.
As the financial services industry gains breadth and depth with the expansion of our economy, we increasingly feel the need for trained professionals. The challenges in this regard are two-fold. First, there is no universal standard to which professionals should be expected to be trained. After all, institutions within the same country differ in their standards and educational philosophies while training professionals. Second, it is a difficult task to train our professionals to attain global standards, especially in a country where education infrastructure is rudimentary at the best, and resources are scarce.
The CFA programme is an excellent solution in both these regards. Primarily aimed at training professionals in the investment management industry, the CFA programme has relevance for every facet of the financial services industry. Some argue that tools taught at the CFA programme are useful in analysing businesses at any role, whether or not it has any relevance to finance.
For those who are not familiar with the CFA programme, excerpts from an article in The Economist may prove helpful (http://www.economist.com/node/11511815). It states "(CFA) is increasingly seen as essential for those trying to get ahead in financial services…Unlike the well-known MBA degree, which usually requires a residential course, CFA students mostly study at home...(a candidate) says he was attracted by both the flexibility and affordability of the course; he receives a grant from his local CFA Institute to help him study…(but) this structure also means candidates need a lot of self-discipline…(another candidate) who is now chief executive of a hedge-fund group, says she studied from 8pm till midnight from three to four days a week with a further five to six hours at weekends…"
In essence, The Chartered Financial Analyst (CFA) designation is an international professional certification offered by the CFA Institute. CFA is a self-study course, deals with a number of study-areas, and is to be taken over a minimum of three years. Candidates pass three rigorous exams (according to The Economist, one of the most arduous tests of their lives) and fulfill relevant experience requirement to receive the CFA charter. Candidates must pass each of three six-hour exams, possess a bachelor's degree from an accredited institution and have 48 months of qualified, professional work experience. Study-areas cover core finance subjects as well as subjects that give a context in investment decision-making (economics, statistics, accounting). Ethics play a significant part not only in the exam syllabus, but throughout the career of a CFA candidate and eventual charter-holder. CFA charter-holders are obligated to adhere to a strict Code of Ethics and Standards governing their professional conduct.
The CFA Institute is a global association of investment professionals that traces its lineage back to the establishment of the Financial Analysts Federation (FAF) in 1947. The economic growth in the USA after World War II led to a rapid and massive growth in individual savings. This further led to an increasing demand for better investment options. The advancement of investment theories in the 1950s and '60s led to further momentum in the industry. This necessitated the formalisation of the investment management profession. Leadership of the FAF established an independent organisation - the Institute of Chartered Financial Analysts (ICFA) - to administer the CFA credentialing programme in 1959; and the ICFA administered the first CFA exams in 1963, when the first charter was awarded. In 1990, the FAF and the ICFA merged to become the Association for Investment Management and Research (AIMR). In 2004, AIMR changed its name to The CFA Institute. The CFA programme began in the United States but has become increasingly international with many people becoming charter-holders across Europe, Asia and Australia. By 2003, fewer than half the candidates in the CFA programme were based in the US and Canada, with most of the other candidates based in Asia or Europe. India and China have shown some of the highest growth from 2005-2006 with increases of 25 per cent and 53 per cent respectively in the total number of charter-holders. As of August 2010, the CFA Institute has more than 101,000 members around the world, including more than 89,000 CFA charter-holders. The roster of CFA charter-holders reads like a who's who in the global financial services industry. Most participants in the programme are employees of the financial services industry.
I now return to the issue of why the CFA programme is relevant for Bangladesh. First, no matter where a candidate resides, they attain the same standard of knowledge. So, a Bangladeshi candidate can achieve the same globally recognised training and credentials as can a student residing in New York, London or Tokyo. Second, the CFA programme is the most affordable among equally prestigious credentials, including an MBA from a top business school. In Bangladesh, few professionals or students can dream of achieving a globally reputed post-graduate education, but the CFA programme is accessible to all. Third, the CFA programme gives an opportunity to non-business students who want to transition into a career in financial services (I come from a background of Electrical Engineering).
Bangladesh has an expanding number of CFA charter-holders (25+) and candidates (over 250). Currently there exists a critical mass of CFA programme participants in Bangladesh and people with this qualification have been advancing to progressively important positions. One of the members of the newly reconstituted SEC is a CFA charter-holder. These professionals have undergone the most rigorous training on the functioning of an efficient capital market, and their views should be consulted in formulating policies, determining the timing and mode of interventions, and deciding on the various essential components of the capital market (including licensing, training, ethics, compliance). One simply needs to view the Facebook and the LinkedIn pages of the Bangladeshi CFA group to understand the knowledge and the refinement of these young professionals, reflected in their posts.
