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How Bangladesh Lamps thrives amid macroeconomic challenges
When the global economic crisis, inflation, and the devaluation of the taka were hindering the businesses of other sectors, the light manufacturer of Transcom Group attained the highest revenue and...
Banks get until Dec 2023 to adjust excess stock investment
Auditor concerned about Khulna Printing’s business ability
Small cos emerge as market movers while giants stay unmoved from floor
Economy
Export of RMG items to EU witnesses 16.27% growth during Jul-Nov
December 19, 2022
· The export of RMG items to the European Union (EU) has witnessed 16.27% growth during the July-November period of this year compared to the same period last year.
· As per the statistics of the Export Promotion Bureau (EPB), RMG export to the EU increased by 16.27%, from USD 7.81 billion to USD 9.07 billion in July-November 2022-23.
· Germany is the largest European market fetching USD 2.71 billion with 1.88% growth compared to the same period of the previous year.
· Export to Spain and France also increased by 19.15% and 38.87% respectively. Exports to other major EU countries such as Italy, Austria, Netherlands and Sweden have shown growth by 50.95%, 48.87%, 34.39% and 22.90% respectively.
· On the other hand, export to Poland has shown 19.61% year-over-year negative growth during the mentioned period.
From: https://www.tbsnews.net/economy/rmg/export-rmg-items-eu-witnesses-1627-growth-during-jul-nov-554658
Approval delay hinders using USD 2b WB loans
December 19, 2022
· The World Bank approved USD 191 million for the Higher Education Acceleration and Transformation project, USD 358 million for a road safety project, USD 753.45 million for the Accelerating Transport and Trade Connectivity in Eastern South Asia-Bangladesh Phase 1 project, USD 500 million for Resilient Infrastructure for Adaptation and Vulnerability Reduction, and USD 250 million for a project on environmental sustainability and transformation.
· The projects were approved between June 2021 and December 2022.
· The loans come into effect after the signing of the loan agreements. Loan agreements with development partners for foreign loans are made only after the approval of the Executive Committee of the National Economic Council (Ecnec) meeting.
· But these could not be presented due to delays in amendments to the Development Project Proposal by the ministries and divisions concerned.
From: https://www.tbsnews.net/economy/approval-delay-hinders-using-2b-wb-loans-554666
650 cars stranded at ports as importers cannot open LCs for dollar crunch
December 19, 2022
· Reconditioned vehicle importers are now in trouble over getting their 650 cars released from the Chattogram and Mongla ports as they have failed to open letters of credit after the shipments, which is allowed for reconditioned cars, due to dollar crisis.
· The BDT 200 crore cars sourced from Japan in lots early this year were scheduled to ship to Bangladesh under several LCs, according to the Bangladesh Reconditioned Vehicles Importers and Dealers Association.
· Although some consignments reached between January and June accordingly, traders could not open LCs for the rest of the cars afterwards due to dollar crisis. They, however, were forced to bring the vehicles to the country under the agreements they did with the exporters during the procurements. Otherwise, the cars would be scrapped in the source country.
· Bankers said they are still unable to supply dollars for the car imports amid the depleting foreign currency reserves. "We know importers can be losers but we have no way to break the central bank rules [regarding opening the LCs]," said Md Jahangir Alam, executive vice-president of Bank Asia.
Austerity, scarce project- aid matching funds squeeze ADP
December 20, 2022
· Tightfisted spending for scarce funds amid global crisis squeezes Bangladesh's Annual Development Programme in the current fiscal as many public agencies seek smaller amounts than their project- aid (PA) outlay, officials say.
· They are guesstimating such development-budget cuts with hints from consultations leading to revision of the ADP current fiscal year (FY) 2022-23, as government ministries and agencies were seeking lower funds from the foreign aid or PA portion of the development budget following government austerity in development spending.
· On Monday, the Economic Relations Division (ERD) concluded a 6-day consultation with all the ministries and agencies prior to revising the current PA portion in the BDT 2.46-trillion ADP.
· Out of the total ADP outlay, the government allocated BDT 920 billion as PA, to be mobilised from foreign development partners.
· The PA money comes from assistance provided by different development financiers, like the World Bank, the Asian Development Bank (ADB), Japan, China, the Asian Infrastructure Investment Bank (AIIB) and the United Nations.
· He said the big ministries like power, agriculture, water resources, local government, energy, and education sought lower funds for the upcoming Revised ADP (RADP) than their current allocation in the original ADP.
· A senior Power Division official said since the finance ministry had imposed several restrictions on budget expenditure, the project implementation in time might be affected and thus foreign-aid expenditure will also get squeezed to some extent for scant matching funds.
· "If we want to spend project aid in the foreign-aided development projects, we also need matching funds from government internal resources (GoB) proportionately. However, we are not getting adequate GoB funds in time," he says about the reasons for the slowdown.
Banking
Banks get until Dec 2023 to adjust excess stock investment
December 19, 2022
· The Bangladesh Bank has given banks until 31 December 2023 to adjust their excess investment from the capital market exposure limit.
· In a circular on Monday, the central bank asked the lenders that have excess investment in stocks until 31 August to bring down their exposure to the prescribed level.
· Earlier, on 12 October, the Financial Institutions Division sent a letter to the central bank with its consent to this end.
· Seeking anonymity, a central bank official said, on 4 August this year, the Bangladesh Bank issued instructions to calculate banks' stock investments based on the cost price instead of the market price of their shares.
· "In this, the investments of several banks have been found overexposed. And if this investment is brought down to the prescribed limit, the stock market index will fall. Banks also have to count losses. So, the banks requested time to adjust the limit," he added.
https://www.thedailystar.net/business/economy/banks/news/bb-gives-banks-more-time-adjust-3200306
https://today.thefinancialexpress.com.bd/first-page/bb-extends-time-until-dec-2023-1671470998
Energy
Rampal Plant starts power production
December 19, 2022
· The coal-fired Rampal Power Plant in Bagerhat has finally started electricity generation on experimental basis through adding 660 megawatts of electricity to the national grid produced from its first unit.
· Rampal power plant, formally known as Maitree Super Thermal Power Project, started its experimental power generation from Saturday night, Bangladesh Power Development Board Director Shamim Hasan said.
· He said that it might take a week to a month to start commercial operation of unit-1.
· Anwarul Azim, deputy manager of Rampal thermal power plant, said that 660 mw of electricity is being produced from unit-1. Of this, 400mw was being added to the National Grid in Dhaka via Aminbazar-Gopalganj transmission line and 260MW is being supplied to Khulna-Bagerhat.
· The 1320 (2x660) mw coal-fired power plant has been set up at a cost of approximately USD 2 billion and is located in Rampal, in the Bagerhat district under Khulna division of Bangladesh.
· The Maitree Super Thermal Power Project is being constructed under the Indian government’s concessional financing scheme.
From: https://www.newagebd.net/article/189412/rampal-plant-starts-power-production
note: this post is for research and analysis only