Business Supplement Issue-13

DT
VOL1, ISSUE 13 | Sunday, May 14, 2017
Business Tribune
Syed Zakir Hossain
Fast-track projects not so fast
Muhith: People will have
4 to pay higher tax
How heavy is the dead-weight
7 cost to carry

2
Sunday, MAy 14, 2017
DT
Special
Fast-track projects not so fast
• Shohel Mamun
Of the government’s 10 top-priority
infrastructure projects, called the
fast-track projects, only the Padma
Bridge has made a significant progress
while the others are lagging
far behind their schedules.
Although the ruling Awami
League government had committed
itself to completing at least
three of these mega projects before
the end of their tenure, policymakers
are now anxious because of
their sluggish progress as political
parties gear up for the coming national
elections.
The mega projects were planned
by the government as popular initiatives
for creating a sustainable
economy. The projects are supervised
directly by a Fast-Track Project
Monitoring Committee and a
Fast Track Task Force, with Prime
Minister Sheikh Hasina chairing
both.
Only Padma bridge project
however, has made significant advancement
over the last couple of
years. Some of the fast-track projects
even failed to begin within
the stipulated time. As a result,
project costs jumped up when the
actual construction began.
The government now badly
wants to make Padma Bridge operational
by December 2018 before
the next election.
It also wants the superstructure
of the metro rail project phase 1
(Uttara-Agargoan) and Payra seaport
(phase 1) to be completed by
2018.
The project authorities have demanded
a smooth money flow for
the next fiscal year to enliven the
slow-moving projects.
The government has also responded
quickly, sources said.
The Annual Development Plan
(ADP) for the 2017-18FY is likely to
be set at Tk164,031cr. The mega-infrastructure
projects will get a large
Metro rail Project
Tenure of the project July2012-June 2024
Government committed to complete phase-1 July2012-2019
(Uttara-Agargoan)
Estimated cost
Tk21,985cr
Fund
Tk5,931cr gov
Tk16.594cr JICA
Progress 4.3%
benefit
60,000 passengers per hour to
move Uttara-Motijheel
share of this.
Eight of the projects will
get Tk33,761cr, nearly double
the allocation from this fiscal’s
Tk18,727.36cr.
This allocation was sought at a
recent meeting at the Prime Minister’s
Office.
However, the construction work
of the LNG terminal and the Sonadia
deep seaport are yet to start
because the government has not
finalised the projects. It may even
withdraw from the Sonadia project.
If the project be raised, it will
be implemented on government to
government (G2G) basis. So government
yet estimate the cost of
the project.
There is also a plan to convert
the Payra seaport to a deep seaport.
Coordinator of the fast track
projects Principal Secretary Kamal
Rooppur nuclear power plant
Tenure of the project (main part) March 2017-25
Estimated cost
Fund
Benefit
Abdul Naser Chawdhury told the
Dhaka Tribune: “We are confident
about achieving the goals of the
mega projects. Construction of
Padma Bridge is likely to be completed
by scheduled time. Metro
Rail faced some delays after the
Holey Artisan terror attack but it
is back on track again and hopefully
will be complete by December
2019.
“The rest of the projects are not
scheduled to be completed anytime
soon but hopefully they will
also be completed within stipulated
time.”
Economist Ahsan H Mansur said
a mega project is divided into two
parts - preparation work and construction
work.
“But in most cases the government
takes too much time to
prepare the project proposal, and
them in most cases bureaucrats
cannot prepare the proposal correctly.
So the investors are not interested
in the project and it is delayed,”
he said.
Metro rail Project
The government is constructing
Dhaka Mass Rapid Transit Development
Project (metro rail) to improve
transportation in the capital.
Commuters can move from Uttara
to Motijheel in 38 minutes.
Road Transport Minister
Obaidul Quader said “The project
faced delay due to Holi Artisan attack
in Gulshan while seven Japanese
were killed who were involved
in the project. But we already overcome
the crisis and let the work is
started with a full swing.”
The project has eight contract
packages. Land development work
(CP-1) is underway. The metro rail
authority has signed deals with
two firms for the construction of
viaduct and stations under the
contract package 3 and 4.
Rooppur nuclear power plant
1,13,092.91cr
Tk22,052.91 gov
Tk91,040 Russian federation
Generate 2,400MW power
The initiative for a nuclear power
plant started in 1974 with Bangabandhu
Sheikh Mujibur Rahman
leaded government following discussion
with the Soviet Union in
1974. However no agreement was
reached. The rolling Awami League
government again started discussion
with the Russian government
in 2009 and finally signed a Memorandum
of Understanding aiming to
start the construction work by 2013.
