Business Supplement Issue-27

DT
VOL1, ISSUE 27 | Sunday, August 27, 2017
Business Tribune
Home loan market
booms as interest
rates plummet
Rajib Dhar
6
Stocks rebound as
selling pressure eases
Why the interference and
7 what’s the hold up?

2
Sunday, August 27, 2017
DT
Special
Home loan market booms as interest
rates plummet
• Ibrahim Hossain Ovi and
Shariful Islam
Home provides a sense of security.
It is an address, a shelter for
one’s entire life, and this is what
one leaves behind for the family.
Everyone dreams of owning a
home, but how many people can
afford it? The savings and financial
management involved in buying or
building a home are often long and
complicated.
Another way to avail a home is
through home loans. Banks and
other financial institutions offer
loans of single digit interest rate
to people looking to realise their
dreams.
Private, state-owned and foreign
commercial banks, specialised
housing finance providers Bangladesh
House Building Finance
Corporation (BHBFC), Delta-Brac
Housing (DBH), National Housing
Finance (NBH), other non-bank financial
institutions (NBFIs) and micro
credit lenders offer home loans.
Some employers such as the government
offer home loans as well.
The interest rate for home loans
is a minimum of 8% and a maximum
of 15%, while the loans can range between
two lakh to Tk1.2 crore.
The minimum debt-equity ratio
spans between 10:90 and maximum
50:50. Most of the banks
provide loans at debt-equity ratio
of 30:70 for locals and 25:75 for expatriates.
The banks that provide clients
with single digit rate home loans include
IFIC Bank, Brac Bank, Standard
Chartered Bank, and financial
institutions IDLC and Bangladesh
House Building Finance Corporation
(BHBFC), among others.
Thanks to the single digit interest
rate, the country’s banking sector
has seen a surge in home loans
in recent times.
According to a study of Bangladesh
Institute of Bank Management
(BIBM), as of June 2016, a total
of Tk56,290 crore was disbursed
in home loans, 9.1% of the total
credit to the private sector.
BIBM Director Prof Mohiuddin
Siddique, Associate Prof Md Alamgir
and Dr Md Tajul Islam authored
the report.
The report showed that of the
total disbursed home loans, private
commercial banks provided the
largest portion - 55% or Tk30,920
crore - followed by state-owned
banks - Tk11,930 crore.
“Intense competition among
the banks in attracting home loan
borrowers has already lowered the
interest rate to a single digit,” the
report said.
It also said: “The ongoing emphasis
on home loans by the banks
TREND OF HOME LOANS IN BANGLADESH
Figure in Taka, crore
Source: BB
FY05 8,680
9,919
FY06
12,342
FY07
13,614
FY08
may be partially attributed to the
accumulation of excess liquidity in
the banking industry. A persistent
increase in per capita income coupled
with the availability of loanable
fund certainly will make the
housing finance a potential venue
for making profit in future.”
Moreover, a home loan is relatively
safe for a bank in comparison
to a business-focused loan, according
to the research findings.
The report showed the default
loans in home loan are low due to
good recovery rate, as only 3.12%
of the loans were defaulted in 2016.
Talking to the Dhaka Tribune,
Mohammad Sarwar Jahan, principal
officer of LankaBangla Finance
Limited, said: “Till now, we have
disbursed around Tk1,000 crore to
around 2,000 clients and 70% of
them are from Dhaka city and rest
are outside the capital.”
IFIC Bank, which began financing
home building a year ago, aims
to disburse Tk1,000 crore home
loan by this year and the bank has
already disbursed Tk400 crore in
the first half of 2017.
Shah A Sarwar, managing director
(MD) of the bank said: “Clients
usually refrain from buying flats
due to high interest rate of home
loan. We are getting good response
after offering home loans with single
digit interest rate.”
IFIC Bank is now providing clients
housing loan with 9.99% interest
rate. It was 11.95% when the
bank first introduced the loan.
“Though many banks are offering
home loans with a single digit
interest rate, the high interest rate
17,072
FY09
21,652
FY10
28,030
FY11
35,200
FY12
is still a constraint for home loans,”
said Abrar A Anwar, chief executive
officer of Standard Chartered Bangladesh.
He said: “The interest rate
should be reduced further to make
home loans more affordable and a
bond market should be developed
to collect funds for long-term financing
like home loan.”
BIBM supernumerary Prof Helal
Ahmed Chowhdhury said: “If the
provision of home loan is lowered
to 1% from the existing 2%, bankers
would be interested in disbursing
more loans and a level playing field
could be ensured.”
Home loans in Bangladesh are
regulated by government policy
and Bangladesh Bank guidelines.
