e_Paper (11 November 2016)

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DT 12 Business FRIDAY, NOVEMBER 11, 2016 TOP STORIES Investors exuberant as Donald Trump signals shift from austerity era European stocks rose yesterday following extraordinary gains in Asia and the United States, as exuberance shot through markets and reversed initial dives in reaction to Donald Trump’s US presidential victory. PAGE 13 Japan lawmakers approve TPP despite Trump victory Japan’s lower house of parliament yesterday passed the contentious Trans-Pacific Partnership (TPP) free trade deal, a move largely viewed as an empty gesture due to opposition by US president-elect Donald Trump. PAGE 14 Economists see pain, then gain for India after bank note shock India’s shock move to take larger bank notes out of circulation will hit Asia’s third-largest economy in the short term, but pain will turn to longer-term gains including transparency, higher tax revenues and lower inflation, economists said. PAGE 15 Capital market snapshot: Thursday DSE Broad Index 4,677.1 0.1% ▲ Index 1,122.5 0.1% ▲ 30 Index 1,758.2 0.1% ▲ Turnover in Mn Tk 6,459.6 16.4% ▲ Turnover in Mn Vol 138.6 3.3% ▲ CSE All Share Index 14,387.6 0.1% ▲ 30 Index 12,978.8 0.3% ▲ Selected Index 8,753.0 0.1% ▲ Turnover in Mn Tk 330.0 -19.8% ▼ Turnover in Mn Vol 8.6 -23.0% ▼ Inflation edges up to 5.57% in October • Tribune Business Desk Inflation in Bangladesh rose to 5.57% last month driven by the higher prices of food, government data showed yesterday. It was slightly up from 5.53% read in the previous month. According to Bangladesh Bureau of Statistics (BBS), food inflation, which is more important in developing countries like Bangladesh, where a large amount of household incomes are spent on food, slightly increased to 5.56% in October from 5.10% in September. Non-food inflation, however, decreased to 5.58% from 6.19% during the period. While releasing data at the NEC conference room, Planning Minister AHM Mustafa Kamal said: “Higher food prices, particularly INFLATION RATE FROM APRIL TO OCTOBER THIS YEAR ( IN%) April 5.61 May 5.45 June 5.53 July 5.40 August 5.37 September 5.53 October 5.57 Source: BBS rice, vegetables, salt, oil, sugar and milk, pushed up inflation.” He, however, said food inflation in October last year was a bit higher as it was 6.19%. The government fixed the target to contain inflation at 5.8% for the fiscal year 2016-17. In rural areas, the inflation rate in October was 4.87%, which was 4.63% in September, and in urban areas, it declined to 6.87% from 7.21%. In rural areas, food inflation moved up 4.89% from 4.27%, and in urban areas, it climbed to 7.9% from 7.3% during the period. In case of non-food inflation, it was down 4.23% from 5.31% in rural areas, while it fell 6.63% from 7.42% in urban areas. The point-to-point national wage index witnessed an increasing trend with 6.16% in October, up from 6.09% in September. The average year-on-year rate of inflation from November 2015 to October 2016 also declined to 5.66%, which was 6.21% from November 2014 to October 2015. • Muhith urges businessmen to accept new VAT law Finance Minister AMA Muhith launches Tax Guide at a programme in the ministry auditorium in the city yesterday ASIF SHOWKAT KALLOL • Asif Showkat Kallol Finance Minister AMA Muhith said the country’s value-added tax is “reasonable” and so the businessmen shouldn’t object to it. “The old Dhaka businessmen are against introducing the new VAT law, but I want to tell them that the new uniform VAT rate is reasonable,” he said while launching Tax Guide at the finance ministry’s auditorium yesterday. Muhith, however, said the rate would be reduced if the amount of VAT increased annually. He said Bangladesh is one of the pioneer countries to introduce such a VAT law. Muhith ruled out the possibility of double taxation. “If this happens, this is wrong calculation.” He insisted uniform 15% VAT rate will be good for the business. Earlier this month shop keepers in Dhaka protested against the new VAT law keeping their shops closed and organising rallies. “I was actually disappointed at the strike. They (businessmen) shouldn’t go for it again,” finance minister said. He said the VAT law was first introduced in France and later in the United Kingdom, and the VAT rate varies from 5% to 20% in different countries. Muhith said he would lower the country’s VAT rate if the number of taxpayers become 50,000. “I would promise to lower the rate of VAT. I said the first time we have a uniform rate of 15% but if you want I will change that rate.” At present, the number of registered businessmen taxpayers are 7.7m businessmen, but only 1.1m of them pay VAT. Muhith said the government would procure 20,000 electronic cash register machines from aboard and supply to the businessmen at import price. • Ecnec okays projects worth over Tk9,600cr • Tribune Business Desk Executive Committee of the National Economic Council (Ecnec) yesterday approved 12 projects worth nearly Tk9,664 crore mainly related to river route development, power transmission and road communication works. The approval came at the Ecnec meeting with Prime Minister Sheikh Hasina in the chair at the NEC conference in the city yesterday. Following the meeting, Planning Minister AHM