Weekly News Clippings (11 April 2012)

 

Shutdowns sour Baishakh sales (The Daily Star, April 11, 2013)

Frequent shutdowns at the threshold of Pahela Baishakh, the Bengali New Year, have led to poor sales, deeply disappointing the owners of boutiques (i.e. women’s clothing stores), who usually enjoy huge turnover this season. The small boutique owners in Dhaka have termed the situation as “a nightmare” as they have invested large sums ahead of the first day of the Bengali New Year 1420. The dull sales have led more than 100 boutique owners to take to the streets in Bailey Road on Wednesday, to voice their anguish over the current political unrest. Over the years, Baishakh has become the second biggest season after Eid-ul-Fitr for brisk business for thousands of boutiques across the country, when sales account for around 15 percent of annual turnover.

 

Land prices in decline (The Daily Star, April 11, 2013)

Land prices have begun to show a decline after over two decades of price hike. The situation potentially poses a problem for banks, as many of their borrowers have used loans to finance land purchases based on an assumption of rising prices. According to Real Estate & Housing Association of Bangladesh (REHAB), land prices had been skyrocketing for the past two decades till 2010. In Dhaka and its fringe areas, prices soared by over 300 percent between 2000 and 2007 and rose further by about 50 percent between 2007 and 2010. Bankers and realtors attribute the falling prices to political volatility, a slow pace of economic growth, a dearth of gas connections, and a bar on investment of untaxed money in the housing sector.

 

ACC may sue BTCL officials for fund misappropriation  (The Daily Star, April 10, 2013)

The Anti-Corruption Commission (ACC) will file a case against six officials of Bangladesh Telecommunications Company Ltd (BTCL) for misappropriating around Tk 575 crore. An investigative report conducted by the ACC has found that BTCL officials had manipulated incoming international call records between December 2011 and November 2012 at the two exchanges in Mohakhali and Moghbazar. The ACC report has recommended accusing three officials of a European telecommunication company along with the six officials of BTCL, including, two former acting managing directors, two general managers and two engineers. Last year, another probe team comprising of officials from telecom ministry and Bangladesh Telecommunication Regulatory Commission had inspected the two BTCL international exchanges and had reached the same conclusion as the ACC.

 

Exporters demand tax cut, in budget  (The Daily Star, April 9, 2013)

Exporters have urged the government to reduce the tax at source for fiscal 2013-14 as the garment sector has been badly affected due to political unrest and a drop in global demand. Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Bangladesh Knitwear Manufacturers and Exporters Association made the appeals during a meeting at the National Board of Revenue ahead of the budget for the next fiscal year. According to the BGMEA president, tax should be imposed on manufacturing instead of 0.8 percent tax at source on the value of export items. Exporters also demanded an extension to the time on bonded licenses from an existing two years to three years and an extension of the auditing interval from three months to six months.

 

Stock tax hits record low (The Daily Star, April 9, 2013)

The government’s earnings from stock trading fell to Tk 3.33 crore in March.  According to the Dhaka Stock Exchange (DSE), the figures came close to those last seen in May 2009 when the amount was as low as Tk 3.09 crore. On top of an already downward trend since early 2011, the ongoing political turmoil has further destabilized the market. The DSE, on behalf of the government, collects the tax as brokerage commission at 0.05 percent and deposits the amount to the state coffer. The government earned tax worth Tk 100.11 crore in 2012, as opposed to Tk 207.84 crore earned in 2011.

 

15 RMG units incur $3.31m loss for political turmoil (New Age, April 8, 2013)

The country’s ongoing political instability and incessant shutdowns have led to a loss of TK 26.48 crore ($3.31m) for 15 readymade garment (RMG) factories. According to an assessment survey conducted by the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), the political turmoil has taken quite a toll on the RMG sector as the industry has been facing huge loss from order cancellations, discounts, air freight fares and vandalism since last month. The BGMEA asked factory owners on March 28 to report on the financial impact of recent political violence and frequent strikes on their units.  As of April 6, 15 garment factories had provided data.

 

Telenor to invest in Bangladesh 3G mobile facility: Norwegian minister (New Age, April 8, 2013)

Telenor has shown interest in investing in the third generation (3G) mobile technology in Bangladesh through Grameenphone. According to the Norwegian trade minister, Statoil, another Norwegian company which specializes in deep sea operation may also invest in Bangladesh, in future. In a meeting with the foreign minister of Bangladesh, the Norwegian minister expressed his interest in investing in shipbuilding, ship-recycling, oil and gas, and the IT sector.

 

Investors dejected by banks’ poor dividends (New Age, April 5, 2013)

Listed banks have declared lower than expected dividends, disappointing investors who had hoped to offset losses incurred from the downtrend of the market. Of the 30 listed banks with the DSE, 13 banks have declared dividends lower than last year. Share prices of some banks dropped in the Dhaka Stock Exchange (DSE) in last few days after poor dividend declarations. The bankers said that the overall economic condition had not been business-friendly and naturally reflected on the dividends for shareholders.