Weekly News Clippings 18 April 2013

Don’t sanction loans to illegal housing projects  (New Age, April 18, 2013)

Bangladesh Bank (BB) has forbidden all scheduled banks to sanction loans to private land developers for constructing buildings and purchasing flats if they do not have the approval of the authorities concerned. According to a recent BB circular, a bank should check whether the project adheres to all the rules and regulations of the Land Development Act – 2004, before disbursing loans.

 

Brand war heats up in ice cream market (The Daily Star, April 17, 2013)

The growing market for ice cream is luring new players into the industry. Encouraged by the growing purchasing power of consumers, Kazi Farms launched its ice cream brand, Bellissimo early this year while two others, Golden Harvest and Cold Stone Creamery have queued up to enter the business. Igloo, Polar and Kwality (three local brands) account for nearly 70 percent of the market, but premium ice cream brands such as Mövenpick and Baskin-Robbins have carved out a niche.  Deputy Manager of Kazi Foods said that premium ice creams account for nearly 15 to 20 percent of the Tk 550 crore market for branded ice creams.

 

Gold slumps to two-year trough (The Daily Star, April 17, 2013)

The price of 22 karat gold dropped to Tk 51,322 per bhori (11.66 grams), the lowest in the last two and a half years. This was the fifth time this year the bullion prices had to be brought down by Bangladesh Jewelers’ Samity, a platform of gold jewelry shop owners. According to the president of Bangladesh Jewelry Manufacturers’ and Exporters’ Association, the prices dropped by $150-$200 in the international market over the last four days, which is impacting the local market. He is optimistic that the lower prices will attract new buyers. At present, the annual demand for gold jewelry in Bangladesh is around 16 tonnes.

 

Govt under pressure to inject bailout funds into SoBs (New Age, April 16, 2013)

The International Monetary Fund (IMF) has asked the government to inject fresh funds into the state-owned banks to address the crisis caused by the series of financial scandals last year. The state-owned banks, including Sonali Bank, the country’s largest commercial bank, have already sought fresh funds, after the Hallmark Group had embezzled around Tk 3,600 crore from one of the bank’s branches. Following a visit by its delegation to Dhaka, early this month, the IMF had asked the government to recapitalize the state-owned banks in FY14. The fund embezzlement by Hallmark Group from Sonali Bank Ruposhi Bangla Branch early last year was the single biggest financial fraud in the country’s history.

 

Wal-Mart, Sears Refuse Compensation for Factory Victims (Bloomberg, April 15, 2013)

Global retailer Walmart and Illinois–based multinational Sears Holdings Corp have refused to compensate the victims of Tazreen Fashions Ltd whereas other companies like Li & Fung Ltd have already started compensating voluntarily. In addition, Walmart and Sears did not attend the meeting in Geneva on the 15^th of this month, where companies were expected to discuss compensation payments for the victims’ families and survivors of the fire. On November 24 last year, 112 workers of Tazreen Fashions were killed in fire as the factory did not have adequate fire safety measures.

 

First Bangla search engine Pipilika takes off (The Daily Star, April 14, 2013)

Pipilika.com, the first search engine in Bangla, was launched on April 13. The search engine, with a storage capacity of 4 terabytes will draw out contents from all Bangla newspapers, blogs, encyclopedias, government websites and others. The site has a dictionary of Bangla Academy spelling rules, which will suggest corrections for all mistakes in the language. A team of 11 researchers and developers of Computer Science and Engineering Department of Shahjalal University of Science and Technology (SUST) developed the search engine with technical and financial assistance from Grameenphone IT Ltd.

 

Taka continues to gain against dollar (The Daily Star, April 14, 2013)

A steady appreciation of the taka, increases the price of Bangladeshi goods on the international market and risks hurting the export sector. The central bank has been trying to restrain the local currency by purchasing dollars. Exporters blamed lower imports for the fall. According to a Bangladesh Bank official, imports have gone down even more in March due to the unstable political situation. The taka depreciated by more than 15 percent against the dollar in 2011 but began to appreciate against the dollar in the second quarter of 2012.

 

Economy in double jeopardy: CPD (The Daily Star, April 14, 2013)

According to Debapriya Bhattacharya, an economist and fellow of CPD, the ongoing violent political activities have put the economy in “double jeopardy”. The Centre for Policy Dialogue (CPD) has come up with a new estimate on how shutdowns put financial burden on the economy. According to CPD, if one shutdown causes at least 1 percent decline in the supply of capital, it will eventually eat up around 0.9 percent or $1 billion of the country’s GDP a year.

 

Bangladesh tea export may face setback after 3 years (New Age, April 13, 2013)

Bangladesh should produce more tea over the next three years to prevent a severe drop in its exports. According to the commerce ministry, the production of tea cannot keep up its pace with the rising demand of the crop. He said that, the country may not have any tea left to export after meeting the local demand.  President of Bangladesh Tea Association said that the government should give more soft loans at a lower interest rate to assist in increasing the production. The country exported Tk 22.23 crore worth of tea last year and 64 million kg of tea was produced. At present, Bangladesh exports tea to countries like Pakistan, Afghanistan, Russia, Saudi Arabia, Turkey, Ukraine and the UK.