Mustafa Kamal disclosed the meeting outcome. Of the approved project costs, Tk4,255.38 crore will come from public coffer, Tk533.08 crore from the project-related public agencies’ own fund and Tk4,875.53 crore as project assistance. Of the approved 12 projects, nine are new while three are revised ones. Bangladesh Regional Domestic Shipping Transport Project-1 is one of the 12 approved projects, of which the estimated cost is Tk3,200 crore, aiming to ensure safe passenger journey and goods transportation on Ctg-Dhaka-Ashuganj river route. About the project, the minister said Bangladesh river route will be a super corridor for the South Asian region, and considering this, the project was approved. The Ecnec also gave the nod to other projects, including Tk286.75 crore for Jhenaidah-Chuadanga-Meherpur-Mujibnagar Highway Development, Tk97 crore for Police Station and Barrack Construction, Tk70.7 crore for Three Guarder Bridge Construction in Jamalpur-Madaripur Highway, Tk2,982.38 crore for Power Grid Development, Tk910 crore for setting up Compressor Wellhead at Titas gas field, Tk869.71 crore for Land Acquisition, Land Development and Rehabilitation to construct 1,320MW cola-based power plant in Patuakhali. •
Business 13 Investors exuberant as Donald Trump signals shift from austerity era • Reuters European stocks rose yesterday following extraordinary gains in Asia and the United States, as exuberance shot through markets and reversed initial dives in reaction to Donald Trump’s US presidential victory. Investors focused on Trump’s priorities - including tax cuts and higher infrastructure and defense spending, along with bank deregulation - and set aside for the moment longer-term worries about whether he will slap punitive tariffs on Chinese and Mexican exports, risking a global trade war. European stocks hit a twoweek high, with the pan-European STOXX 600 index up 1.3% in early dealings, and “safe haven” government bonds sold off after Trump suggested he would spend billions on infrastructure. This marked an abrupt change from the sharp recoil on markets on Wednesday after the Republican candidate’s triumph. Investors saw signs that Trump will ditch the budget austerity policies that Western governments have pursued since the 2008 global financial crisis after he takes over in January. “Trump’s speech following the victory was hugely influential in yesterday’s sudden U-turn, as he focused more on unity and the need to spend to get the economy growing again. These policies combined with his desire to deregulate and lower taxes are all very market-friendly,” said Craig Erlam, senior market analyst at OANDA. “The stance he takes on trade will likely determine how vulnerable the markets are, but in reality these are very long-term policies and for now, markets are more focused on the prospect of lower taxes, fiscal stimulus and less regulation.” The three major US stock indexes rose on Tuesday and the dollar index against major currencies recovered from a trough of 95.885 plumbed on Wednesday to around 98.778 on Wednesday morning. In a remarkable session for Japanese shares, the Nikkei jumped 7 percent at one point after sinking 5% on Wednesday. Gains in Europe, where markets had already started to recover on Wednesday, were more modest. Britain’s FTSE was up 0.95%, Germany’s DAX rose 1.12% and France’s CAC was up 1.06% by 0415 ET. The moves were led by Wednesday’s sharp rises in US Treasury yields. The 30-year Treasury bond yield gained almost 25 basis points in its sharpest rise in more than five years; yields on the 10-year note climbed 21 basis points to breach the 2% mark for the first time since January. High-rated euro zone bond yields - which had sunk early Wednesday - rose sharply on Thursday, with the region’s benchmark German 10-year bonds up 5 basis points to 0.23%, the highest level since May. End of austerity? Trump’s victory and opening comments have sharpened a debate about the austerity consensus that has prevailed across most of the developed world since the financial crisis. If his actions match his rhetoric, it seems likely that Trump’s administration will test the theory of whether central banks’ cuts in interest rates to ultra-low levels and money printing should be replaced by budget measures to boost the world economy. “It looks like Trump will aim for a more fiscally accommodative policy at a time when they seems to be a shift in major economies towards fiscal policies,” said Investec economist Philip Shaw. “The big unknown is how the rest of the Republican party to react to this, as there are many fiscal hawks among them.” Ratings agency S&P Global on Tuesday affirmed the AA+ credit rating of the United States, but noted uncertainty over the future path of government debt would prevent any upgrade. There were also lingering concerns about Trump’s campaign promises to shield American jobs through possible protectionist trade policies. Among Asia’s trade-reliant economies, China and South Korea are particularly exposed to any hostile U S measures as they run large trade surpluses with the United States, Credit Suisse said in a research note. • IEA may see global market awash with oil in 2017 • Reuters The oil market surplus may run into a third year in 2017 without an output cut