Active institutional participants in the capital markets such as commercial banks, merchant banks, brokerages and asset management companies should encourage their young and talented employees to enroll in the CFA programme and provide them financial support. For them, it would be an important investment in skill-development that is unparalleled in future returns. One last point, while our media regularly transmits "expert" view on the capital market by "analysts", I rarely see a CFA charter-holder consulted at such forums. Our CFA charter-holders are willing, ready and committed to take up their rightful role.
The writer is an investment analyst. A former member of the New York, Stamford and Calgary CFA Societies, he is an active promoter of the CFA group in Bangladesh. He can be reached at email: ahcapcorp@live.com
The Chartered Financial Analyst (CFA) Institute has recently published the results of the CFA examinations. Twelve candidates from Bangladesh have passed the last (third) level of the examinations and qualified for receiving the CFA Charter. Numerous others have passed the first and second levels of the examinations on their way toward completion of the programme and toward receiving the coveted CFA designation. This is an extraordinary feat and an important achievement, and I will try to explain why.
As the financial services industry gains breadth and depth with the expansion of our economy, we increasingly feel the need for trained professionals. The challenges in this regard are two-fold. First, there is no universal standard to which professionals should be expected to be trained. After all, institutions within the same country differ in their standards and educational philosophies while training professionals. Second, it is a difficult task to train our professionals to attain global standards, especially in a country where education infrastructure is rudimentary at the best, and resources are scarce.
The CFA programme is an excellent solution in both these regards. Primarily aimed at training professionals in the investment management industry, the CFA programme has relevance for every facet of the financial services industry. Some argue that tools taught at the CFA programme are useful in analysing businesses at any role, whether or not it has any relevance to finance.
For those who are not familiar with the CFA programme, excerpts from an article in The Economist may prove helpful (http://www.economist.com/node/11511815). It states "(CFA) is increasingly seen as essential for those trying to get ahead in financial services…Unlike the well-known MBA degree, which usually requires a residential course, CFA students mostly study at home...(a candidate) says he was attracted by both the flexibility and affordability of the course; he receives a grant from his local CFA Institute to help him study…(but) this structure also means candidates need a lot of self-discipline…(another candidate) who is now chief executive of a hedge-fund group, says she studied from 8pm till midnight from three to four days a week with a further five to six hours at weekends…"
In essence, The Chartered Financial Analyst (CFA) designation is an international professional certification offered by the CFA Institute. CFA is a self-study course, deals with a number of study-areas, and is to be taken over a minimum of three years. Candidates pass three rigorous exams (according to The Economist, one of the most arduous tests of their lives) and fulfill relevant experience requirement to receive the CFA charter. Candidates must pass each of three six-hour exams, possess a bachelor's degree from an accredited institution and have 48 months of qualified, professional work experience. Study-areas cover core finance subjects as well as subjects that give a context in investment decision-making (economics, statistics, accounting). Ethics play a significant part not only in the exam syllabus, but throughout the career of a CFA candidate and eventual charter-holder. CFA charter-holders are obligated to adhere to a strict Code of Ethics and Standards governing their professional conduct.
The CFA Institute is a global association of investment professionals that traces its lineage back to the establishment of the Financial Analysts Federation (FAF) in 1947. The economic growth in the USA after World War II led to a rapid and massive growth in individual savings. This further led to an increasing demand for better investment options. The advancement of investment theories in the 1950s and '60s led to further momentum in the industry. This necessitated the formalisation of the investment management profession. Leadership of the FAF established an independent organisation - the Institute of Chartered Financial Analysts (ICFA) - to administer the CFA credentialing programme in 1959; and the ICFA administered the first CFA exams in 1963, when the first charter was awarded. In 1990, the FAF and the ICFA merged to become the Association for Investment Management and Research (AIMR). In 2004, AIMR changed its name to The CFA Institute. The CFA programme began in the United States but has become increasingly international with many people becoming charter-holders across Europe, Asia and Australia. By 2003, fewer than half the candidates in the CFA programme were based in the US and Canada, with most of the other candidates based in Asia or Europe. India and China have shown some of the highest growth from 2005-2006 with increases of 25 per cent and 53 per cent respectively in the total number of charter-holders. As of August 2010, the CFA Institute has more than 101,000 members around the world, including more than 89,000 CFA charter-holders. The roster of CFA charter-holders reads like a who's who in the global financial services industry. Most participants in the programme are employees of the financial services industry.
I now return to the issue of why the CFA programme is relevant for Bangladesh. First, no matter where a candidate resides, they attain the same standard of knowledge. So, a Bangladeshi candidate can achieve the same globally recognised training and credentials as can a student residing in New York, London or Tokyo. Second, the CFA programme is the most affordable among equally prestigious credentials, including an MBA from a top business school. In Bangladesh, few professionals or students can dream of achieving a globally reputed post-graduate education, but the CFA programme is accessible to all. Third, the CFA programme gives an opportunity to non-business students who want to transition into a career in financial services (I come from a background of Electrical Engineering).
