Business Supplement Issue-22

DT
VOL1, ISSUE 22 | Sunday, July 23, 2017
Business Tribune
Local brands dominate
smartphone market
Dhaka Tribune
ADB: Bangladesh beats
4 growth forecast
Want a brand following?
7 Solve a problem

2
Sunday, July 23, 2017
DT
Special
Local brands dominate smartphone market
• Ishtiaq Husain
Bangladesh has seen a rapid
growth in mobile handset market,
specially in smartphone segment,
since 2013, with local brands dominating
the market, while the international
ones are striving to gain
momentum with their aggressive
marketing strategies.
At present, the country is a
Tk8,500-core market of some three
crore mobile handsets comprised
of local and international brands
vying with each other.
Of the total mobile phones, only
30% are smartphones and the rest
are basic phones, which are priced
below Tk2,000.
Since 2008, local mobile handset
brands had the lion’s share of
the market with its lost-cost and
mid-range basic products.
During the period between 2008
and 2012, international brands
were losing their business to local
brands, Symphony and Walton,
which gathered momentum with
their over 50% market share. The
local brands served customers with
low-cost smartphones priced at between
Tk3,000 and Tk6,000.
In recent years, particularly over
the last two years, most international
brands made a comeback
with their quality products, strong
Research and Development (R&D)
strategy and after-sale services.
There are hardly any districts
where international brands have
not opened up their showrooms to
reach out their products to smartphone
users.
According to the Technology
Market Research Firm, Counterpoint,
Huawei that entered the top
five smartphone brands topped the
list in Q1 of 2016 and continues to
perform well in the segment, moving
up into top three spots in Q3
of the same year. The growth was
mainly driven by its affordable
smartphones.
Samsung has slipped to become
the third largest mobile
phone brand in Bangladesh, still
holding the second position in the
fast-growing smartphone market
with a 15% market share.
Indian brand LAVA that set foot
in the Bangladesh market in 2013
remains strong within top five
smartphone brands in the country
with 8% market share presently.
Unlike LAVA, Micromax India
which is struggling in its home
market continues to lose its market
share in Bangladesh as well, and is
now out of the top 10 mobile phone
brands listed in Q3 last year.
Symphony leads by a big margin
in both overall mobile phone and the
fast-growing smartphone sub-segment
with 14% market share.
An affordable offer, effective localisation
of software and services,
expansive distribution and strong
connection with local users drove
MOBILE HANDSET IMPORT IN 2016
Brand Quantity of handset (in million) Value in Tk crore
Symphony 11.6 1897
Samsung 2.00 1830
Walton 1.80 600
Huwawei 0.7 511
Lava 0.7 361
Oppo 0.2 301
Others 21.67 515
Total 38.67 6,015
We have some limitations about skilled
manpower and technology. It will take time
to achieve that skill
Source: BMPIA
the Symphony’s rapid. According
to the phone company, currently, it
holds 38% market share.
The fourth largest mobile phone
player in Bangladesh, Walton, is
ranked with top five in both feature
as well as smartphone segments.
Given the situation, Ashraful
Haque, director (marketing), Symphony,
said the local brand would
be able to retain its market share
using new strategy. Moreover, the
government new tax policy on imported
spare parts will be congenial
to their business.
In the last budget of Fiscal Year
2016-17, the government has reduced
tax over 15% on imported
spare parts which would encourage
local brands to assemble their mobile
handsets in the country.
At present, around 30% people
use smartphones. The ratio will
reach 35% by the end of this year
and 60% by 2020.
According to users, when it
comes to quality, local brands fail
to compete with the international
brands, and to survive in the market
situation, they got to produce
quality products.
Rezwanul Hoque, CEO, Transsion
Bangladesh Limited, a Chinese
mobile handset company, said the
main weakness of local brand is they
don’t have any Research and Development,
one of the most important
elements in manufacturing mobile
handset. Transsion invests 6% of its
total revenue earnings in R&D.
He said Bangladesh has huge
potential in mobile handset market.
To meet only 30% demand,
some 82 lakh smartphones were
imported in the last one year. If
the ratio of smartphone use rises
nearly 70%, the market would be
increased more than twice.
Counterpoint Senior Analyst
SuJeong Lim noted that “Although
Bangladesh’s mobile phone market
is driven by feature phones, smartphones’
share is also growing every
quarter.”
Of the total mobile phones,
smartphone’s share is estimated to
rise to almost 50% from 28% by the
end of 2017, he commented.