However, the civil work to prepare
the 260 acres of land for the
country’s first-ever nuclear power
plant at Rooppur in Pabna’s Ishwardi
upazila on the bank of the
Padma River is almost complete
but main construction work has
not started yet.
Bangladesh Atomic Energy
Commission (BAEC) under the Science
and Technology Ministry is
implementing the mega project.
“Preparation work is almost
complete. The main construction
work will hopefully begin on September,”
said Anwar Hossain, secretary
to the Science and Technology
Ministry.
The main construction work
however, was scheduled to start in
January.
The power plant is the country’s
biggest-ever project in terms of financial
involvement requiring an
estimated Tk1,13,092.91cr.
The Executive Committee of the
National Economic Council (EC-
NEC) approved the project in December
5, 2016 aiming to construct
two units of a nuclear power plant
with a capacity of 2,400MW. Each
unit having a capacity of 1,200MW.
A unit to be completed by 2021.
The Russian Federation has already
approved a loan of $11.38b
with the condition of repaying the
money in 20 years.
Rampal Power Plant
The Rampal power plant has made
little progress since the government
planed it in 2009. Only the
land development work of the
project is done. Bangladesh-India
Friendship Power Company Limited
is implementing the project.
A Power Division summary said
135KVA generator and transmission
line for power supply into the project
area has been completed along
with five watch towers for security.
However in August 2010 when
a MoU was signed between Bangladesh
Power development board
and Indian’s state-owned National
Thermal Power corporation it
was designated to implement the
project by 2016. But further it is
re-scheduled to be completed by
2023.
Matarbari 1,200MW ultra super
critical coal-fired power plant
Materbari 1,200-MW ultra super
critical coal-fired power plant
Tenure of the project
July2014-June2030
Estimated cost
Tk35,984cr
Fund
Tk7,045cr gov
Tk28,939cr by Jica
Progress 1.18%
benefit
To generate 1200MW power
The government is constructing a
coal-fired power plant in the Chittagong
region aiming to strengthen
the power capacity counting as priority
project. But the progress rate
of the project is very slow, even authority
yet to complete preparation
work.
ECNEC approved the project in
March 2016. Land for the project
has been handed over to the Coal
Power Generation Company Bangladesh
Limited.
A project summery noted that
the company completed the land
development work and fenced the
area by April this year. Besides, a
construction firm just started the
work of 132/33kv substation and
transmission line.
Dohazari-Cox’s Bazar-Gundum
single line dual-gauge rail line
Though the Cox’s Bazar rail link
project was undertaken six years
ago aiming to boost tourism to the
coastal district, but the progress of
the fast track mega projects is very
slow. Only 2.2% of the project has
been finished.
During a recent visit to the project
area it was found that Railway
is only now carrying out the acquisition
and demarcation of 1,390
acres of land needed for the project.
Railway Secretary Mofazzel Hosain
said: “We have already invited
tenders for construction of 100km
rail line. Now we are evaluating the
bidders. Hopefully construction
work will begin next August-September.”
The Asian Development Bank
approved around Tk12,000cr in
September 2016 after completion
of a feasibility study.
Padma rail link project
The Padma rail link project is
one of the fast-track projects yet
to have its funding confirmed. As a
result completion of the project by
the deadline is impractical.
The project aims to lay a total of
172km railway tracks between Dhaka
and Khulna’s Mongla.
However, Railway Minister Mujibul
Haque said: “We are trying
to partially complete the project
during the opening of the Padma
bridge project in December 2018.”
Railway officials said the project
has two phases - Dhaka to Mawa
and Zajira to Faridpur and Khulna.
At the moment, land acquisition is
underway. If possible the rail link
will be connected first between
Padma Bridge and Faridpur.
“We have demanded around
Tk5,000cr to speed up the construction
work in the Jajira-Faridpur
region, but the allocation may
be Tk5,500 crore,” said an official.
Payra seaport
Although the country’s third
seaport at Kalapara in Patuakhali
is already partially operational,
progress of the second phase of the
project is very slow.
“We are currently constructing
a five-story administrative building
and warehouse which can help
boost the business of the port.
Hopefully the project will be implemented
by 2018-19,” said the
shipping minister.