Bangladesh has an expanding number of CFA charter-holders (25+) and candidates (over 250). Currently there exists a critical mass of CFA programme participants in Bangladesh and people with this qualification have been advancing to progressively important positions. One of the members of the newly reconstituted SEC is a CFA charter-holder. These professionals have undergone the most rigorous training on the functioning of an efficient capital market, and their views should be consulted in formulating policies, determining the timing and mode of interventions, and deciding on the various essential components of the capital market (including licensing, training, ethics, compliance). One simply needs to view the Facebook and the LinkedIn pages of the Bangladeshi CFA group to understand the knowledge and the refinement of these young professionals, reflected in their posts.
Active institutional participants in the capital markets such as commercial banks, merchant banks, brokerages and asset management companies should encourage their young and talented employees to enroll in the CFA programme and provide them financial support. For them, it would be an important investment in skill-development that is unparalleled in future returns. One last point, while our media regularly transmits "expert" view on the capital market by "analysts", I rarely see a CFA charter-holder consulted at such forums. Our CFA charter-holders are willing, ready and committed to take up their rightful role.
The writer is an investment analyst. A former member of the New York, Stamford and Calgary CFA Societies, he is an active promoter of the CFA group in Bangladesh. He can be reached at email: ahcapcorp@live.com
Importance of proper portfolio management in an unstable capital market
Express (August 29, 2011)
Portfolio management is the most scientific concept that is conventionally used to assist, guide, analyse and manage investment in capital market. It helps the investors, by identifying the threats and opportunities, the strengths and weaknesses as well as the risks and rewards of investments. Through its proper uses, the investors decide to buy or sell, or buy or hold investments in shares, stocks, bonds, mutual funds, treasury bonds and on and on, either in domestic or international markets, if doing so in the latter is allowed.
The portfolio managers are generally engaged with portfolio management and they apply all the arts, practices, procedures and techniques for portfolio management. They are entrusted with the important and sensitive tasks of taking timely decisions on investments with the sole motive of maximising the possible returns within a minimum period of time.
Portfolio managers are supported by a team of experts like financial analysts and market researchers who analyse the trends and volatility of the markets. It is an important task of the portfolio management to have a clear idea of the day-to-day and the latest information about capital markets, to collect all relevant data from the stock broker-houses, and also to keep track on reports appearing in various journals and newspapers, besides talking to the managers of different publicly trading companies and monitoring economic growth of different industries.
The portfolio managers make consistent and fruitful decisions about an investment by considering an investment-mix policy -- matching investments to objectives, balancing risks against performance, and making asset allocation for individual or institutional investors. They are responsible for establishing an investment strategy, after taking into consideration the information and data available, selecting appropriate investments and allocating fund for each investment or putting the investment in asset management vehicle.
Generally when the investors decide to buy or sell shares either from the primary market or from the secondary market, they consider the changes in turnover, price/earning (P/E) ratio, earning per share (EPS), net assets value (NAV), capital gains and losses, trends about dividend payment, status and structure of shareholders and paid-up capital. But the investors need to follow the prudent and scientific portfolio management theorem, to consider other theories, practices, rules and formulas on investment in capital markets. There are many tested theorems on portfolio management such as buy-hold rebalancing, constant-mix investments, returns in trending markets, diversification, spread-the-wealth in domestic and international capital markets, follow-up index of stocks, bonds, mutual funds and on and on.
Portfolio management involves risks management; hence, the portfolio managers must be cautious, knowledgeable, prudent, dynamic and well-conversant with the capital market. According to Candy Schwab and Dr Charles B Schwab, ten actions are designed to clear out the deadweight in the portfolios, your office and your mind to clear the way of better returns, These are summarized as: (1) having an investment plan that is realistic and actionable, is crucial to meeting goals, (2) understanding your plan, following and adjusting it when things change in your life, (3) saving and spending rates have the greatest impact on success and choosing only the good positions and avoiding the bad ones, (4) diversification is the second most important factor in reaching goals, (5) selecting asset allocation that is right for you and sticking with it, (6) choosing professionally managed investments can be better way to invest, (7) acting now generally beats waiting, (8) making periodic checkups to keep a portfolio healthy, (9) making progress towards goals is more important than short-term performance and (10) using the right benchmarks to evaluate performance.
There are many time-tested Modern Portfolio Theorems (MPT), dealing with the portfolio management. One of such theorems is about diversifying the investments into different segments of investments such as socks, bonds, mutual funds of different companies and reducing the risks on investments. MPT quantifies the benefits of diversification; this is also commonly known as "don't put all of your eggs in one basket".