The rise of smartphone users is
fuelled by the launch of affordable
3G devices. It is mainly driven
by local brands such as Symphony
and Walton. Global brands Samsung
with its J series along with
Huawei and Oppo are pushing up
the 4G LTE-enabled smartphones,
the next battleground for differentiation
in Bangladesh smartphone
segment in 2017.
“LTE capable smartphones now
contribute to nearly one on four
smartphones shipped in Bangladesh,”
Counterpoint Research
Analyst Pavel Naiya, said, adding
that Bangladesh market is mainly
dominated by local players with a
combined share of two-thirds of
the total mobile phone market.
Symphony Mobile remains the
single largest mobile phone brand
followed by Winmax mobile and
others. Smaller Chinese brands
continue to lose market share to
Oppo and Xiaomi that have entered
the smartphone market while local
players are upping the ante with
low-cost smartphones to sustain
their market share, according to
the research.
Uday Hakim, senior operative
director, Walton, said: “No doubt,
international brands are the big
threat for us. At this moment, we
need a friendly policy that will
help us compete with international
brands, or else, it would be tough
to survive in this market.”
Industry insiders said local
brands pay 15% vat on supplying
level and 35% corporate tax, which
they termed a huge risk factor.
Uday added that Vietnamese
mobile brands have a huge dominance
in the world after China as its
government took some supportive
policies for local mobile companies.
“If the government provides a
20 to 30-year tax holiday for local
companies as Vietnam and India
do, we will be able to produce
cheapest handsets in the world.”
At present, there are 120 million
mobile phone subscribers in the
country. Of them, 63 million subscribe
to mobile data plan of different
sorts. The report pointed to the
fact that although 10% of overall
mobile phone subscribers got cut
in 2016 due to biometric registration,
mobile internet saw a 24% rise
in subscriber’s number.
Handset importers of the country
are eyeing a 25% growth in total
sales of all kinds in 2017, said Bangladesh
Mobile Phone Importers Association
(BMPIA) president Ruhul
Alam Al Mahbub.
He said in Bangladesh customers
become interested in buying
brand handsets as their buying capacity
has increased.
“We have some limitations
about skilled manpower and technology.
It will take time to achieve
that skill,” said Symphony Director
(Marketing) Ashraful Haque.
In the country, over 40% population
are connected to internet
and there is a huge opportunity for
the handset players to tap the first
time users by offering affordable,
yet quality smartphones. •
MD MANIK

Interview
3
Sunday, July 23, 2017
DT
Bangladesh to turn mobile manufacturer soon
Bangladesh government should come up with attractive package including tax holiday and
measures to create skilled workforce to tap huge opportunity of mobile phone industry to meet
the demands locally, Asifur Rahman Khan, head of marketing, Walton cellular phone, told the
Dhaka Tribune’s Ibrahim Hossain Ovi in an exclusive interview
What are the challenges to local
brands?
Now, there are a number of challenges
to local brands. These are
scarcity of skilled labour force;
relatively higher production cost
compared to that of foreign brands;
price competitiveness; risk of technology
transfer, etc.
Do you think Bangladesh can
export mobile phone after
meeting local demands?
Of course, the country has an opportunity
to export locally made
mobile phone sets after meeting local
demands. A significant number
of expatriate Bangladeshis are now
in different countries. If we target
those Non-Resident Bangladeshis
(NRBs), we will find a potential
market abroad.
Do you think Bangladesh can
manufacture mobile phone
instead of assembling?
Yes, I think so. The country will
turn into a mobile phone manufacturing
hub rather than an assembling
industry. Once, we used
to manufacture some spare parts
of refrigerators, televisions and air
conditioners locally, but now we
have turned ourselves as a 100%
local manufacturer of those home
appliances.
Does Walton assemble its own
handsets locally? If no, do you
have any plan to do so in the near
future and when?
Right now, Walton is not assembling
its own brand handsets locally,
but it has a plan to manufacture
world-class handsets in its own
factory at Chandra in Gazipur.
DG Tech Industries Ltd, a sister
concern of Walton Group, is establishing
manufacturing project.
If everything goes fine, we would
be able to start production by this
month.
Asifur Rahman Khan, head of marketing, Walton cellular phone
How can local brand turn out to be
a global brand?
It is a 100 million question, but it is
now a reality, as Walton has started
making it happen for its other
products. If we look into the present
market scenario, you will find
some recognise Walton as a brand.