As per the Plan, Payra seaport
would be developed in three phases
by the 2023. •
Rampal (660*2) Power Plant
Tenure of the project
July2014-2023
Estimated cost
Tk16,000cr
Fund
Tk2,400cr gov
Tk13,600 loan from Indian Exim bank
Progress 2.7%
benefit
To generate 1,320MW power

Interview
3
Sunday, MAy 14, 2017
DT
'Lack of preparation slowing the projects'
Prominent economist Dr Ahsan H Mansur, the executive director of Policy Research
Institute (PRI) of Bangladesh, speaks to the Dhaka Tribune’s Shohel Mamun regarding
the ten fast-track mega projects and explains the reasons behind their slow progress.
Getting at the heart of the matter,
why are the fast-track projects
making such slow progress?
In order to boost the economy,
the government has set ten projects
on the fast track, aiming to
strictly monitor their progress and
have them completed within the
schedule time. However, due to
very weak basic preparation, the
progress has been very slow.
Basically, there are several reasons
for the slow progress: Firstly,
the preparation for the projects
has not been thorough and the
investors have not been properly
briefed. This has led to fund crises
for many of the projects. The Padma
Bridge Rail Link, the Kutubdia
LNG Terminal and the Sonadia
deep sea port have all been stalled
because of a lack of funds.
Secondly, the officials running
the project work are inefficient.
The Chittagong-Cox’s Bazar Railway
Line project took six years to
complete because the Bangladesh
Railway does not have efficient officials
who can prepare the project
documentation properly.
Finally, the construction firms
have been negligent and this has
added to the slow progress. The
government should have thoroughly
vetted the firms before giving
them work orders. Firms like
Chinese hydropower engineering
and construction company Sinohydro
do flawed jobs and should
not be given work orders and yet
Dr Ahsan H Mansur, the executive director of Policy Research Institute (PRI) of Bangladesh
have been handed projects several
times.
These reasons do not cover
projects like the Metro Rail or the
Payra sea port. Why have those
projects been delayed?
The Metro Rail project faced delays
because of the Holey Artisan attack
last year where many Japanese
citizens were killed. The Payra sea
port project has been delayed because
of total negligence on the
part of the government.
When the projects are complete,
how will the economy be
impacted?
Courtesy
The Padma Multipurpose Bridge,
the two power plants and the sea
ports are very important projects
because they can accelerate our
economy massively by improving
local trade and export-import and
increase employment.
However, the longer it takes to
implement these projects, the faster
these benefits will be lost. For
example, the Padma Bridge project
is now costing five times more than
the estimated cost. After the project
is complete, the government
will need a lot of time to return the
investment.
Is the slow rate of implementation
wasting public money?
The Chittagong-Cox’s Bazar Rail
Line project was undertaken in 2010
with an estimated cost of around
Tk5,000 crore, but now has cost
over Tk18,000 crore. By the time
the project is implemented in 2022,
I think even this increase in cost will
double. This means there will definitely
be a lot of wastage of funds.
The government plans to allocate
more funds for the fast track
projects in next fiscal year. Do you
think access to more funds will
speed up the rate of progress?
Irrespective of the smooth flow
of money, the projects will continue
to be delayed because of technical
issues. These mega projects will
need time for construction.
For example, the Padma
Bridge piling work is being done
in the river. If they find that the
estimates are incorrect and they
need to do more piling work, then
the problem will be time and not
money. Just because the funds will
be easily available does not mean
that their timeframe will change.
Money cannot help lessen the time
needed. •
Meeting Padma Bridge deadline will be a challenge
• Shohel Mamun
Although moving at a steady pace, the Padma
Bridge is unlikely to be completed within
December 2018, officials working in the project
said.
The overall progress of Padma bridge was
42% at the end of April. However progress
of main bridge is 36% and progress of river
training is 30%.
According to the plan, around 64% of the
total work will be completed by June with
the construction reaching 89% by the beginning
of the next fiscal year in July.
The Zajira approach road is 96% done, and
the Mawa approach road and the service area
2 done entirely, according to the Bridges Division.
The project authorities now want to complete
the remaining 64% of Padma Bridge’s
main work within the next 20 months.
Although the bridges minister and experts
are saying that the progress of the bridge
construction work is satisfactory, engineers
involved directly in the construction said it
would be very difficult to finish the entire
project by December 2018.
“Finally when most of the work is
completed, the bridge might be opened for
traffic by the deadline while continuing the
rest of the work,” said an official seeking
anonymity.