In order to arrest the flow of credit
from banks to unproductive sectors,
banks are also instructed not
42,090
FY13
44,050
FY14
48,640
FY15
Private banks
56,290
FY16
SHARE OF HOME LOAN PROVIDERS IN 2016
8%
4%
12%
21%
55%
Non-bank financial
institutions
Foreign banks
Specialised housing
finance institutions
State banks
Source: BB
to provide any loan or 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.
Now, the central bank is developing
a guideline to make the home
financing schemes more affordable
for the middle class, said BB Deputy
Governor SK Sur Chowdhury.
He said: “Though the banks
operate their businesses depending
on the deposits from the middle-class
people, they make it harder
for middle-class people to avail
loans. That is why Bangladesh Bank
is preparing a guideline to make the
home financing schemes more affordable
for the middle class.”
BIBM Director General Dr Toufic
Ahmad Choudhury said: “A home
is a shelter of an individual and as
such, there should be more flow of
credit disbursement on easy terms
in this sector.”
He also stressed the importance
for taking this loan to rural areas.
Bangladesh House Building Finance
Corporation, the state-run
housing finance body, has disbursed
home loan of Tk375 crore in
the last year and aims to disburse
home loan around Tk400 crore.
Islamic Development Bank
(IDB) has recently approved a loan
of $95.24 million for rural and
peri-urban housing finance project
in Bangladesh.
BHBFC Managing Director Debasish
Chakrabarty said: “We will
disburse the loan only to borrowers
living outside Dhaka and
Chittagong metropolitan areas for
construction of multi-storied residential
buildings.”
He said under the project, a total
of 1,046 buildings will be erected to
accommodate 47,856 people.
The loan would be disbursed
under ‘Pallima Scheme’, a newly
launched scheme of the corporation.
Loans would be distributed to
construct 4,050 units in rural areas,
2,825 units in peri-urban areas and
1,101 units for non-resident Bangladeshis
(NRBs), said Debasish.
He also said one could take loan
up to Tk60 lakh while the interest
would be 8.5%.
“We would take the house
building culture to urban, peri-urban
and even to those municipality
areas which are not under the project.
We would like to provide lowcost
home financing for low-income
rural people as part of project
assistance.”
The BHBFC will hold the ‘Housing
Financing Fair 2017’ to disseminate
information on the housing
sector. A total of 82 organisations
will participate in the fair to be held
at Hotel Sonargaon from October
19-21.
A private service holder, Arifur
Rahman, 45, told the Dhaka Tribune:
“It was quite impossible for
me to dream for my own home
with my salary. But as banks have
lowered interests, I am planning to
buying a flat.”
Beware of hidden charges
Abdur Rahman, a government official,
who bought a flat taking a
home loan from a private bank,
said: “I have taken a home loan of
Tk80 lakh and bought a flat. When
receiving the loan, the bank did
not inform me about the hidden
charges; they only informed me
about the interest. But now I am
paying the credit, they are charging
Tk50,000 extra by the name of several
charges.” •

Interview
3
Sunday, August 27, 2017
DT
Our goal is to ensure low-cost housing
facilities in rural areas
The state-run Bangladesh House Building Finance Corporation (BHBFC) has long been working
towards ensuring affordable housing facilities for all. Its main focus is now on making the facilities
available at lower costs to all beyond the country’s two major cities: Dhaka and Chittagong. In an
exclusive interview with the Dhaka Tribune’s Ibrahim Hossain Ovi and Shariful Islam, BHBFC
Managing Director Debasish Chakrabarty shares their initiatives and plans to make the housing
facilities more accessible and customer-friendly
Real Estate and Housing Association
of Bangladesh (REHAB) claims
that they are also working towards
ensuring affordable apartments
for all. What are the differences
between the initiatives taken by
BHBFC and REHAB?
REHAB [a platform of realtors] focuses
on profit maximisation, but
our objective is to ensure housing
facilities for all at lower costs. While
they [realtors] tend to concentrate
in Dhaka, our target is to provide
low-cost housing facilities to the
people living outside urban areas.
Since real estate companies are
concentrated in urban areas, we
are increasingly focusing on rural
areas. This is why our interest rates
for Dhaka and Chittagong cities are
higher than those for rural areas.
We will reduce the rates further.
How can the process of
handing flats over to buyers be
accelerated?
Generally, realtors take three to
five years’ time to hand over a flat
to its buyer. They should come out
of this mindset and concentrate on
a first-track construction method.
Also, we talked to the REHAB
about technology and equipment
needed to expedite the construction
process so flats and projects
can be handed over to their owners
within the stipulated time.
We have decided to send a team
to Malaysia to gain expertise in the
handling of advanced construction
technology and equipment. Some
of the REHAB members may join
the team.