We are producing different electronics
products and home appliances,
which have already started
to be exported in small scale.
Now, it is time for the government
to take measures to make our
products familiar with the world
through its commerce wings in different
countries.
On the other hand, the Export
Promotion Bureau (EPB), Bangladesh,
should include the sector
into its expo list to create an opportunity
for the products to display in
the global markets.
How will Walton ensure better
designs and quality products?
Walton has already set up Research
and Development Centre with
highly qualified, skilled and experienced
engineers from home and
abroad. The team of professional
engineers are engaged in product
development as well as ensuring
quality of products.
In addition, the company has
capacity to manufacture multi-layer
motherboard or Printed Circuit
Board (PCB) by most-advanced
SMT Machine at its own factory.
With the help of its research
team, the company always focuses
on innovation to upgrade its product
models and designs to satisfy
customers in comparison with other
brands.
How will you meet the demand for
skilled manpower?
There is scarcity of skilled workforce.
Thus, productivity rate of local
industry’s workforce gets lower
than that of overseas brands. Besides,
mobile phone technology is
entirely a new technology for local
industry, and therefore, risk factor
is very high in terms of technology
transfer.
In order to meet the demand for
skilled workforce, the government
should focus on vocational training.
While the universities need
to prepare their fresh graduates in
such a manner that they can fulfill
the industry needs.
On the hand, through proper
negotiation with developed
countries, the government should
arrange training that will help acquire
knowledge on the latest development
in technologies.
Will the current budget help the
local industry?
For the current fiscal year, the government
has cut duties and taxes
on the import of raw materials and
spare parts to facilitate manufacture
of mobile phones locally.
Undoubtedly, such tax benefit
will encourage local entrepreneurs
to produce mobile phones in Bangladesh,
but I think the government
should provide some extra benefits
to ensure sustainable boom in
handset manufacturing industry in
Bangladesh.
Is the taxation in favour of local
industry?
Though there is a relief on the import
of raw materials, overall taxation
system is not in favour of the
industry.
Currently, the sector has to
pay 35% corporate tax. To attract
more investment, the government
should provide incentives and policy
support for the sector as it is an
emerging industry.
For the sake of local entrepreneurs,
the government should
declare tax holiday at least for
20 years for ensuring sustainable
boom of mobile set industry in the
Courtesy
country.
If mobile phone industry is expanded,
it can meet a larger portion
of demand locally. Thus, Bangladesh
can save a huge amount of
foreign currency, alongside creating
a good number of jobs for the
young generation.
The latest budget has increased
the import duty on handsets from
5% to 10%. What would be the
possible impact of this measure?
Of course, the increase of customs
duty on imported handsets would
raise the prices of the imported
mobile phones, but there is a concern
that some unscrupulous businessmen
might bring mobile sets
through illegal channels.
As a result, the government
would be deprived of huge amount
of revenue while local handsets
lose price competitiveness. Respective
agencies have to be more
careful so that no one can bring a
single piece of handset without
paying the government due taxes
and duties. •

4
Sunday, July 23, 2017
DT
Week in Review
ADB: Bangladesh beats growth forecast
Preliminary government economic
growth estimates in Bangladesh for the
last fiscal beat the forecasts of Asian
Development Outlook (ADO) 2017,
according to an Asian Development
Bank (ADB) report.
In the ADO 2017, published in April
this year, ADB said Bangladesh economy
will grow to 6.9% in the fiscal 2016-
17 but Bangladesh’s gross domestic
product (GDP) growth reached 7.24% in
FY2017, beating all the previous records.
In a supplement to its ADO 2017
report released on July 20, ADB
upgraded its growth outlook in the
region from 5.7% to 5.9% in 2017
and from 5.7% to 5.8% for 2018. The
smaller uptick in the 2018 rate reflects
a cautious view on the sustainability of
this export push.
According to the report, agriculture
growth in Bangladesh in FY2017
was higher than anticipated. Services
growth also outperformed expectations,
supported by agriculture growth
and solid performances in wholesale
and retail trade, real estate, hotels and
restaurants, and transport.
Inflation forecasts for South Asia are
cut to 4.2% from 5.2% in 2017 and to
4.7% from 5.4% in 2018, prompted by
lower increases in Bangladesh, Bhutan,
India, and Nepal.
Bangladesh is experiencing a steady
decline in nonfood inflation, reflecting
favorable international prices, it said.