Here are five filters a portfolio manager can use to come up with a selection universe of higher quality companies: (1) credit rating report (with minimum B+ scoring), (2) history of profitability, (3) history of regular dividend payments, (4) a reasonable price index and (5) regular reports from stock exchanges (relating to market status, new highs vs. new lows, share index, daily and weekly turnover).
The Bangladesh capital market is still weak and instable. It needs to be further strengthened and stabilized. The investors should follow the portfolio management theorems, factors and formulas, while investing in shares or bonds, irrespective of types and the size of investment. The fluctuations in the capital market are generally based on some specific information about the shares, bonds, securities etc., and the changes happen about the share market indices in both developed and developing countries. The difference is that the information and rumours are found to be true and based on facts in the developed countries but in the developing countries, the information is found to be fabricated and very often not based on facts. Any kind of publicity about the capital market or any sort of comments by responsible ministers affects the capital market. It is advisable for all concerned to refrain themselves from making any comment on the capital market until and unless he/she can add or contribute something special to it. Unwanted and undesirable comments on the capital market are likely to cause a great many problems in the market.
It is very difficult to get correct information about the capital market, especially in a developing country like Bangladesh due to unreliable and incorrect sources of information. The investors, for example, analyse the balance-sheet and income statement of an organization to calculate NAV, EPS, net profit/loss, current ratio, liquidity ratio, leverage ratio and so on. The credit rating companies take the audited balance and income statement as an important piece of document to give their opinions about the credit worthiness of an organisation, in addition to other areas of information. The Security Exchange Commission (SEC) also takes the audited balance sheet and income statement as a very relevant document before according its approval for issuance of shares, bonds and mutual funds.
It is evident that the audited balance-sheet and income statement of an organisation is the most important document used by the portfolio managers, credit rating companies, the regulator (SEC), the stock exchanges, and the brokerage houses to make strategic decisions having a bearing on investments in the capital market.
But unfortunately, we find the audited balance-sheets and income statements, in many cases, are based on fabricated facts and figures. This implies that they are "window-dressed balance-sheets and income statements". Lack of professionalism, transparency and genuineness and absence of up-to-date information are the main constraints to getting correct and true information from a company and to express true and fair view about its state of affairs.
Portfolio management shows the pros and cons, strengths and weaknesses in depth of investments to the investors, the regulator, and financial institutions and to the government so that they can take appropriate actions to correct the situation and help stabilise the capital market. All concerned agencies should follow the portfolio management principles, theories, formulas and analyses while making decisions on buying or selling shares and bonds.
If investments are made on the basis of such exercises having been made properly beforehand, there will obviously be less possibility for losing money in the capital market. This will, in turn, contribute to investors gaining more confidence. More fund will then be injected to the capital market, ultimately stabilizing and strengthening the market itself.
Portfolio management is the most scientific concept that is conventionally used to assist, guide, analyse and manage investment in capital market. It helps the investors, by identifying the threats and opportunities, the strengths and weaknesses as well as the risks and rewards of investments. Through its proper uses, the investors decide to buy or sell, or buy or hold investments in shares, stocks, bonds, mutual funds, treasury bonds and on and on, either in domestic or international markets, if doing so in the latter is allowed.
The portfolio managers are generally engaged with portfolio management and they apply all the arts, practices, procedures and techniques for portfolio management. They are entrusted with the important and sensitive tasks of taking timely decisions on investments with the sole motive of maximising the possible returns within a minimum period of time.
Portfolio managers are supported by a team of experts like financial analysts and market researchers who analyse the trends and volatility of the markets. It is an important task of the portfolio management to have a clear idea of the day-to-day and the latest information about capital markets, to collect all relevant data from the stock broker-houses, and also to keep track on reports appearing in various journals and newspapers, besides talking to the managers of different publicly trading companies and monitoring economic growth of different industries.
The portfolio managers make consistent and fruitful decisions about an investment by considering an investment-mix policy -- matching investments to objectives, balancing risks against performance, and making asset allocation for individual or institutional investors. They are responsible for establishing an investment strategy, after taking into consideration the information and data available, selecting appropriate investments and allocating fund for each investment or putting the investment in asset management vehicle.
Generally when the investors decide to buy or sell shares either from the primary market or from the secondary market, they consider the changes in turnover, price/earning (P/E) ratio, earning per share (EPS), net assets value (NAV), capital gains and losses, trends about dividend payment, status and structure of shareholders and paid-up capital. But the investors need to follow the prudent and scientific portfolio management theorem, to consider other theories, practices, rules and formulas on investment in capital markets. There are many tested theorems on portfolio management such as buy-hold rebalancing, constant-mix investments, returns in trending markets, diversification, spread-the-wealth in domestic and international capital markets, follow-up index of stocks, bonds, mutual funds and on and on.