While some banks offer home
loans at 8.5%, why are the people
opting for BHBFC loans?
People have trust in us as there are no
hidden charges. This is because buyers
prefer our offers to bank loans.
Home loans from banks and
non-banking financial institutions
are available only in Dhaka and
Chittagong. But, the government’s
vision is to ensure housing facilities
for all by 2021. Over 80% of the
total population live in rural areas
and we have to make housing facilities
available in the areas as well in
order to materialise Vision 2021.
Our competitors are doing well.
The corporation could not duly
perform its duties. We have, however,
taken lots of initiatives including
building new apartments
and reducing interest rates.
What measures have you taken to
provide low-cost housing facilities
beyond Dhaka and Chittagong
metropolises?
If you look around Dhaka city, you
will find that the land for housing
is decreasing day by day due to the
rapid influx of people. This is because
our emphasis is on building
houses in rural areas.
For Dhaka and Chittagong cities,
we have reduced interest rate
to 9.5% from 12%, while the rate is
8.5% for other parts of the country,
especially at the district level.
Moreover, Islamic Development
Bank (IDB) has recently announced
a $95.24m loan for a rural and
peri-urban housing finance project
in Bangladesh.
We will disburse the loan only
among borrowers living outside
Dhaka and Chittagong metropolises
for construction of multi-storey
residential buildings. Under the
project, a total of 1,046 buildings
will be constructed to accommodate
some 47,856 people. The loan
will be disbursed under the “Pallima”
scheme, a newly launched
scheme under which one could
borrow a maximum of Tk60 lakh
with an 8.5% interest rate.
We came to know that BHBFC has
never suffered any loss since its
inception in 1952. Would you tell
us about its current performance?
In the last fiscal, BHBFC disbursed
Tk353 crore. Of the amount, 67%
was given to people living outside
Dhaka and Chittagong. We are set to
disburse Tk400 crore this fiscal year.
After getting the IDB credit, we set a
target to disburse around Tk20,000
crore in the next two years.
We have so far given loans for
construction of 200,000 housing
units, earning the BHBFC a Tk166
crore profit in the last fiscal year.
Tell us something about the loan
recovery rate
Our loan recovery rate is very good.
It was 93% in the last year. We have
inked a deal with Standard Chartered
Bank to make instalment
payments even easier and more
customer-friendly. Under the new
system, the payments can be deposited
through Electronic Fund
Transfer, and Standard Chartered
Bank will work as mediator. Client
will get a text message in his or her
phone right away after the fund is
deducted from their accounts.
What types of loan package do you
offer now?
We are offering four packages:
Home Loan for Expatriate Bangladeshis,
Rural House Loans, House
Development Loan, and House
Repair Loan. Also, we intend to introduce
a new package under the
name “Farmer’s Home Loan.”
Which package is in high demand?
Among them, the Home Loan for Expatriate
package is in high demand
as most of the expatriates have both
land and cash in their hand.
As the money and land do not
always suffice to purchase a flat or
to construct a building, the loans
largely help them maximise their
remittances that, in turn, help
them either in their primary investment
or in instalment payment.
Given all these aspects, we have
labelled the package “Probash
Bondhu” under which a borrower
can get a loan at a 9% interest
rate with a repayment tenure of 25
Mahmud Hossain Opu
years, and we will provide 70% of
the total cost and the rest has to be
arranged by the client himself.
What difficulties are you facing in
managing the corporation?
The problems I face include small
human resources and lack of adequate
branches to render services to
clients. To resolve the problems, we
have sent a proposal to the ministry
concerned and are hopeful that it
will soon approve the proposal.
There are only 29 branches
across the country. Of them, 14 are
in Dhaka. There will be 71 more
branches if the ministry approves
the proposal.
What are your plans for the
organisation? Where do you want
to see it in the future?
As I mentioned earlier, realtors are
focusing on making their own profits.
We want to construct flats so
apartment prices go down further. If
the government gives us khas land,
we will construct buildings there and
sell the people flats at lower prices.
Getting a building design approved
is a very complicated task.
Many do not know how to get a
design approved and by whom. In
this connection, we are planning
to introduce a low-cost-and-time
consuming mechanism as used in
the developed world. We talked to
people who are using the Kotoko
system [an advanced construction
mechanism]. We are planning to
launch banking services.
Clients often say they face lots of
hurdles when applying for home
loans. What steps are you taking to
simplify the process?
Clients face hassles because many
of them do not properly know how
to apply for a home loan and what
documents they need to submit.
We are taking several initiatives
to help them in the process.
We have, for instance, prepared a
checklist of loan application documents,
which is available on our
website as well as Facebook page.