In Pakistan, growth was similarly
supported by a revival in agriculture,
as well as by continued expansion in
construction and steady growth in
services.
Strong private consumption
remained the largest contributor to
growth. Robust growth in industry and
services lifted growth prospects for
Nepal in FY2017 (ended July 15, 2017),
as did accelerated earthquake reconstruction,
while an improved prognosis
for the important tourism sector is
providing a boost to the Maldives.
These improved prospects for Bangladesh,
Maldives, Nepal, and Pakistan
are balanced by slower growth projected
for Bhutan and Sri Lanka.
The construction of hydropower
projects has been delayed in Bhutan,
undermining economic growth there.
In Sri Lanka, heavy rain caused severe
floods in 15 of 25 districts and triggered
landslides in some areas in May
2017. Disrupted economic activity and
Dhaka Tribune
damage to agriculture will slow growth
in 2017, but subsequent recovery may
boost GDP growth somewhat in 2018.
In India, economic growth slowed
to 7.1% in FY2016 (ended March
31, 2017) from 8% in FY2015. The
slowdown can be partly attributed to
the demonetisation and replacement
of high-denomination banknotes
in November 2016, which affected
economic activity in several cash-dependent
sectors. •
MPS for H2 in
FY’17 fails to
achieve target
The Monetary Policy Statement has
failed to achieve its target in almost all
categories during the second half of
the just-concluded fiscal year 2016-17.
In the performance analysis of
January-June period, it has been noticed
that the credit growth in the
private sector rose only 11% till May
while it was estimated at 16.5%. The
trend shows that the growth won’t
be optimum even in June.
The inflation was stated at between
5.3% and 5.6%, but stood at
5.72% mark during the six months
of FY’17. In terms of Net Domestic
Asset (NDA) growth, it went on the
downswing than estimated. The
NDA only stood at 12.24% while the
target was 17.3%.
Broad money has also failed to
achieve its target of 15%. Till May,
it only achieved 11.69% growth.
Likewise, other categories in the
MPS also followed the suit.
The central bank is likely to
announce its Monetary Policy
Statement (MPS) for the first half
(July-December) of the new Fiscal
Year 2017-18 on July 25. Bangladesh
Bank Governor Fazle Kabir will
announce the MPS.
BB is currently holding talks
with stakeholders and economists
to make the policy more effective
for the country’s future economic
development. •
Bangladesh Bank eyes reducing
remittance fees
Bangladesh Bank (BB) is likely to determine
a low transfer fee for remittance
on July 24 with a view to encouraging
non-resident Bangladeshis (NRBs) to
send more remittances through banking
channel.
The central bank high-ups organised
a meeting with senior officials of top 20
remittance recipient banks to talk over
the issue at its head office on July 19.
BB Executive Director Ahmed
Jamal presided over the meeting while
senior officials from Agrani Bank, Bank
Asia, Brac Bank, Janata Bank, National
Bank, Mercantile Bank and Islami Bank,
among others, attended the event.
Talking to the Dhaka Tribune, one
of the government bank representatives
said: “We met the central bank
authorities to fix a reduced remittance
transfer fee. But today’s meeting was a
preliminary meeting, the final decision
would be taken in the next meeting on
July 24.”
When contacted, Ahmed Jamal declined
to make any comment over the
matter. However, he said they sat with
top 20 remittance receiver banks after
remittance inflows into the country
went down.
Commissions taken by the exchange
Dhaka Tribune
houses abroad increase the cost of
remittance transfer, Ahmed Jamal said
in a meeting with journalists on July 18.
“Bangladesh Bank is concerned
about the declining trend of remittance
flow. The central bank will advise the
banks to cut the remittance transfer
fee so that its flow goes up in coming
months,” he told the meeting.
BB Executive Director Shubhankar
Saha, also the spokesperson of the
central bank, said: “The government
has planned to subsidise the remittance
transfer cost. Moreover, we are
discussing the issue with the remittance
receiving banks to reduce the
remittance fee.”
While talking to journalists after
inauguration of the newly constructed
fountain in Naiyorpul area of Sylhet on
July 8, Finance Minister AMA Muhith
said they would bring down the cost of
remittance transfer soon to increase its
flow into the country.
The tendency of settling abroad is
rising, which is the key reason behind
the less remittance inflow into Bangladesh.