Portfolio management involves risks management; hence, the portfolio managers must be cautious, knowledgeable, prudent, dynamic and well-conversant with the capital market. According to Candy Schwab and Dr Charles B Schwab, ten actions are designed to clear out the deadweight in the portfolios, your office and your mind to clear the way of better returns, These are summarized as: (1) having an investment plan that is realistic and actionable, is crucial to meeting goals, (2) understanding your plan, following and adjusting it when things change in your life, (3) saving and spending rates have the greatest impact on success and choosing only the good positions and avoiding the bad ones, (4) diversification is the second most important factor in reaching goals, (5) selecting asset allocation that is right for you and sticking with it, (6) choosing professionally managed investments can be better way to invest, (7) acting now generally beats waiting, (8) making periodic checkups to keep a portfolio healthy, (9) making progress towards goals is more important than short-term performance and (10) using the right benchmarks to evaluate performance.
There are many time-tested Modern Portfolio Theorems (MPT), dealing with the portfolio management. One of such theorems is about diversifying the investments into different segments of investments such as socks, bonds, mutual funds of different companies and reducing the risks on investments. MPT quantifies the benefits of diversification; this is also commonly known as "don't put all of your eggs in one basket".
Here are five filters a portfolio manager can use to come up with a selection universe of higher quality companies: (1) credit rating report (with minimum B+ scoring), (2) history of profitability, (3) history of regular dividend payments, (4) a reasonable price index and (5) regular reports from stock exchanges (relating to market status, new highs vs. new lows, share index, daily and weekly turnover).
The Bangladesh capital market is still weak and instable. It needs to be further strengthened and stabilized. The investors should follow the portfolio management theorems, factors and formulas, while investing in shares or bonds, irrespective of types and the size of investment. The fluctuations in the capital market are generally based on some specific information about the shares, bonds, securities etc., and the changes happen about the share market indices in both developed and developing countries. The difference is that the information and rumours are found to be true and based on facts in the developed countries but in the developing countries, the information is found to be fabricated and very often not based on facts. Any kind of publicity about the capital market or any sort of comments by responsible ministers affects the capital market. It is advisable for all concerned to refrain themselves from making any comment on the capital market until and unless he/she can add or contribute something special to it. Unwanted and undesirable comments on the capital market are likely to cause a great many problems in the market.
It is very difficult to get correct information about the capital market, especially in a developing country like Bangladesh due to unreliable and incorrect sources of information. The investors, for example, analyse the balance-sheet and income statement of an organization to calculate NAV, EPS, net profit/loss, current ratio, liquidity ratio, leverage ratio and so on. The credit rating companies take the audited balance and income statement as an important piece of document to give their opinions about the credit worthiness of an organisation, in addition to other areas of information. The Security Exchange Commission (SEC) also takes the audited balance sheet and income statement as a very relevant document before according its approval for issuance of shares, bonds and mutual funds.
It is evident that the audited balance-sheet and income statement of an organisation is the most important document used by the portfolio managers, credit rating companies, the regulator (SEC), the stock exchanges, and the brokerage houses to make strategic decisions having a bearing on investments in the capital market.
But unfortunately, we find the audited balance-sheets and income statements, in many cases, are based on fabricated facts and figures. This implies that they are "window-dressed balance-sheets and income statements". Lack of professionalism, transparency and genuineness and absence of up-to-date information are the main constraints to getting correct and true information from a company and to express true and fair view about its state of affairs.
Portfolio management shows the pros and cons, strengths and weaknesses in depth of investments to the investors, the regulator, and financial institutions and to the government so that they can take appropriate actions to correct the situation and help stabilise the capital market. All concerned agencies should follow the portfolio management principles, theories, formulas and analyses while making decisions on buying or selling shares and bonds.
If investments are made on the basis of such exercises having been made properly beforehand, there will obviously be less possibility for losing money in the capital market. This will, in turn, contribute to investors gaining more confidence. More fund will then be injected to the capital market, ultimately stabilizing and strengthening the market itself.
Number of BO accounts down further
Express (August 29, 2011)
The number of beneficiary owner's (BO) accounts continued to decline as stock market investors closed 3, 53,077 BO accounts in the last two months mainly due to fresh volatility, lack of IPOs and higher renewal fees.
According to data from the Central Depository Bangladesh Limited, the number of active BO accounts dropped to 27, 56,640 as on August 26 from that of 31, 09,717 on June 30.
A stock broker said that due to fresh volatility in the market, lack of initial public offerings (IPOs) and higher renewal fees for maintaining BO accounts are the major causes for declining BO accounts.
The benchmark general index of the DSE rose sharply and fell again during the period as the capital market went through a fresh volatility. The DGEN reached to 6,710 points on July 24 from 6,117 points on June 30, but as of August 25 the index again settled down to 6,212.
Turnover of the premier bourse also posted a record high of the year at the same time of Tk 19.57 billion on July 24 which was Tk 9.54 billion on June 30, but dropped to Tk 5.45 billion on August 25.