To disseminate information
about our services and advanced
housing technologies, the BHBFC
will organise its first ever “Housing
Financing Fair 2017” at Hotel Sonargaon
in Dhaka from October 19-21. •

4
Sunday, August 27, 2017
DT
Week in Review
Export: Bangladesh yet to fully tap
Asian markets
Bangladeshi exports to Asian countries
are still low due to absence of proper
preferential trade agreements and
quality products, even though there are
huge trade opportunities in the region.
Exporters and trade analysts say
that removing non-tariff barriers, signing
trade-friendly bilateral agreements
and proper usage of preferential trade
deals can boost Bangladesh’s exports
to the region.
They also said that high dependency
on developed countries in North
America and Europe could risk export
earnings.
According to Export Promotion
Bureau data, Bangladesh’s exports to
Asian countries were worth $4.16bn
in FY2016-17, which is 12% of total
exports.
At the same time, European Union
(EU) imported 55.83% ($19.35bn) of
Bangladesh’s total exports and the
United States 21.19% ($7.34bn).
For a developing country, Bangladesh
has made remarkable progress as
an exporter of manufactured goods,
especially readymade garments, but
it’s highly reliant on the markets of
developed countries.
The export basket is dominated
by the readymade garment (RMG)
sector, which accounts for over 80%
of total exports, followed by several
other products including agricultural
products, frozen food, jute and jute
goods, and leather.
In the last fiscal year, against a target
of $37 billion, Bangladesh’s overall
export earnings stood at $34.83bn,
which is 1.68% higher than the previous
year’s $34.25bn. Of the amount,
the RMG sector alone earned $28.15bn.
Bangladesh has set an export target
of $37.5bn for the current FY2017-18,
which is a 1.35% rise from last year.
“Since there is an economic meltdown
in traditional export destinations
like Europe and the US, Bangladesh will
Dhaka Tribune
have to find new markets. Grabbing
more Asian markets can help reduce
dependency on the developed
countries or a certain region,” AB Mirza
Azizul Islam, former finance adviser
to a caretaker government, told the
Dhaka Tribune.
“With the similarities in culture and
taste, the markets of some of the Asian
nations can help Bangladesh boost its
export sector,” he added.
Asia’s population is 4.47 billion,
which is 59.6% of the global total.
China is the most populous nation in
Asia with about 1.38 billion followed by
India with 1.32 billion.
“Bangladeshi apparel products
are sold in China, Japan, Indonesia
and some other countries, but not all
of that is exported directly. International
buyers buy and import from us
and then sell the products in these
countries with their brand,” Exporters
Association of Bangladesh President
Abdus Salam Murshedy told the Dhaka
Tribune.
Since there are non-tariff barriers
in the way of exporting to these countries,
the government should take initiatives
to sign deals to remove them,
said Salam, also managing director of
Envoy Group.
Even though over $1bn worth of
products were exported to Japan in
the last FY, the market there is yet to
be tapped fully as the island nation is a
market for high-end products, a level
Bangladesh has not reached yet, he said.
But, Salam added, the exporters
would enter the high-end markets
soon and Bangladeshi exports in the
Japanese and other South Asian markets
will increase in near future.
Moreover, non-tariff barriers,
location issues, countervailing duty
and anti-dumping duty on jute and
jute goods by Indian government are
also major obstacles for Bangladeshi
exporters. •
Muhith: One
house one farm
project to close
by 2021
Finance Minister AMA Muhith has
said the One House One Farm
project will be closed within 2021
while the Palli Sanchay Bank will
remain open.
He made the above statement
at the inauguration of the online
portal of Palli Sanchay Bank at his
secretariat office on August 24.
Senior Secretary of Finance Division
Hedayetullah Al Mamun, Senoir
Secretary of Financial Institutions Md
Eunusur Rahman, Chairman Palli Sanchay
Bank Dr Mihir Kanti Manjumdar
and others also spoke at the event.
Mihir Kanti said: “No bank gives
any loan with 8% interest rate. But
the Palli Sanchay Bank does. The
bank also provides seasonal loans.”
He also added that this specialised
bank will set up branches in the
future at the union level. •
Vegetable prices soar as
floods damage farmland
The prices of vegetables have skyrocketed
in the city’s kitchen markets as
the monsoon floods devastated large
areas of farmland.
Of them, the prices of onion have
risen almost 100% from a month ago.
The vegetable was selling at between
Tk50 and Tk55 per kilogram at different
city markets on August 21, up from
Tk30-35 in late July.
Prices of garlic, ginger including different
spices and vegetables including
eggplants, pointed gourd, brinjal also
increased while the Eid-ul-Azha, one
of the biggest Muslim festivals, is only
a few days away.