The government will reduce fees
for remittance transfer from next month
to develop the scenario, he said. •
Home loans get siphoned off
for second homes abroad
An unholy nexus of real estate business
tycoons is moving capital out of
the country to find second homes,
deceiving banks and their clients
looking for apartments.
Md Yasin Ali, former Bangladesh
Bank executive director, said that
without using the bank loans drawn
for real estate development, the realtors
siphon off their capital abroad to
build second homes, thus putting the
banks in danger of default and contributing
to the rise of default loans.
“They purchase their new homes
in Western countries like Canada,
USA, Switzerland, also in Malaysia
and Singapore, without paying off the
bank debts,” he said at a round-table
meeting on ‘Home Loan of Banks:
Trend and Impact’ organised by the
Bangladesh Institute of Bank Management
in its auditorium on July 20.
“The developers also deprive their
clients of timely registration of their
long-cherished flats. In most cases,
it so happens that customers keep
chasing after their apartments years
after years while manufacturers lead a
flamboyant life in their second homes,
ignoring the banks’ debts as well as
their clients,” he said.
Yasin said developers sell off their
flats, but do not have them registered
for their owners, because they fail to
pay off their bank loans. He urged the
government to look into this “unholy
practice that throws apartment buyers
into disarray”.
The central bank Deputy Governor
SK Sur was present at the discussion
as the chief guest.
He urged the bank to facilitate
home loans on “easy terms so
middle-income people can dream to
arrange a shelter in the capital”.
He said Bangladesh Bank is
working on a home loans policy which
will help loan seekers get loan on easy
terms.
Home loans in Bangladesh are
mainly regulated by the government
policy and Bangladesh Bank
guidelines. In order to arrest the flow
of credit from banks to unproductive
sectors, banks are also instructed not
to provide any loan/credit facility for
purchasing land.
All scheduled banks are instructed
to refrain from disbursing any loan to
private housing projects which are not
approved by statutory government
organisations. •

Corporate News
5
Sunday, July 23, 2017
DT
AB Bank Limited has recently disbursed a loan (SME) of Tk20 lac to a client of its Bhairab Bazar branch,
said a press release. Governor of Bangladesh Bank, Fazle Kabir has handed over a cheque to the client
in this regard
Dhaka Bank Limited has recently launched an automated and secured LC management solution service
named Dhaka Bank TradeCloud for its corporate clients, said a press release. The bank’s MD, Syed
Mahbubur Rahman and CEO of Hashkloud Pty Ltd, Tarique A Bhuiyan have launched the service
Compliance division and Dhaka central regional office of Pubali Bank Limited have jointly organised
a workshop on AML, ICC, Foreign Remittance, Sanction Screening, Ethical Banking and FATCA, said a
press release. The bank’s additional managing director, Safiul Alam Khan Chowdhury was present on the
occasion as chief guest
Prime Bank Limited has recently disbursed a loan (SME) of Tk15 lac to its client in Kishoregonj, said a press
release. Governor of Bangladesh Bank, Fazle Kabir has handed over a cheque to the client in this regard
National Bank Limited has recently held a workshop on prevention of money laundering and combating
financing of terrorism, said a press release. The bank’s deputy managing director, Shah Syed Abdul Bari
inaugurated the workshop as chief guest
Crown Cement yesterday renowned its agreement with national cricketer Tamim Iqbal Khan as its brand
ambassador for next two years
A seminar was recently held on legal regime at sea and governance of maritime resources for sustainable
blue economy was recently held, said a press release. The seminar was jointly held by Faculty of
Maritime Governance and Policy (FMGP) at Bangabandhu Sheikh Mujibur Rahman Maritime University,
Bangladesh (BSMRMU) and Blue Economy Cell, Energy and Mineral Resources Division, Government of
the People’s Republic of Bangladesh
29th AGM of Federal Insurance held on July 17, 2017
Symphony Mobile has recently handed over prizes to the winners
of its campaign titled Symphony Eid E Offer, said a press release.
The company’s director of marketing, Ashraful Haque was present
on the occasion
Chairperson at University Grants
Commission of Bangladesh,
Professor Abdul Mannan has
recently been honored with
Australian Academy of Business
Leadership (AABL) Award for his
contribution towards promoting
higher education in Bangladesh,
said a press release

6
Sunday, July 23, 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
5,782.5 DSEX 5,782.5 -0.90% 50,795 1,455 116 200 17
(-) 0.90%
CSE ASI 17,936.3 -0.86% 3,038 106 108 166 21
Stocks break four-week winning streak
DSE NEWS
• Tribune Business Desk
Stocks took a nosedive last week
as many investors seen booking
profits from the rally earlier this
month.
