United Finance holds AGM, approves 5pc cash dividend
The 34th Annual General Meeting (AGM) of United Finance Limited was held virtually on Thursday, reads a media statement. The meeting approved 5 per cent cash dividend, which equates to Tk 5.00 per 10 shares for the year 2022. The Company earned an
Budget enthusiasm pushes stocks higher, caution drags turnover on Thursday
Ahead of the proposed budget, the bulls' enthusiasm and expectation for a positive outcome helped push Dhaka-Chattogram stocks higher today.
DSEX, the broad-based index of the Dhaka Stock Exchange (DSE), was up by 0.25% to 6,355 points during the closing bell on Thursday.
105 scrips advanced, 71 declined
https://www.tbsnews.net/economy/stocks/budget-enthusiasm-pushes-stocks-higher-caution-drags-turnover-thursday-641978
Economy
New budget prepared to manage inflation, revenue and IMF conditions
May 31, 2023
· The record budget of BDT 7,618bn (USD 71.9bn) has a record deficit of BDT 2,579bn (USD 24.3bn) when foreign funding and loans are factored in.
· The country's average inflation rate at the end of 11 months was 8.04%, compared to the government's target of 5.6% for FY23. However, inflation in the upcoming fiscal year (FY24) is projected to be only 6.5%.
· This is an increase of BDT 1,013bn (USD 9.6bn) over the existing revised budget. To meet the massive spending, a total revenue target of BDT 5,039bn (USD 47.5bn) has been set up, including foreign aid. To do this, an additional BDT 676bn (USD 6.4bn) must be collected over the revised FY23 budget.
· Foreign grants are projected to total BDT 39bn (USD 0.4bn) Foreign grants are not required to be returned to the government. As a result, income has been linked to the revenues from this sector.
· On the other hand, analyzing National Board of Revenue (NBR) revenue collection data, think tanks such as the Centre for Policy Dialogue (CPD) and Policy Research Institute (PRI) have projected a deficit of around BDT 550bn (USD 5.2bn) against the NBR's revenue target of BDT 3,700bn (USD 34.9), but the government has given NBR a new revenue target of BDT 4,300bn (USD 40.6bn) in the budget announced on Thursday.
BDT 5,810mn savings certificates sold in April – highest in FY23
May 31, 2023
· The net sales of savings certificates reached BDT 5,810mn (USD 54.8) in April – so far the highest in FY23, according to the latest Bangladesh Bank data.
· The net sales for the first 10 months of the fiscal year, however, stood negative at BDT 35,790mn (USD 338mn) as the government borrowed some BDT 680bn (USD 6.4bn) against the repayment of BDT 716bn (USD 6.8bn) during the period.
· In the corresponding period of FY22, the net sales of the tools were BDT 175bn (USD 1.7bn).
· The government set a target of borrowing BDT 350bn (USD 3.3bn) from savings tools for the ongoing financial year. It has later been reduced to BDT 200bn (USD 1.9bn). In this calculation, the government needs a net borrowing of BDT 236bn (USD 2.2bn) in the next two months – May and June – to meet the target.
· Stakeholders said lower interest rates, various investment conditions and higher inflation were the reasons behind the lower sales of saving certificates. In addition, the government also reduced borrowing from the tools to decrease its burden of interest expenses.
From: https://www.tbsnews.net/economy/tk581cr-savings-certificates-sold-april-highest-fy23-641750
Dollar rate up again for remittances, exports
May 31, 2023
· From now on, expatriate Bangladeshis will receive an increase of BDT 0.50 for remittances, while the dollar rate for export proceeds will be higher by BDT 1.
· The new rate stands at BDT 108.50 for remittances and BDT 107 for export proceeds.
· Including the 20.5% government incentives, the remitters will receive BDT 111.25 per dollar.
· The Association of Bankers, Bangladesh (ABB) and the Bangladesh Foreign Exchange Dealers' Association (Bafeda) made the decision on Wednesday.
· Banks will implement the new rates from Thursday, Selim RF Hussain, ABB chairman and managing director of Brac Bank, told The Business Standard, after emerging from the meeting attended by managing directors of public and private banks.