Capital market analyst Akter H Sannamat said, "The existing investors perhaps lost interest to pay renewal fees following recent downtrend of the market and most of the BO accounts were closed due to non-payment of renewal fees in recent times as June was the year ending."
Mr Sannamat also said that the fresh volatility in the market and lack of floating fresh IPOs also discouraged new investors in opening new accounts.
Mr Sannamat said that many new investors had bitter experience to the recent market crash and they are not interested to come back as a result they closed their BO accounts.
"Many potential investors who maintained 5-6 BO accounts earlier now maintain one or two accounts, as a result total BO accounts declined substantially," said Mr Sannamat.
He said that usually more than half of the BO accounts are opened to subscribe primary shares and these accounts remain idle for most part of the year.
However, he said "If fresh IPOs hit the market, the number of BO accounts would increase again as many of them will open BO accounts.
In 2009-2010, a total of 11,60,674 BO accounts were opened, posting a 82.83 per cent year-on-year growth, and the number of BO account holders was 14,01,165 at the end of 2008-2009, compared to 10,71,252 on June 30, 2008. The number of BO accounts was 25, 61,839 on June 30, 2010.
Although the growth in opening of BO accounts was high in the first half of last fiscal year, a prolonged bear run in mid December 2010 to June 2011 and lack of IPOs discouraged many potential investors in opening BO accounts, while many investors even closed their accounts.
The number of BO accounts reached around 32, 60,000 in December 2010 as many people rushed to open accounts with different brokerage houses lured by the booming share market.
The investors had continued to open BO accounts heavily till April 2011, despite massive slides in share prices from December to March, with the number of BO accounts reaching around 34, 00,000.
Professor Mahmood Osman Imam, a finance teacher at the Dhaka University and capital market expert said "Mainly who maintained 5-6 BO accounts and applied for IPOs felt discouraged to continue their accounts as IPO floatations remain almost stuck."
"The recent volatility of the stock market, lack of IPOs and higher renewal fees promoted many potential investors to close their BO accounts," he said.
A stock broker said that the investors seemed to lose interest in opening BO accounts when around three to four lakh BO accounts were closed as investors did not renew their accounts.
He said the high renewal cost of Tk 500 for BO accounts also discouraged the primary investors from maintaining the accounts as many investors maintained 5-6 BO accounts.
"The SEC has imposed an additional Tk 200 from Tk 300 in annual maintenance fee on each BO account from July 2010, which was also discourage many potential investors to open new BO accounts while many of them closed their accounts for higher renewal charge," he added.
At present a prospective investor has to pay up to Tk 1,200 to open a BO account.
The number of beneficiary owner's (BO) accounts continued to decline as stock market investors closed 3, 53,077 BO accounts in the last two months mainly due to fresh volatility, lack of IPOs and higher renewal fees.
According to data from the Central Depository Bangladesh Limited, the number of active BO accounts dropped to 27, 56,640 as on August 26 from that of 31, 09,717 on June 30.
A stock broker said that due to fresh volatility in the market, lack of initial public offerings (IPOs) and higher renewal fees for maintaining BO accounts are the major causes for declining BO accounts.
The benchmark general index of the DSE rose sharply and fell again during the period as the capital market went through a fresh volatility. The DGEN reached to 6,710 points on July 24 from 6,117 points on June 30, but as of August 25 the index again settled down to 6,212.
Turnover of the premier bourse also posted a record high of the year at the same time of Tk 19.57 billion on July 24 which was Tk 9.54 billion on June 30, but dropped to Tk 5.45 billion on August 25.
Capital market analyst Akter H Sannamat said, "The existing investors perhaps lost interest to pay renewal fees following recent downtrend of the market and most of the BO accounts were closed due to non-payment of renewal fees in recent times as June was the year ending."
Mr Sannamat also said that the fresh volatility in the market and lack of floating fresh IPOs also discouraged new investors in opening new accounts.
Mr Sannamat said that many new investors had bitter experience to the recent market crash and they are not interested to come back as a result they closed their BO accounts.
"Many potential investors who maintained 5-6 BO accounts earlier now maintain one or two accounts, as a result total BO accounts declined substantially," said Mr Sannamat.
He said that usually more than half of the BO accounts are opened to subscribe primary shares and these accounts remain idle for most part of the year.
However, he said "If fresh IPOs hit the market, the number of BO accounts would increase again as many of them will open BO accounts.
In 2009-2010, a total of 11,60,674 BO accounts were opened, posting a 82.83 per cent year-on-year growth, and the number of BO account holders was 14,01,165 at the end of 2008-2009, compared to 10,71,252 on June 30, 2008. The number of BO accounts was 25, 61,839 on June 30, 2010.