The retails said they were facing
supply shortage due to floods, resulting
in the price hikes.
“Farmlands have been damaged by
the floods in different parts, which has
contributed to the surge in vegetable
prices,” Tofazzal Hossain, a vegetable
vendor at Karwan Bazar, told the
Dhaka Tribune.
Trading Corporation of Bangladesh
said the supply crunch of vegetables
due to the deluge heat up the kitchen
markets in Dhaka and elsewhere in the
country and increased the prices of essentials
up to 102% in August from July.
Onion prices shot up by 90-102%,
15 kinds of vegetables by 50-100%,
chili by 110%, garlic by 20%, riverine
fish except Hilsa by 20-30%, local
chicken by 10%, cardamom by 8%
and cinnamon by 5% on August 18
than the previous weeks, according
to the data of TCB and Department of
Agricultural Marketing (DAM). •
Bangladesh looks
to Free Trade deal
with Turkey
A MoU for Free Trade Agreement
(FTA) was signed with Turkey on
August 23 at the Turkey-Bangladesh
Business Forum – 2017.
FBCCI’s First Vice President
Sheikh Fazle Fahim and Turkish
Exporters’ Assembly member of
sector council Basaran Bayrak
signed the agreement.
Speaking at the forum, Commerce
Minister Tofail Ahmed said:
“Bangladesh is very interested to
sign the FTA with Turkey which will
increase trade and commerce.
According to the EPB data, in
last fiscal year, Bangladesh exported
$631.63 million worth of goods to
Turkey; while Bangladesh imported
goods and services worth $212.30
million from Turkey.
“Since the tariff rate is very high for
Bangladeshi products entering into
the Turkish market, I hope, the FTA
will open a new window of economic
opportunities for two countries.
“The bilateral trade is currently
worth $843.93 million. The signing
of the FTA would help boost the
export of RMG, pharmaceuticals,
frozen fish, dry food, jute and jute
products, leather, plastic and ceramic
products, ship building and light
engineering products to Turkey. •
Government report proposes
3.5% interest subsidy on
home loan for civil servants
A proposal for new home loan facilities
for civil servants will make the banking
and real estate sectors more vibrant,
according to a draft report submitted
to the Finance Division recently.
The report suggests that the government
provides an annual interest
subsidy of Tk700 crore to Tk980
crore on home loan allocations.
Of the subsidies, 3.5% interest will
be borne by the government and 5%
by civil servants. Under the proposal,
the maximum ceiling for home loans
will rise to Tk75 lakh and the total loan
amount will be Tk20,000 crore to
Tk28,000 crore.
“Since the banking and real estate
sectors are not in a good shape, the
investment by around 2.1 million civil
servants will rejuvenate the sectors,” a
Finance Division official said, requesting
anonymity.
Civil servants who have only 15
years to serve will enjoy the government
home loan facilities.
“The government hopes that corruption
among civil servants will drop
significantly if they own an apartment
as they retire,” the official said.
An official in the Finance Division
said a committee formed in August
last year recommended an 8% interest
rate on the loan, of which 3.5%
interest subsidy will be provided by
the government while borrowers will
repay the rest.
The sub-committee recommended
a total interest subsidy of Tk950
crore, the official told the Dhaka
Tribune. He added that the county’s
banking sector currently has an
amount of Tk130,000 crore in “idle
money”.
Rehab vice-president Liaqat Ali
Bhuiyan said the idle money in the
banks should be used for building
homes for state employees.
“If the government provides land
at low price, realtors will offer 600-
700 square feet apartments at up to
Tk20 lakh for civil servants,” he said.
The Finance Division’s final report
will be submitted to the cabinet committee
for its consent to implement
the policy.