The market has stayed vibrant
since Eid holidays and therefore
such minor corrections are inevitable
in stock markets, echoed traders
at several stock brokerage firms.
Participation in the Dhaka
Stock Exchange decreased moderately
by 10.4% to amount an average
daily turnover of Tk1,016cr,
crossing the Tk1,000cr mark for
the third week in a row.
The benchmark index, DSEX
closed at 5,782.5 points on last
Thursday after losing 52.4 points
or -0.90% over the week while
Most Traded Price Weekly change
LankaBangla 55.8 -1.59%
Regent Textile 27.2 -9.63%
Baraka Power 45.1 -1.53%
Fu Wang Food 21.9 -11.69%
Keya Cosmetics 16.6 -8.79%
Doreen Power 146.2 -1.28%
BEXIMCO 33.5 -4.01%
Prime Bank 23.6 -3.67%
SAIF Powertec 45.6 -2.56%
ICB 190.6 0.69%
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.
Euro surge to two-year high prompts stocks pause
• Reuters, London
CSE ASI declined 154.6 points or
-0.86% to end at 17,936.3 points.
Textile equities contributed
14.9% of the week’s total turnover,
said the weekly market report
5,860
5,840
5,820
5,800
5,780
5,760
5,740
The euro’s surge to an almost
two-year high dominated financial
markets on Friday, with most
major stock exchanges consolidating
after a second strong week
of gains while those in mainland
Europe dipped.
Investors seem largely to have
got over a period of jitters spurred
by concerns over the pace of US
economic growth and signs that
several of the world’s major central
banks were determined to
tighten monetary policy soon.
Thursday’s meeting of the
European Central Bank did just
enough to show euro zone policymakers
were on course to rein
in their two-year old emergency
programme of bond-buying without
quite scaring the horses.
The euro surged to its highest
against the dollar since August
2015, but government bond yields
for Europe’s southern governments
fell sharply - a reflection of
relative confidence in the economic
outlook and the cautious line
taken by ECB chief Mario Draghi.
Euro zone stock markets, however,
were lower on the day, with
some analysts worrying a stronger
euro may do more to undermine
growth going forward.
“We can be pretty sure that
when Draghi sat down for his
press conference yesterday the
last thing he expected to see was
the euro hit its highest level in
over two years and for equity
markets to slide back,” said CMC
Markets analyst Michael Hewson.
Dhaka Tribune
of UCB Capital Management Ltd.
Jute Spinning secured the
highest weekly gain of 28.4%
while Bangladesh Welding turned
out the worst loser with its price
MOVEMENT OF DSEX INDEX LAST WEEK
“The strength of the euro does
appear to be acting as a bit of a headwind
for European stocks as they
look to close the week sharply lower,
in contrast to the performance of
UK and US stocks this week.”
The euro gained around 0.2%
on the day in morning trade in
Europe, hitting an almost twoyear
high of $1.1676.
Signs of steady global growth,
which have prompted the ECB
and a couple of other major central
banks to signal future tightening
since last month, have kept
the world’s shares on firm footing.
In Asia, MSCI’s broadest index
of Asia-Pacific shares outside
Japan, which has gained about
5% in the past two weeks, eased
0.2%, dragged down by a fall in
material and financial shares.
declining by -17.6%.
Ifad Autos secured leadership
position on the weekly top turnover
chart with a turnover of Tk-
249cr over the week with its share
price advancing 7.7% by the end
of week.
DS30, the blue-chip index declined
9.4 points or -0.44% to end
at 2,121.8 points, while DSE Shariah
based index lost 13.3 points or
-1.0% to close at 1,313.7 points.
Among the traded issues 116
gained, 200 declined and 17 remained
unchanged during the
week.
The Dhaka Stock Exchange currently
has a market capitalisation
of BDT 390,112cr with the benchmark
index, DSEX up by 14.8%
since beginning of this year. •
DAY 0 DAY 1 DAY 2 DAY 3 DAY 4 DAY 5
Japan’s Nikkei dropped 0.2%.
MSCI’s gauge of stocks across
the globe was steady after rising for
a 10th straight session on Thursday,
its longest such streak since
February 2015. It has advanced
around 3% in the latest rally.