Road Transport and Bridges Minister
Obaidul Quader told the Dhaka Tribune at his
office: “We are happy about the progress and
hopefully the bridge will be ready for traffic
by December 2018.”
Dewan Abdul Quader, executive engineer
of the Padma Bridge project, said: “Currently
main piling work is underway in the river
and the superstructure is being prepared in
Beijing, China.”
A bridge authority report said a total of
Tk12,784.56cr has been spent of the total
budget of Tk28,793.39cr till February. The
project has spent Tk1,796.56cr between June
to February of its allocation of Tk6,026.48cr
in the current fiscal year. •
Construction of Padma Bridge is going on
Rajib Dhar

4
Sunday, MAy 14, 2017
DT
Week in Review
Muhith: People will have to pay higher tax
The finance minister has said people
will have to pay higher tax from the
next fiscal year.
“The living standard has improved
as we have been constantly maintaining
a 6% growth rate over the last eight
years,” AMA Muhith told at pre-budget
meeting with editors of print and
electronic media on May 11.
“I believe the people are now capable
of paying taxes,” he said, admitting
that the proposed tax incidence would
affect the people.
But implementation of a 15% flat
VAT rate for almost all products from
July 1 amid widespread criticism will
push up prices of essentials, due to
multi-stage payment of tax from production
level to retailing.
This means, living cost will also rise.
Muhith said the VAT net was
expected to be expanded further. He
said the total revenue growth rate for
next fiscal is 30% but now it stands
at 17%.
The National Board of Revenue
(NBR) has proposed a VAT rate of
10%-12% which will be placed before
Prime Minister Sheikh Hasina on May
14. It has also prepared a new tariff line
of 500 products to protect the local
industry.
But under new VAT and supplementary
duty law, supplementary duty will
remain on 170 products.
Under the new law, all business
transactions – except education, lifesaving
drugs and essential commodities
– will come under VAT net. The
Dhaka Tribune
NBR, however, is yet to clarify those
exceptions.
Product manufacturers will enjoy
rebate by showing previous vouchers
or records. •
Government
approves
amendments to
Bank Company Act
The government has approved
amendments to three provisions of
the Bank Company Act, including
increasing the tenure of the board
of directors of a private bank from
six years to nine years.
The amendments, proposed by
the Financial Institutions Division,
were approved in a cabinet meeting
on May 8.
Cabinet Secretary Mohammad
Shafiul Alam said as per the amendment
to a second provision, the
elected chairman, directors and the
managing director of a private bank
will require the consent of Bangladesh
Bank prior to assuming office.
In the current law they have to seek
permission from Bangladesh Bank
before participating in the election.
He also said the Bangladesh
Bank will not cancel the appointment
of a chairman, a director or
an MD of a bank but it will give its
observations about the appointment.
•
NBR Chairman Md Nojibur Rahman
Govt plans to replace
NBR chairman
The government is likely to appoint
acting commerce secretary Shubhashish
Bose as the new chairman of the
National Board of Revenue (NBR) soon.
NBR Chairman Md Nojibur Rahman
will be reasigned as Officer on Special
Duty after announcement of national
budget for fiscal year 2017-18, Commerce
Ministry sources confirmed on
May 10.
Although the government is yet to
issue any official circular, sources confirmed
to the Dhaka Tribune that the
NBR chairman will be sent to OSD on
June 4, two days after the announcement
of the budget.
In a sudden development on
Wednesday morning, Finance Minister
Dhaka Tribune
AMA Muhith called the acting commerce
secretary Shubhashish Bose
over phone and asked him to attend
every single budget meeting to be
held from now on.
The acting commerce secretary
was also asked to meet with the minister
on Thursday.
Nojibur Rahman was appointed
as the NBR chairman, also secretary
of the Internal Resources Division on
January 11, 2015.
A 1982 BCS cadre, Nojibur Rahman
earlier served as secretary of the
Statistics and Informatics Division and
the environment secretary.
He also served as the economic
minister at Bangladesh’s UN Mission. •
Govt mulls settling SIM replacement
VAT issue before 4G auction
Islami Bank
governing body in
turmoil
The governing body of Islami Bank
Bangladesh Limited (IBBL), which is
just in its fifth month, is gripped by
suspicion and disbelieve, intensifying
an internal conflict.
Reconstituted on January 5
this year, the governing body now
appears to be on the verge of being
dissolved, reports Bangla Tribune.