The proposal was recently submitted
to the Finance Division Additional
Secretary Nazmul Sheikh, but he did
not agree with the sub-committee
proposal, terming it “illogical”. •

Corporate News
5
Sunday, August 27, 2017
DT
Bangladesh House Building Finance Corporation (BHBFC) is going to organise a three daylong fair titled,
Housing Finance Fair 2017 on October 19 at a hotel in Dhaka, said a press release. The corporation’s
managing director, Debasish Chakrabarty made the announcement at a press conference
BRAC Bank Limited has recently made a contribution to the Prime Minister’s Relief and Welfare Fund to
help people affected by flood across the country. BRAC Bank Director SN Kairy hands over a cheque of
Tk3 crore to Prime Minister Sheikh Hasina
First Security Islami Bank Limited has recently donated Tk3 crore to the Prime Minister’s Relief and
Welfare Fund for people affected by flood. The bank’s vice-chairman, Mohammed Abdul Maleque and
incumbent Managing Director Quazi Osman Ali hand over the cheque to Prime Minister Sheikh Hasina
Islami Bank Bangladesh Limited has recently donated Tk5 crore for flood victims to the Prime Minister’s
Relief and Welfare Fund for people affected by flood. The bank’s vice-chairperson, Md Shahabuddin,
hands over the cheque to Prime Minister Sheikh Hasina
National Bank Limited has recently donated Tk3 crore to the Prime Minister’s Relief and Welfare Fund
for people affected by flood. The bank’s Directors, Rick Haque Sikder and Ron Haque Sikder along with
Directors of Sikder Group, John Haque Sikder and Sean Haque Sikder, are seen during the handover of
cheque to Prime Minister Sheikh Hasina
LankaBangla Finance Ltd (LBFL) has recently signed an agreement with DHS Motors Limited (HONDA)
in order to provide its customers with special discounts on purchases from DHS Motors. Head of Retail
Finance at LBFL Khurshed Alam and DHS Motors GM Md Mukhlesur Rahman signed the agreement
Social Islami Bank Limited has recently made a donation to Bangladesh Thalassaemia Hospital. The
bank’s additional Managing Director, AMM Farhad, hands over a cheque to the hospital’s advisor, Syed
Deedar Bakth
NRBC Bank has recently signed an agreement with Labaid Group on providing its VISA cardholders with
discounts on several facilities of Labaid Group companies. The bnak’s Executive vice-president, Kazi
Safayet Kabir, and Labaid Chiep Operating Officer Al Emran Chowdhury signed the agreement
Southeast Bank Limied has recently provided financial support of Tk6 lakh to the family of Late Shaikh
Sirajul Hoque, former officer-in-charge at Uttarkhan Police Station. The bank’s Managing Drector, M Kamal
Hossain, hands over the cheque to Monjila-Tul-Ferdousi, wife of the police officer
Mercantile Bank Limited has recently donated Tk3 crore to the Prime Minister’s Relief Fund for people
affected by flood. The bank’s Chairperson, AKM Shaheed Reza, and Mercantile Bank Foundation
Chairpersona Shahidul Ahsan hand over the cheque to Prime Minister Sheikh Hasina

6
Sunday, August 27, 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
5,885.4 DSEX 5,885.4 0.41% 41,643 1,154 176 140 17
(+) 0.41%
CSE ASI 18,260.6 0.33% 2,271 84 138 120 27
Stocks rebound as selling pressure eases
• Tribune Business Desk
Most Traded Price Weekly change
BBS Cables 134.0 2.5%
BBS 53.5 10.8%
LankaBangla 58.3 6.8%
Fortune Shoes 55.2 1.1%
ACI 553.0 8.0%
RSRM Steel 84.1 10.1%
Keya Cosmetics 15.1 -6.8%
IFAD Autos 158.8 -1.5%
C&A Textiles 13.4 2.3%
IDLC 82.1 5.1%
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Global stocks heading for best weeks
• Reuters, London
World stocks climbed toward
their best week on Friday, as a
near three-year high in emerging
market shares and a roaring rally
in metals bolstered the year’s
global bull run.
Moves were mainly small
ahead of speeches later by Federal
Reserve and European Central
Bank heads Janet Yellen and Mario
Draghi at one of the highlights of
central banking calendar, the Jackson
Hole, Wyoming, symposium,
but there was some traction.
Stock market took a breather last
week as selling pressure seen easing
up ahead of Eid festival.
Many investors are considering
the recent sell-off as an opportunity
to take position in fundamental
stocks, echoed traders at
several stock brokerage firms.
The benchmark index, DSEX
closed at 5,885.4 points on Thursday
with a weekly gain of 24.3
points or 0.41% over the week
while CSE ASI declined 60.9 points
or 0.33% to end at 18,260.6 points.
Participation in the Dhaka
Stock Exchange remained stable
during the week with an average
daily turnover of Tk833cr against
previous week’s Tk815cr.
Three sector, namely Engineering
(22%), Banking (15%)
and Pharmaceuticals (14%) have
contributed half of the total turnover
this week, showed the weekly
market report of UCB Capital
Management Ltd.
The blue-chip index DS30 advanced
2.3 points or 0.1% to end
at 2,111.3 points, while DSE Shariah
based index gained 1.4 points
or 0.1% to close at 1,305.6 points.
Among the traded issues 176
gained, 140 declined and 17 remained
unchanged during the
week. Monno Ceramic Ltd secured
the highest weekly gain
of 41.9% while GQ Ball Pen Ltd
turned out the worst loser with its
price declining by 7.9%.