from OPEC, while escalating production from exporters around the globe could lead to relentless supply growth, the International Energy Agency said yesterday . In its monthly oil market report, the group said global supply rose by 800,000 barrels per day in October to 97.8 million bpd, led by record OPEC output and rising production from non-OPEC members such as Russia, Brazil, Canada and Kazakhstan. The Paris-based IEA kept its demand growth forecast for 2016 at 1.2 million bpd and expects consumption to increase at the same pace next year, having gradually slowed from a five-year peak of 1.8 million bpd in 2015. The Organization of the Petroleum Exporting Countries meets at the end of November to discuss a proposed cut in production to a range of 32.5 to 33 million bpd, but discord among members over exemptions and production levels has raised doubt over OPEC’s ability to deliver a meaningful reduction. “Whatever the outcome, the Vienna meeting will have a major impact on the eventual - and oft-postponed - rebalancing of the oil market,” the IEA said. “If no agreement is reached and some individual members continue to expand their production then the market will remain in surplus throughout the year, with little prospect of oil prices rising significantly higher. Indeed, if the supply surplus persists in 2017 there must be some risk of prices falling back.” Oil prices have risen to around $46 a barrel LCOc1 from near 13-year lows in January around $27, but are still 60 percent below where they were in mid-2014, when the extent of the surplus became apparent. The IEA said it expects non- OPEC production to grow at a rate of 500,000 bpd next year, compared with a 900,000-bpd decline this year, meaning 2017 could see inventories building again if there is no cut from OPEC. Supply outpaced demand by as much as 2 million bpd earlier this year and this excess appeared to have all but vanished during the third quarter of 2016. However, OPEC pumping oil at a record rate of 33.83 million bpd last month, along with increases in production from non-OPEC rivals. • DT FRIDAY, NOVEMBER 11, 2016 Walton gets good response at Lagos Int’l Trade Fair 2016 • Tribune Business Desk Walton’s electronics and home appliances got huge response from the African consumers at the 30th edition of Lagos International Trade Fair 2016 in Nigeria. A 10-day mega show, which began on November 4 at Tafawa Balewa Square of the Nigerian capital of Lagos, will continue till Sunday next. Walton, a Bangladesh manufacturer of electronics and home appliance products, has participated at the mega expo in the African country for the first time to show Made in Bangladesh brand, said a press release. Walton displayed its several products including intelligent inverter technology’s refrigerators, air conditioners, LED televisions, blenders, induction cookers, LED bulbs and other electronics and electrical household appliances. “The entrance of Walton products in Nigeria is a good sign for African’s electronics market and I hope there is a big market of electronics products here due to uniqueness and highest standard,”said Nunne David, a Nigerian entrepreneur. David also said: “We are looking forward to witnessing a big boom of Walton product’s sales due to the participation in this largest fair of the African continent.” Besides, the sound acceptability of Walton products will increase the trade relationship between Nigeria and Bangladesh, he added. While visiting Walton pavilion at the fair, Md Aminul Haque, an expatriate Bangladeshi and Managing Director of ASA Microfinance Bank Limited in Nigeria, stated that he is very proud to see the presence of the leading Bangladeshi electronics brand Walton in Nigerian Market. • BRAC Bank organises a Town Hall meeting with the theme “All for One, One for All” in Sylhet to review business performance of 2016 and set business strategy for 2017 and beyond. All employees of Sylhet area took part in the meeting. Selim RF Hussain, managing director & CEO, BRAC Bank Limited, and senior officials of the bank attended the programme BGMEA Vice-President (Finance) Mohammad Nasir, Director Md Monir Hossain, Sociability CEO Ms Elizabeth Boye, Danish Fashion & Textile Project Manager Ms Sofie Pederson and CSR chief Ms Pia Odgaard at an award-giving ceremony in the city yesterday. A total of 11 trainees were given CSR certificates under the Step-Up Programme jointly organised by BGMEA and Danish Fashion and Textile
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Page 3 and 4: News 3 FRIDAY, NOVEMBER 11, 2016 DT
Page 5 and 6: News 5 FRIDAY, NOVEMBER 11, 2016 CL
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Page 9 and 10: World Farmer suicide, banks call in
Page 11: World 11 FRIDAY, NOVEMBER 11, 2016
Page 15 and 16: Economists see pain, then gain for
Page 17 and 18: Feature 17 FRIDAY, NOVEMBER 11, 201
Page 19 and 20: Biz Info 19 FRIDAY, NOVEMBER 11, 20
Page 21 and 22: The dead end of history Opinion 21
Page 23 and 24: Opinion 23 DT FRIDAY, NOVEMBER 11,
Page 25 and 26: Advertisement 25 Dhaka Tribune FRID
Page 27 and 28: Sport 27 DT FRIDAY, NOVEMBER 11, 20
Page 29 and 30: Downtime 29 FRIDAY, NOVEMBER 11, 20
Page 31 and 32: Showtime Shakib meets Shakib 31 FRI

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