The intra-bank row became even
clearer after IBBL Vice-Chairman
Prof Syed Ahsanul Alam, who is well
known as a government-backed
figure, decided his resignation on
May 11.
“After taking charge, we tried to
make the bank acceptable to all. But,
it feels that the governing body is no
longer controllable,” he said. •
The government is considering that
it would resolve the VAT related case
in connection with SIM replacement
ahead of 4G auction through External
Resources Division.
According to industry insiders,
before 3G auction in 2013, the government
took such move to resolve
the case in the wake of threat that the
operators would boycott 3G spectrum
auction if the VAT issue was not
settled. But later the subject didn’t
proceed further.
Since Bangladesh Telecommunication
Regulatory Commission (BTRC)
is planning to float the 4G auction by
this year, the government has taken a
further initiative to bring four mobile
operators into the upcoming auction.
Initially, the National Board of Revenue
(NBR) is thinking about two options.
Primarily, it will request VAT appellate
division for quick decision, and secondly,
the finance minister can inform law
minister as well as attorney general of
the case to resolve the case quickly.
According to provision 55(3) of VAT
law 1991, mobile operators will pay VAT
BB won’t allow mobile
operator-led MFS
Bangladesh Bank Deputy Governor SK
Sur Chowdhury has said the central
bank will not allow mobile operator-led
mobile financial service (MFS).
“We will not allow any mobile
operator-led model except bank-led
model,” Sur said at a roundtable held
at a city hotel on May 9.
United Nations Capital Development
Fund (UNCDF) Bangladesh
organised the roundtable titled “Role
of Digital Financial Services in promoting
inclusive growth: challenges and
opportunities”.
At present, mobile financial
services are being run by commercial
banks. Mobile operators have long
sought to run the MFS but the banks
while they sell any SIM.
The authorities concerned informed
Finance Minister AMA Muhith
about the VAT issue relating to SIM
replacement at a meeting. Muhith
agreed to resolve the matter lawfully.
According to the operators, they
pay VAT while selling SIM, but they
do not pay VAT when a subscriber
approaches them to replace SIMs because
VAT is paid off during SIM sale.
But NBR says operators have
dodged VAT in the name of SIM
replacement. •
were always opposed to the idea.
According to the Regulatory
Guidelines for Mobile Financial
Services in Bangladesh, the MFS
platforms will be sponsored and led
only by commercial banks.
The deputy governor said the
central bank in recent years has taken
several initiatives to promote Digital
Financial Services (DFS).
“Bangladesh Bank and Bangladesh
Telecommunication Regulatory
Commission are working together to
boost up this kinds of services,” he
said, adding that DFS brought new
opportunity.
He said income gap was narrowing
due to mobile financial services. •

Corporate News
5
Sunday, MAy 14, 2017
DT
Vice chancellor of Noakhali Science and Technology University (NSTU), Dr M Ohiduzzaman has recently
handed over papers of an agreement on education between NSTU and University of South Bohemia in
Czech Republic, said a press release
Bangladesh University of Professionals has recently held a seminar on right to water, said a press
release. Speaker at Bangladesh Parliament, Dr Shirin Sharmin Chaudhury was present at the seminar as
chief guest
Prime Bank Limited has recently held its 22nd annual general meeting in Dhaka, said a press release. The
bank’s chairperson, Azam J Chowdhury presided over the meeting
Centre for Non-Resident Bangladeshis has recently honoured Pubali Bank Limited with an award for
its support service to foreign inward-remitters, said a press release. The bank’s managing director, Md
Abdul Halim Chowdhury received the award from information minister, Hasanul Haq Inu
National Bank Limited has recently organised a workshop on prevention of money laundering
and combating financing of terrorism, said a press release. The bank’s DMD, Shah Syed Abdul Bari
inaugurated the workshop as chief guest
Doctorola.com recently signed agreement with Apollo Hospitals Dhaka to find out and book
appointments of the its doctors through the online
OPPO has recently launched a phone named Selfie Expert F3, said a press release. The company’s
managing director, Navy was present at the launching ceremony
National swimming team of Bangladesh has recently met president of Bangladesh Swimming Federation
and chief of Naval Staff Admiral, Mohammad Nizamuddin Ahmed, said a press release. The 6-swimmer
team will participate in the 4th Islamic Solidarity Games to be held in Azerbaijan this month
University Grants Commission of Bangladesh (UGC), with the support of Taylor and Francis Group, has
recently organised a workshop on digital library user training, said a press release. Chairperson of UGC,
Professor Abdul Mannan was present at the workshop as chief guest

6
Sunday, MAy 14, 2017
DT
Stocks
W E E K L Y M a r k e t O v e r v i e w
SUMMARY Points Change (%) Turnover (BDTmn) Volume (mn) Advanced issues Declined issues Unchanged Issues
DSEX
5,496.2 DSEX 5,496.2 -0.80% 28,313 887 145 158 28
(-) 0.80%
CSE ASI 17,020.8 -0.92% 1,601 60 122 127 29
Stocks fall further over the week
• Tribune Business Desk
Markets closed in red last week weighing mostly
on the financial institution sector. Traders
say the investors seen busy over the week adjusting
their portfolio as the quarterly earnings
season coming to an end.