BBS Cables Limited secured
leadership position on the weekly
top turnover chart for the second
week in a row with a turnover of
MOVEMENT OF DSEX INDEX LAST WEEK
5,900
5,880
5,860
5,840
5,820
5,800
5,780
European shares overcame
an early wobble after reassuring
business confidence data from
Germany and as the week’s 3 and
7% rises in metals copper and
nickel gave the region’s miners a
4% weekly gain.
London’s FTSE, which has a
heavyweight mining contingent,
led the way with a 0.4% rise on the
day and 1.5% for the week. It was
also being boosted by the fourth
straight weekly drop in the Brexit-bruised
pound, which helps internationally-earned
profits.
Fast charging emerging markets
helped Asia secure a 1.6%
weekly rise, while Wall Street
looked set to open higher despite
a rumbling row for Donald Trump
as the United States approaches
its self-imposed government debt
limit.
“Our current assessment of
the overall risk and reward picture
keeps us overweight global
equities in our tactical asset allocation,”
UBS Wealth Management
chief investment officer, Mark
Haefele, said in a monthly note.
“Earnings and economic
growth are strong enough, and
Dhaka Tribune
Tk244cr over the week with its
share price advancing 2.5% by the
end of week.
The Dhaka Stock Exchange currently
has a market capitalisation
of BDT 397,042cr with the benchmark
index, DSEX up by 16.9%
since beginning of this year. •
DAY 0 DAY 1 DAY 2 DAY 3 DAY 4 DAY 5
central bank policy is still sufficiently
loose to suggest that, in
the absence of a shock, markets
are likely to trend higher over the
next six months.”
Emerging markets have been a
strong driver of the global stocks
rise this year.
MSCI’s 24-country EM index hit
a near three year high on Friday.
Asia-Pacific shares ended the week
1.6% higher, having shrugged off
the overnight dip on Wall Street
as a rift between Trump and Congress
over the country’s debt level
rumbled on. •
DSE NEWS
APEXTANRY: The Board of Directors
has recommended 40% cash
dividend for the year ended on June
30, 2017. Date of AGM: 25.09.2017,
Time: 10:00 AM, Venue: Bangladesh
Shooting Sports Federation, Gulshan-1,
Dhaka-1212. Record date: 10.09.2017.
The Company has also reported EPS
without fair valuation surplus of Tk.
2.95, NAV per share of Tk. 73.56 and
NOCFPS of Tk. 2.50 for the year ended
on June 30, 2017 as against Tk. 6.00,
Tk. 74.38 and Tk. 3.08 respectively for
the same period of the previous year.
FAREASTLIF: The Board of Directors
has recommended 15% cash and 20%
stock dividend for the year ended on
December 31, 2016. Date of AGM:
22.10.2017, Time: 10:30 AM, Venue:
Fareast Tower, 35 Topkhana Road, Dhaka-1000.
Record Date: 21.09.2017.
BSCCL: The Board of Directors has
recommended 12% cash dividend for
the year ended on June 30, 2017. Date of
AGM: 07.10.2017, Time: 11:00 AM, Venue:
SMW-5 Submarine Cable Landing Station,
Alipur, Kuakata, Patuakhali. Record Date:
20.09.2017. The Company has also
reported EPS of Tk. 1.93, NAV per share of
Tk. 36.44 and NOCFPS of Tk. 1.20 for the
year ended on June 30, 2017 as against
Tk. 1.00, Tk. 33.95 and Tk. 1.76 respectively
for the same period of the previous year.
RELIANCE1: The Trustee Board of the
fund has declared 10% cash dividend
based on Net Income for the year
ended on June 30, 2017 and considering
previous Retained Earnings. Record
date: 18.09.2017. The Fund has also
reported EPU of Tk. 0.92, NAV per unit
at market price of Tk. 14.07, NAV per
unit at cost of Tk. 11.55 and NOCFPU of
Tk. 0.89 for the year ended on June 30,
2017 as against Tk. 0.69, Tk. 12.06, Tk.
11.65 and Tk. 0.71 respectively for the
same period of the previous year.
ZAHEENSPIN: The Board of Directors
has recommended 15% stock dividend
for the year ended on June 30, 2017.
In line with the previous resolution adopted
in the EGM held on July 16, 2017,
the revised Rights offer would be for
98,552,700 ordinary shares of Tk. 10.00
each at an issue price of Tk. 10.00 each
per share totaling Tk. 985,527,000.00
offered on the basis of 1:1R i.e. 1 rights
share for 1 existing share held on the
record date for entitlement. Fund to
be raised through Rights issue will be
utilized for the following purposes: A)
Expansion of the Existing Project Tk.
766,027,000.00; B) Working Capital Tk.
150,000,000.00; C) Partial Repayment
of Term Loan Tk. 50,000,000.00;
D) Rights Issue Expenses (approx) Tk.