“Strong global growth and (a)
decent earnings outlook are supporting
shares globally,” said Tatsushi
Maeno, senior strategist at
Okasan Asset Management.
US quarterly earnings are expected
to have climbed 8.6%,
above the 8% rise projected at the
start of the month, according to
Thomson Reuters I/B/E/S. About
15% of S&P 500 companies having
posted results so far.
Brent crude futures traded at
$49.31 per barrel, unchanged on
day. •
DBH: Q2 Un-audited – EPS was Tk.
1.73 for April-June, 2017 as against Tk.
1.47 for April-June, 2016; EPS was Tk.
4.76 for January-June, 2017 as against
Tk. 4.09 January-June, 2016. NOCFPS
was Tk. 0.80 for January-June, 2017
as against Tk. (7.36) for January-June,
2016. NAV per share was Tk. 32.73 as of
June 30, 2017 and Tk. 29.62 as of June
30, 2016.
BERGERPBL: Q1 Un-audited – Consolidated
EPS was Tk. 18.40 for April-June,
2017 as against Tk. 22.52 for April-June,
2016; Consolidated NOCFPS was Tk.
10.10 for April-June, 2017 as against Tk.
35.40 for April-June, 2016. Consolidated
NAV per share was Tk. 267.91 as of June
30, 2017 and Tk. 249.51 as of March 31,
2017.
MARICO: Q1 Audited – EPS was Tk. 15.71
for April-June, 2017 as against Tk. 14.17
for April-June, 2016; NOCFPS was Tk.
23.05 for April-June, 2017 as against Tk.
7.32 for April-June, 2016. NAV per share
was Tk. 65.88 as of June 30, 2017 and
Tk. 50.16 as of March 31, 2017.
NATLIFEINS: The Board of Directors
has recommended 20% cash dividend
and 15% stock dividend for the year
ended on December 31, 2016. Date
of AGM: 26.09.2017, Time: 11:00 AM,
Venue: Auditorium, NLI Tower, 54, Kazi
Nazrul Islam Avenue, Karwan Bazar,
Dhaka-1215. Record Date: 08.08.2017.
Q1 Un-audited – Decrease in consolidated
life revenue account for Jan-Mar,
2017 was Tk. 266.08 million with
consolidated total life insurance fund of
Tk. 32,125.55 million as against decrease
of consolidated life revenue account
was Tk. 142.17 million and Tk. 31,211.85
million respectively for the same period
of the previous year.
SHAHJABANK: Q2 Un-audited – Consolidated
EPS was Tk. 0.52 for April-June,
2017 as against Tk. 0.43 for April-June,
2016; Consolidated EPS was Tk. 1.03 for
January-June, 2017 as against Tk. 0.81
for January-June, 2016. Consolidated
NOCFPS was Tk. (0.36) for January-June,
2017 as against Tk. 3.85 for January-June,
2016. Consolidated NAV per share was
Tk. 19.07 as of June 30, 2017 and Tk.
16.56 as of June 30, 2016.
IDLC: Q2 Un-audited – Consolidated
EPS was Tk. 1.62 for April-June, 2017
as against Tk. 1.49 for April-June, 2016;
Consolidated EPS was Tk. 3.34 for January-June,
2017 as against Tk. 2.52 for January-June,
2016. Consolidated NOCFPS
was Tk. 3.75 for January-June, 2017 as
against Tk. (4.68) for January-June, 2016.
Consolidated NAV per share was Tk.
30.47 as of June 30, 2017 and Tk. 23.70
as of December 31, 2016. •

OPINION 7
DT
Sunday, July 23, 2017
Want a brand following? Solve a problem
How Bangladesh can use the problem-solving approach in its garment industry
THE lAST
WORD
• Tim Worstall
The clothing tag on a boy's shirt at a store in Encinitas, California
The validity, the worth, of the brand comes from the worth of that
solution, people associating the value added of the solution with the
name of the brand. That is, a brand is emergent from the activity, not
something created in and of itself
Bangladesh should play off its
already known strengths in the
garment industry and attempt
to capture more of the value in
the entire chain by developing
brands which are sold directly to
a more affluent segment of global
consumers.
So we’re told in a report in this
newspaper and the idea seems just
fine as a general ambition.
The devil, as ever in such plans,
is in the detail. Brands are, for
example, difficult things to create
and expensive too – there are long
lists of western designers who
have tried and then spiralled into
bankruptcy as they failed.