The daily average turnover of the week declined
0.37% to BDT 7,08cr, of which 32% was
contributed by banking and financial equities,
according to the weekly market report of UCB
Capital Management Ltd.
The benchmark index, DSEX closed at
5,496.2 points on Thursday after losing 0.80%
during the week while CSE ASI declined by
0.92% to end at 17,020.8 points.
According to market data of Dhaka bourse,
Central Insurance secured the highest weekly
gain of 22.0% while the worst loser, MIDAS Financing
share price declined by 14.1%.
Doreen Power Generations and System Limited
secured the top turnover leader position
last week with a turnover of Tk 152cr during
the week with its share price gaining 8.9% during
the week.
DS30, the blue-chip index went down by 9.8
points or 0.48% to end at 2,023.96 points, while
DSE Shariah based index declined 1.7 points or
0.13% to close at 1,273.4 points. Among the
Dhaka Tribune
traded issues 145 gained, 158 declined and 28
remained unchanged during the week.
The Dhaka Stock Exchange currently has a
market capitalisation of BDT 374,469cr with
the benchmark index, DSEX up by 9.14% since
beginning of this year. •
DSE NEWS
UNIONCAP: The Board of Directors has
recommended 10% stock dividend for the
year ended on December 31, 2016. Date of
AGM: 15.06.2017, Time: 11:00 AM, Venue:
Spectra Convention Centre Ltd., Gulshan-1,
Dhaka. Record date: 31.05.2017.
The Company has also reported Consolidated
EPS of Tk. 1.44, Consolidated NAV
per Share of Tk. 17.80 and Consolidated
NOCFPS of Tk. 3.08 for the year ended
on December 31, 2016 as against Tk. 1.31
(restated), Tk. 17.53 (restated) and Tk.
2.92 (restated) respectively for the same
period of the previous year. Q1 Un-audited:
Consolidated EPS was Tk. 0.51 for
January-March, 2017 as against Tk. 0.19
for January-March, 2016. Consolidated
NOCFPS was Tk. 1.85 for January-March,
2017 as against Tk. (2.66) for January-March,
2016. Consolidated NAV per
share was Tk. 17.61 as of March 31, 2017
and Tk. 17.80 as of December 31, 2016.
Most Traded
Technicals stand out amid a quiet market
• Reuters
Price Weekly change
Doreen 131.6 8.85%
LankaBangla 52.5 0.96%
UPGD 167.8 -1.70%
Argon Denims 36.1 2.56%
SPCL 148.2 -2.05%
National Feed 26.9 3.86%
RSRM 85.5 -2.40%
ONE Bank 21.3 -4.48%
FASFIN 19.2 18.52%
BEXIMCO 33.1 -6.28%
Dhaka Tribune has accumulated the stock market related data primarily from Dhaka Stock Exchange website. The basis of information collected was primarily from daily stock quotations and audited/unaudited
reports of publicly listed companies. High level of caution has been taken to collect and present the above information and data. The publisher will not take any responsibility if any body uses this information and
data for his/her investment decision. For any query please email to news@dhakatribune.com.
As the strongest earnings season
since 2011 draws to a close, and
with the S&P 500 and Nasdaq
Composite hovering near record
highs, the biggest concern for
some market analysts is, well, the
lack of concern.
The largest daily move on the
S&P 500 in almost three weeks was
only 0.4%. The small daily moves
are partly the reason for a more
than 20-year closing low hit this
week on the CBOE Volatility index,
a measure of investor anxiety.