From: https://www.tbsnews.net/economy/dollar-hikes-again-tk50-remittancetk1-export-proceeds-641570
Govt to impose specific duty on fuel
01 June, 2023
· The government is going replace existing duty on 13 petroleum products import by a specific duty in the next fiscal year, amounting to a maximum of BDT 13.75 per litre (USD 0.1), which likely effect from 1 June (Thursday).
· The specific duty would be BDT 13.75 per litre for 11 types of petroleum products, including kerosene, light diesel, motor spirit and jet fuel.
· If put into effect, it will have higher impact on retail price than the existing duty rate, which is 10% for 12 petroleum products, sources within the finance minister said.
· The existing duty is 5% on petroleum oils and oils obtained from bituminous minerals, crude, which will be replaced by BDT 1117 per barrel (USD 10.5 per barrel) (BDT 7.02 per litre). Specific duty of BDT 9,108 per tonne (BDT 9.10 per litre) has been proposed for furnace oil, which is now subject to 10% duty.
· The government also plans to withdraw the existing 5% advance tax on the import of 13 oil and petroleum products in the upcoming budget, which is expected to give people some relief from inflationary pressure, according to sources within the finance ministry.
· Officials from the finance ministry have confirmed that the removal of the advance tax will result in cheaper fuel oils, including crude oil, diesel, jet fuel, kerosene, and base oil.
From: https://www.tbsnews.net/economy/budget/govt-impose-specific-duty-fuel-641790
Govt to introduce flat 3% source tax for high voltage cables
May 31, 2023
· The government plans to impose a fixed 3% source tax for local high-voltage cable producers, who earlier had to pay source tax from 2% to a maximum of 7%.
· Local entrepreneurs said imposing a 3% flat rate for the tax deducted at source (TDS) on the production of high-voltage cables in the upcoming budget will benefit the industry.
· Currently the government's mega projects use high voltage cables, a large part of which is imported from abroad. Moreover, the government's initiative to set up underground power transmission lines will increase demand for high-voltage cables in the country.
From: https://www.tbsnews.net/economy/budget/govt-introduce-flat-3-source-tax-high-voltage-cables-641742
BD set to sign 3rd LNG contract with Qatar today
June 01, 2023
· Bangladesh is all set to sign its third contract today (Thursday) to import liquefied natural gas (LNG) from suppliers under long-term contracts.
· State-run Petrobangla is expected to sign a sales and purchase agreement (SPA) with QatarEnergy to import around 2.0 million tonnes of LNG annually for 15 years.
· According to sources, Bangladesh is expected to begin importing LNG from QatarEnergy starting in January 2026. However, the sources could not provide details on the prices.
· This will be Bangladesh’s second long-term deal with Qatari LNG suppliers.
· Currently, Petrobangla has two SPAs – one with Qatargas and another with OQ, previously known as Oman Trading International.
· Bangladesh has a 15-year SPA with Qatargas to import 1.80-2.50 million tonnes of LNG every year.
· Petrobangla is required to pay 12.65 % of the three-month average price of Brent crude oil plus a constant of 50 cents per million British thermal unit (MMBtu).
· The country has a 10-year SPA with OQ to import around 1.50 million tonnes of LNG annually at 11.9 % of the three-month average price of Brent crude oil, plus a constant price of 40 cents per MMBtu.
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Kamal tables Tk 7.62 trillion budget for FY24
Finance Minister AHM Mustafa Kamal has unveiled a Tk 7.62 trillion national budget for the fiscal year 2023-24 (FY24).
He placed the budget before the Jatiya Sangsad at 3:00pm on Thursday.
The record outlay of Tk 7.62 trillion represents an increase of over 12 per cent compared to the original budget of Tk 6.78 trillion for this fiscal (FY23). The revised budget for the outgoing fiscal year is set at Tk 6.60 trillion.
In the budget, Tk 4.75 trillion has been earmarked for the recurrent or operating expenditure, while the rest amount for development and other spending.
Earlier in the day, the Cabinet at a special meeting approved the proposed national budget for FY24.
https://thefinancialexpress.com.bd/economy/kamal-tables-tk-762-trillion-budget-for-fy24
note: this post is for research and analysis only