The biggest difficulty perhaps
being that a brand isn’t something
created so much as something
emergent.
In the US the two big long running
brands of soup are Heinz and
Campbells; both started out in the
19th century, at a time when the
new technology of canning wasn’t
entirely understood.
There were a number of distressing
incidents involving people
dying due to badly canned foods:
An entire British expedition to the
Arctic died because of such failures
and we still get the occasional
case of botulism poisoning today
from other manufacturers.
I exaggerate, of course, but not
by much, when I say that the initial
success of Heinz and Campbell’s
comes down to their poisoning
fewer consumers and this becoming
known. Almost to the point
that people would note they’d
been eating the brand for a month,
no one at the table was dead, why
not keep using this brand?
In fact, if we go back one step
further to the mid 19th century in
Britain this really was when brands
started and how.
The newly massive urban populations,
along with a better understanding
of chemistry, had meant
both a demand for and availability
of processed foods that came from
far away farms, and also the ability
to adulterate it in interesting ways.
Those who determined to produce
unadulterated food gained a
reputation and thereby established
their brands. So much so that food
adulteration was pretty much
beaten before the first major laws
against it were enacted in the 1870s.
Food is different from clothing
of course but the basic underlying
lesson still holds. A brand is
emergent from solving some other
problem, not quite something
established just by stating “Look!
I’m a brand!”
Food that doesn’t kill the eater
is solving quite a problem.
Zara, many of whose products
are now made in Bangladesh, really
worked initially by not running
clothing in a “season.” Instead of
four sets of clothes a year there
was a constant stream of designs
through the shops. Perhaps not a
huge change but it was enough to
start that process of brand creation.
Thus, if a brand is to be created,
the question becomes, well, what
is it that is going to be different?
It would be entirely possible to
say: “Look, you’re buying direct,
we pay the workers more,” and
have some people buy your stuff
purely because of that. Fairtrade
works very much along these lines
and that does gain some small
portion of the market.
That’s not, quite, the way to the
bulk market though and that’s the
problem that needs to be solved.
What is it that will be different
so as to create a brand? No, I’m not
an expert in the industry itself so
I’m going to be of no use as to divining
that “what,” but I can point
out that there must be a “what” in
there somewhere.
One idea can be drawn from the
general structure of the European
industry today. Much of the
Inditex etc stock is produced in
Bangladesh, some smaller fraction
of it in Northern Portugal and
Spain. What happens is that the
major orders are placed with you,
then those items which sell out
are produced quickly, at greater
expense, closer to the marketplace.
If production turnaround
times could be reduced, shipping
times improved, then some more
of that Iberian production could be
captured in Bangladesh.
Something I was laughed at for
asking at a BGMEA meet was about
t-shirts. There is a thriving business
in taking Bangladesh-produced
shirts and optimising them for certain
groups. Screen printing them,
embroidering them perhaps, with
a club badge, or “Tommy’s Stag
Trip,” or Vote Jeremy and the like.
The shirts are made in their
thousands in Bangladesh, then
small production runs, perhaps a
dozen, perhaps a score, produced
for each group. That local optimisation
is done locally to the buyers
for no producer in Bangladesh
would ever dream of handling an
order so small.
Well, perhaps that would be one
way to create a brand. Solve those
logistical problems which prevent
a quick turnaround and the creation
of small runs of optimised
products.
It’s equally possible that the
BGMEA people were right to laugh
at my naiveté. That’s not really my
point though. Rather, a brand is
Reuters
created by solving some problem.
The validity, the worth, of the
brand comes from the worth of
that solution, people associating
the value added of the solution
with the name of the brand. That
is, a brand is emergent from the
activity, not something created in
and of itself.
It’s entirely true that creating
brands which operate directly
from Bangladesh will increase the
amount of the value in the garment
trade operating chain which
is captured by Bangladeshis. But
the creation of the brand itself is
through solving some problem
that others have not as yet.
When food kills people, making
food that doesn’t kill seems like
a pretty good method of brand
establishment. But with clothing,
finding that problem to solve
might be a little more difficult.
Then again, it is still true that
the next successful brands will
be those that solve some problem
that no one else is solving at
present. The value of the brand,
and thus the margins that can be
charged for it, will depend upon
the value to consumers of that
problem being solved.
Hopefully, one or some of you
will manage to do it. •
Tim Worstall is a Senior Fellow at the
Adam Smith Institute in London.