“Most of what you’ll find that
is outright negative will have to
do with sentiment,” said Marc
Pado, president at DowBull.com
in San Francisco.
“People worried about the
market on a technical basis are
MOVEMENT OF DSEX INDEX LAST WEEK
5,560
5,540
5,520
5,500
5,480
5,460
worried because there is too
much complacency or optimism,
but not on an indication that
there is some kind of top.”
The S&P 500 posted record
closing highs twice this week, but
both were lower than the intraday
high set March 1, just below
2,401. The intraday record high
set Tuesday, near 2,404, doesn’t
signal a breakout from the resistance
level set some 11 weeks ago.
Precisely because of the sideways
move, momentum has not
mirrored what was seen in early
March. The 14-day momentum
measure of the S&P peaked this
year on March 1. On Friday it
closed at its weakest level in nearly
three weeks.
“The bigger risk now (to the
stock market) would be overbought
conditions, even more
DAY 0 DAY 1 DAY 2 DAY 3 DAY 4
overseas than in the US,” said Katie
Stockton, chief technical strategist
at BTIG in New York.
“If momentum doesn’t stay
strong enough, which I think it
will, that would be a risk to the
market. It’s a matter of momentum
remaining strong enough.”
Breadth thinning
The Nasdaq Composite, which
closed Friday almost 4% above
its March 1 close and set intraday
and closing records this week, is
showing a particularly damning
pattern in terms of breadth.
The 50-day average of advancing
names on Nasdaq peaked this
year in mid-January and is in a
clear trend lower. It hit its lowest
level this year on May 5, and the
spread with the 50-day average
of decliners has been in and out
of negative territory since early
March.
Waning breadth suggests the
market advances on less than
solid ground as fewer and fewer
stocks participate to the upside.
On the S&P 500 the 50-day
advancers average is at its lowest
level since the Nov. 8 US presidential
election. However, with
the index trading basically sideways
since the March record, the
signal can be misleading.
“In every one of the (previous)
legs higher we saw internal
breadth indicators confirming the
new high. We haven’t seen that
over the last week but the high was
marginal only,” said Paul Hickey,
co-founder of research firm Bespoke
Investment Group in Harrison,
New York, who remains with a
positive view of the market. •
FIRSTSBANK: Consolidated EPS was Tk.
0.51 for January-March, 2017 as against Tk.
0.40 for January-March, 2016. Consolidated
NOCFPS was Tk. (23.93) for January-March,
2017 as against Tk. (14.76) for
January-March, 2016. Consolidated NAV
per share was Tk. 16.35 as of March 31,
2017 and Tk. 14.68 as of March 31, 2016.
The Company has informed that the Board
of Directors has decided to purchase a
floor space measuring 56 square meter at
Ground Floor and 34.30 square meter at
Basement, totaling 90.30 square meter, at
“Via Principe Amedeo”, 273, 00185, Rome,
Italy at a total cost of Euro 3,60,000.00
only (excluding registration fees, TAX,
VAT and other related charges) for the
Exchange House of the Bank namely First
Security Islami Exchange Italy S.R.L, subject
to the approval by Bangladesh Bank.
MERCANBANK: Consolidated EPS
was Tk. 1.08 for January-March, 2017 as
against Tk. 0.59 for January-March, 2016.
Consolidated NOCFPS was Tk. 5.84 for
January-March, 2017 as against Tk. 3.71
for January-March, 2016. Consolidated
NAV per share was Tk. 21.57 as of March
31, 2017 and Tk. 22.82 as of December 31,
2016.
BRACBANK: Consolidated EPS was Tk.
1.62 for January-March, 2017 as against
Tk. 0.98 for January-March, 2016. Consolidated
NOCFPS was Tk. 7.98 for January-March,
2017 as against Tk. (4.42) for
January-March, 2016. Consolidated NAV
per share was Tk. 32.89 as of March 31,
2017 and Tk. 29.53 as of March 31, 2016.
DBH: EPS was Tk. 3.03 for January-March,
2017 as against Tk. 2.61 for January-March,
2016. NOCFPS was Tk. 9.26 for January-March,
2017 as against Tk. (4.78) for
January-March, 2016. NAV per share was
Tk. 32.50 as of March 31, 2017 and Tk.