Although the growth in opening of BO accounts was high in the first half of last fiscal year, a prolonged bear run in mid December 2010 to June 2011 and lack of IPOs discouraged many potential investors in opening BO accounts, while many investors even closed their accounts.
The number of BO accounts reached around 32, 60,000 in December 2010 as many people rushed to open accounts with different brokerage houses lured by the booming share market.
The investors had continued to open BO accounts heavily till April 2011, despite massive slides in share prices from December to March, with the number of BO accounts reaching around 34, 00,000.
Professor Mahmood Osman Imam, a finance teacher at the Dhaka University and capital market expert said "Mainly who maintained 5-6 BO accounts and applied for IPOs felt discouraged to continue their accounts as IPO floatations remain almost stuck."
"The recent volatility of the stock market, lack of IPOs and higher renewal fees promoted many potential investors to close their BO accounts," he said.
A stock broker said that the investors seemed to lose interest in opening BO accounts when around three to four lakh BO accounts were closed as investors did not renew their accounts.
He said the high renewal cost of Tk 500 for BO accounts also discouraged the primary investors from maintaining the accounts as many investors maintained 5-6 BO accounts.
"The SEC has imposed an additional Tk 200 from Tk 300 in annual maintenance fee on each BO account from July 2010, which was also discourage many potential investors to open new BO accounts while many of them closed their accounts for higher renewal charge," he added.
At present a prospective investor has to pay up to Tk 1,200 to open a BO account.
The Best Designation For Your Financial Education: CFA, MBA Or Both?
Pedia (January 25, 2011)
Additional education after college has become a prerequisite for career advancement in many investment fields. For those considering a career in investments, the great debate has been whether to obtain a Master of Business Administration (MBA) or The CFA Institute's Chartered Financial Analyst (CFA) designation. Both have their advantages but considering the expense of the former and the difficulty of attaining the latter, choosing between the two makes for a rather difficult decision. To attract students, graduate institutions have begun to teach a large portion of the CFA program within the graduate business curriculum and some have gone as far as to create a "CFA track" within their MBA course of study, allowing students to obtain an MBA and a CFA at the same time. For those considering attaining both a graduate degree and the CFA certification, one of these programs is the most efficient way to get the best of both worlds. (For background reading, check out So, You Want To Earn Your CFA?)
TUTORIAL: Student Loans
MBA Vs. CFABefore the advent of the CFA, many investment companies would pay to send some of their best and brightest to business schools. These students would return with a much better general business skill, but not necessarily the skills needed for high-level, specialized asset-management responsibilities, such as portfolio management. These specialized skills were usually obtained on the job as professionals worked their way up through the ranks. To generalize, the skills obtained in business school were better suited for employees in more general disciplines, such as marketing or general management. The CFA program was devised to provide charter holders with specialized skills, such as investment analysis, portfolio strategy and asset allocation. One way to explain the differences in the programs is to say that the MBA program is a mile wide and a foot deep, while the CFA program is a foot wide and a mile deep. (To learn more about this designation, read What Does "CFA" Mean?)
The advantage of an MBA is that the knowledge obtained in the program is valuable in other industries outside of the investment world. The great disadvantage is cost - both the direct cost of the program and the loss of income that results from a two-year hiatus for those considering going back to school full-time. The advantages of the CFA program are the ability to acquire specific investment related skills at a relatively low cost. However, although the CFA program is based on self study, it is arduous, requiring a commitment of four years and 1,000 study hours (on average) to complete it. Because of the commitments both in time and money, few go on to acquire both the graduate degree and the certification. (For other program requirements see articles Pass Your CFA Exams The First Time and Prepare For Your CFA Exams.)
The CFA TrackFor many willing to make the commitment and meet the other prerequisites necessary to obtain a graduate business degree and the CFA, most will begin the CFA program right after graduation, hoping to use some of the knowledge gained in their finance courses to give them a leg up over other CFA candidates. However, until recently, most graduate business programs did not organize their finance curricula for this purpose, the advantage for graduates was minimal. This is changing, as business schools begin to incorporate CFA course work into their class offerings.
According to the CFA Institute, in April of 2006, the CFA Institute began a partnering program with 41 graduate institutions worldwide to provide some level (at least 70%) of CFA course work as part of the MBA curriculum.The CFA Institute audits the course offerings of these partner institutions to ensure they live up to their promises. To attract students, graduate institutions have begun to teach a large portion of the CFA program within their graduate business curricula. (Do you need an MBA to stay competitive? Find out more by reading Should You Head Back To Business School?)