19,500,000.00. •

OPINION 7
DT
Sunday, August 27, 2017
Why the interference and what’s
the hold up?
THE lAST
WORD
• Tim Worstall
Adam Smith pointed out that we
really need to do very little, or rather
get government to do very little,
to enable economic development.
A bit of public justice light taxes
to pay for that and everything else
will just happen on its own.
Of course, we’re all more
sophisticated these days, we do
understand that there’s more than
just this which government should
be doing in order to push along
that entirely desired process of us
all getting richer.
However, we should also
recall that not really entirely and
wholly a joke, which is that all of
economics is either a footnote to
Smith or wrong. To extend a point
that Smith made is therefore fine,
but to come up with something
contrary means that we’re at high
risk of error.
At which point, what Smith
actually said about development:
“Little else is requisite to carry
a state to the highest degree of
opulence from the lowest barbarism,
but peace, easy taxes, and a
tolerable administration of justice;
all the rest being brought about by
the natural course of things.”
That’s a good starting point but
as I say, we tend not to think of
Smith these days as being the end
point, rather something capable
of elaboration. One other way to
think of the same point is that
there are many things that must be
done. There are also somethings
that can only be done by the government.
As it happens, there’s also a
subset of both of those things
which must be done and which
can only be done by the government.
That peace, that administration
of justice, certainly. And given
that taxes are the cost of gaining
those things we’d like those costs
to be low.
So far so good, but as the International
Chamber of Commerce
– Bangladesh points out:
“In order to step into higher
growth trajectory, Bangladesh
urgently needs to overcome the
hurdle of project implementation
delays, reduce an average number
of days required for contract
enforcement, and improve port
facilities…”
Government must indeed do some basic things which need to be
done and which only government can do. And really our major
complaint is that government should do them better, rather than
as they do them today
Contract enforcement is just
that tolerable administration of
justice when applied to civil and
commercial procedures, rather
than criminal and thus is very
much a government necessity.
It’s the ability of people to go to
a court and shout “Oi! He said he
would do this and he hasn’t!” and
then get someone to force the
agreement to be complete.
The other two are a little different
and this is where the important
distinctions start to come in.
Why, for example, might there be
delays in implementing a project?
Imagine we want to put up a building,
we’ve got the land, we know
who can make concrete, there are
enough builders around, right, off
we go, correct?
Ah, no, that’s not how it happens
in any place at all. There are
a number of permissions that are
needed. Sometimes these are entirely
sensible of course, we’d not
like another Rana Plaza to be built
to then come down again.
But in every real estate market
in the world the biggest complaint
is how long it takes to gain that
government approval. One of
President Trump’s party pieces
over in the US is to unroll a hugely
long scroll detailing why it takes
10-20 years just to get permission
to build a road.
Permissions from 17 agencies,
under 29 different statutes, that’s
just the Federal government,
there’s the state ones to deal with
as well. This is why President
Obama’s idea of building infrastructure
– a good idea in standard
macroeconomics – to beat the
effects of the crash and recession
didn’t go so well. They had $800
billion to spend but they couldn’t
actually find any infrastructure
projects to build. Any and all of
them would have taken years just
to get the permissions.
That is, while we agree that permissions
are and should be needed,
we’d rather like the government
to be rather more efficient at
issuing said permissions.
Similarly, congestion at ports
– this applies to Dhaka Airport
as well as the main seaport at
Chittagong. Who is it that currently
creates the rules for how these
places work? Ah, that would be
government, at least of a kind,
wouldn’t it? So, again, we simply
want government to be more efficient
at those things which it does.
What we haven’t found in
our lists, either from Smith or
the ICC-B, is where government
should be doing more than it
already is, we’re only asking that it
BIGSTOCK
might do things a little better.
It’s rather more likely in fact
that we will find things that the
government should stop doing. For
example, there are import tariffs
upon cows from India coming into
Bangladesh. Umm, why?
Moving cows from where people
generally won’t eat them to where
they generally will sound like
making both sides better off. Why
intervene in this process? If the
relative prices don’t indicate that
people are so becoming better off
them the movement won’t occur.
We thus end up with a useful
extension to Smith here. Yes,
government must indeed do those
basic things which need to be
done and which only government
can do. Our list of these is a little
longer than it was in Smith’s day
and really our major complaint is
that government should do them
better, rather than as they do them
today.
But we also, in keeping with
Smith again, have our little lists
of things that government just
shouldn’t be doing at all. And
that’s where our real problem
is, how in heck do we get them
to stop interfering where they
shouldn’t be? •
Tim Worstall is a Senior Fellow at the
Adam Smith Institute in London.