28.14 as of December 31, 2016. •

OPINION 7
DT
Sunday, MAy 14, 2017
How heavy is the dead-weight cost to carry
THE lAST
WORD
• Tim Worstall
As far as economics is concerned, there is no right answer to
this. For economics can tell us what is efficient but it cannot
tell us what is fair, that’s about morality
This is disturbingly awkward as
I’m about to claim that a politician
has the right idea and do so for the
second time in a month. But it is
so, Finance Minister AMA Muhith
is correct in his insistence that the
VAT should be brought in. I do
not claim that his specific plans
are perfect but the general idea is
indeed thought to be very good
economics. And for very much the
same reason, I praised the earlier
insistence that property should be
properly registered and taxed.
VAT is one of the lesser bad
forms of taxation out there. None
of us like paying taxes, even if we
think that what the government
does with it is absolutely alright
-- a delusion shared by very few
-- we do still understand that the
tax is the cost of us getting the
benefits of government spending.
And there’s no doubt at all that
we need to have at least some form
of government, however modest,
and that also means that we must
have tax revenue, again, however
modest.
At which point, economists insist
that tax is a bad idea. Yes, true,
we could buy wondrous things
with the money paid in tax. If you
tax something you will get less of
it, so, whatever it is that we tax
we’re going to get less of. That’s
why land taxation is so effective
-- we’re not going to make Bangladesh
smaller by taxing the land,
but other than that, whatever we
do tax we’ll get less of.
If we tax profits, then people
will make less effort to make profits.
If we tax income, then people
will work less hard. If we tax people
buying things, then people will
buy fewer things. This is just how
it works. Taxing any economic activity
means less of that economic
activity going on.
We call that loss of economic
activity the “dead-weight cost” of
the tax. Just things that don’t happen
because of the very existence
of the tax. If apples cost Tk5, I will
buy one. If a tax makes apples cost
Tk7, then I won’t buy one. The
dead-weight cost of the Tk2 tax is
one less apple sold. This applies to
just about every tax.
However, we also know that different
taxes have different deadweight
costs. There’s a spectrum
in fact -- from that land tax which
has almost no such losses, through
consumption taxes, to income, to
capital and corporate, and at the
very top something like a transactions
tax. We want to do as much
of our taxation as we can at the
lower cost end of that spectrum
than the higher.
Think it through for a moment.
The dead-weight is the economic
activity that just doesn’t happen
because of the existence of the tax.
Yet, we like economic activity, it
what makes us richer over time.
But we also need tax revenue
because we want a government.
So, we should get our tax revenue
from the tax which eliminates the
least-in-demand economic activity.
These are not the correct numbers,
but just to show the logic of
the example. Imagine, if we get
Tk1,000 from taxing profits, that
then cuts off Tk300 of economic
activity. If we get Tk1,000 from
taxing income, that takes away
Tk200; and if we get the same tax
revenue from taxing consumption
then only Tk100 is the cost.
We would obviously like to get
more of our tax revenue from the
consumption tax, wouldn’t we?
Because that translates to the most
economic activity while we also
fund the government.
And a VAT is indeed a consumption
tax. The people who really
pay it are those who buy things
to consume. We consume a shirt
by wearing it, we consume a bed
by sleeping on it -- but that is also
where our problem is of course
because this means that we’re now
taxing the people rather than just
the rich.
That is, a VAT is a regressive
tax, it falls on all rather than only
those with the big wallets. There
is a partial solution to this, which
is to leave some things not subject
to the tax. It’s not unusual, for example,
to not to pay VAT for food
-- although places like Sweden do
charge for it. But there isn’t really
any perfect solution.
For here, we’ve got our great
economic trade off again. We’d
like to be efficient, because that is
Bigstock
what makes us all richer over time.
But we’d also like to be fair and
that’s a very different calculation.
Fair would be if only the rich had
to pay for all of the government --
even Adam Smith said that the rich
should be paying a greater portion
of their income in tax. But that
wouldn’t be efficient, the rich gets
much of their money from profits
which we know has high deadweight
costs. Thus, being fair now
makes us poorer in the future than
we would be otherwise.
As far as economics is concerned,
there is no right answer
to this. For economics can tell us
what is efficient but it cannot tell
us what is fair, that’s about morality.
The best we can do is some sort
of vague balancing act.
Yes, we should be getting some
to much of our tax revenue from
VAT and such consumption taxes
just because that makes all richer,
eventually. Whether it’s fair or not
just has to be offset against that
overriding goal, which is, after all,
the very point of having an economy
in the first place -- that we all
do get richer over time. •
Tim Worstall is a Senior Fellow at the
Adam Smith Institute in London.

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