The curriculum offered by these program partner schools range from specialized finance courses aimed to facilitate the CFA exams, to a specific "CFA track," which includes courses that teach the exam material. The CFA track usually is designed so that students will take Level I of the CFA exam directly after graduation. Boston University's Master of Science in Investment Management program was the first CFA Program Partner in the United States. Although it does not expect it students to take the exam after graduation, its course offerings include equity analysis, portfolio allocation, risk management and performance measurement. This closely mirrors the study guide for the CFA exams. According to BU, the program also provides the background necessary for preparing for the CFA exams. In comparison, the Johnson School at Cornell University seems to be organized with the CFA as one of the end goals of its graduate degree. Johnson School provides CFA Institute study materials, scholarships to waive the registration portion of the CFA exam enrollment fee, and professional development events held in conjunction with CFA Institute member societies.
The Bottom Line
Due to the program partnerships between business schools and the CFA Institute, there is now an efficient means for investment professionals to obtain both a graduate business degree and a CFA. Whereas it used to be adequate to obtain one or the other, this trend and the number of new investment professionals acquiring both graduate degrees and the CFA may ultimately require professionals to obtain both. Where the commitment was once two years of graduate school and four years of self study, now candidates that choose a partnering institution can perform a majority of the CFA commitment within their graduate school course work. Although it will still require an immense amount of commitment and discipline, an increasing number of institutions allow investment professionals to gain both breadth and depth of knowledge for all the investment management disciplines.
TUTORIAL: Student Loans
MBA Vs. CFABefore the advent of the CFA, many investment companies would pay to send some of their best and brightest to business schools. These students would return with a much better general business skill, but not necessarily the skills needed for high-level, specialized asset-management responsibilities, such as portfolio management. These specialized skills were usually obtained on the job as professionals worked their way up through the ranks. To generalize, the skills obtained in business school were better suited for employees in more general disciplines, such as marketing or general management. The CFA program was devised to provide charter holders with specialized skills, such as investment analysis, portfolio strategy and asset allocation. One way to explain the differences in the programs is to say that the MBA program is a mile wide and a foot deep, while the CFA program is a foot wide and a mile deep. (To learn more about this designation, read What Does "CFA" Mean?)
The advantage of an MBA is that the knowledge obtained in the program is valuable in other industries outside of the investment world. The great disadvantage is cost - both the direct cost of the program and the loss of income that results from a two-year hiatus for those considering going back to school full-time. The advantages of the CFA program are the ability to acquire specific investment related skills at a relatively low cost. However, although the CFA program is based on self study, it is arduous, requiring a commitment of four years and 1,000 study hours (on average) to complete it. Because of the commitments both in time and money, few go on to acquire both the graduate degree and the certification. (For other program requirements see articles Pass Your CFA Exams The First Time and Prepare For Your CFA Exams.)
The CFA TrackFor many willing to make the commitment and meet the other prerequisites necessary to obtain a graduate business degree and the CFA, most will begin the CFA program right after graduation, hoping to use some of the knowledge gained in their finance courses to give them a leg up over other CFA candidates. However, until recently, most graduate business programs did not organize their finance curricula for this purpose, the advantage for graduates was minimal. This is changing, as business schools begin to incorporate CFA course work into their class offerings.
According to the CFA Institute, in April of 2006, the CFA Institute began a partnering program with 41 graduate institutions worldwide to provide some level (at least 70%) of CFA course work as part of the MBA curriculum.The CFA Institute audits the course offerings of these partner institutions to ensure they live up to their promises. To attract students, graduate institutions have begun to teach a large portion of the CFA program within their graduate business curricula. (Do you need an MBA to stay competitive? Find out more by reading Should You Head Back To Business School?)
The curriculum offered by these program partner schools range from specialized finance courses aimed to facilitate the CFA exams, to a specific "CFA track," which includes courses that teach the exam material. The CFA track usually is designed so that students will take Level I of the CFA exam directly after graduation. Boston University's Master of Science in Investment Management program was the first CFA Program Partner in the United States. Although it does not expect it students to take the exam after graduation, its course offerings include equity analysis, portfolio allocation, risk management and performance measurement. This closely mirrors the study guide for the CFA exams. According to BU, the program also provides the background necessary for preparing for the CFA exams. In comparison, the Johnson School at Cornell University seems to be organized with the CFA as one of the end goals of its graduate degree. Johnson School provides CFA Institute study materials, scholarships to waive the registration portion of the CFA exam enrollment fee, and professional development events held in conjunction with CFA Institute member societies.
The Bottom Line
Due to the program partnerships between business schools and the CFA Institute, there is now an efficient means for investment professionals to obtain both a graduate business degree and a CFA. Whereas it used to be adequate to obtain one or the other, this trend and the number of new investment professionals acquiring both graduate degrees and the CFA may ultimately require professionals to obtain both. Where the commitment was once two years of graduate school and four years of self study, now candidates that choose a partnering institution can perform a majority of the CFA commitment within their graduate school course work. Although it will still require an immense amount of commitment and discipline, an increasing number of institutions allow investment professionals to gain both breadth and depth of knowledge for all the investment management disciplines.
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