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ADB downsizes growth at 6.1 pc, blames political unrest

Business Report

Taking the impact of prolonged political unrest and its disruptions to economy and business into consideration, the Asian Development Bank last week made a downsize revised growth prospect at 6.1 percent from earlier 6.4 percent for the current fiscal 2014-15.
The government had earlier set 7.2 percent growth rate for the year but the government authorities and the donors had already indicated that the target would not be achievable due to political unrest hitting the nation from early January.
In a report released on Tuesday last the ADB said “Political blockades and violence in early 2015 will constrain growth.”
In fact before the political unrest began in January, the economy had been expanding briskly for six months, indicating good growth prospects for 2014-2015, it said. During this period strong remittance inflows boosted consumptions and private investment was rising as indicated by higher capital equipment imports. Exports however remained subdued as they were gradually improving as new orders came in.
The ADB said however, political unrest accompanied by blockade and hartals led closure to transportation undermining growth prospects by affecting private investment and export activity. But continued healthy remittance inflows are expected to support consumer spending to sustain the economic momentum.
“Notwithstanding the country’s resilience under domestic and external shocks, if political unrest continues, it would further hinder economic growth,” ADB said.
The projections are based on several assumptions: the central bank will maintain its cautious monetary stance; the government will raise electricity and natural gas prices to cut subsidies and keep current spending within the budget; it will attain targeted budget revenue and foreign financing and strengthen project implementation; and the weather will be favourable.
The ADB said inflation would be 6.5 percent in the current fiscal year and 6.2 percent the following year. Growth in the next fiscal year is projected to accelerate to 6.4 percent, aided by higher remittance and exports.
Consumer and investor confidence are expected to pick up as the political situation stabilises, strengthening growth momentum. In addition, infrastructure constraints will likely ease somewhat with the completion of ongoing projects, particularly the opening of new power plants.
The outlook is subject to several downside risks: delayed economic recovery in the European Union, Bangladesh’s main export destination; inability to mobilise the domestic revenue or foreign financing needed to meaningfully improve infrastructure, especially for power generation; and prolonged political unrest that would drain confidence.

Comment

Business Report

Taking the impact of prolonged political unrest and its disruptions to economy and business into consideration, the Asian Development Bank last week made a downsize revised growth prospect at 6.1 percent from earlier 6.4 percent for the current fiscal 2014-15.
The government had earlier set 7.2 percent growth rate for the year but the government authorities and the donors had already indicated that the target would not be achievable due to political unrest hitting the nation from early January.
In a report released on Tuesday last the ADB said “Political blockades and violence in early 2015 will constrain growth.”
In fact before the political unrest began in January, the economy had been expanding briskly for six months, indicating good growth prospects for 2014-2015, it said. During this period strong remittance inflows boosted consumptions and private investment was rising as indicated by higher capital equipment imports. Exports however remained subdued as they were gradually improving as new orders came in.
The ADB said however, political unrest accompanied by blockade and hartals led closure to transportation undermining growth prospects by affecting private investment and export activity. But continued healthy remittance inflows are expected to support consumer spending to sustain the economic momentum.
“Notwithstanding the country’s resilience under domestic and external shocks, if political unrest continues, it would further hinder economic growth,” ADB said.
The projections are based on several assumptions: the central bank will maintain its cautious monetary stance; the government will raise electricity and natural gas prices to cut subsidies and keep current spending within the budget; it will attain targeted budget revenue and foreign financing and strengthen project implementation; and the weather will be favourable.
The ADB said inflation would be 6.5 percent in the current fiscal year and 6.2 percent the following year. Growth in the next fiscal year is projected to accelerate to 6.4 percent, aided by higher remittance and exports.
Consumer and investor confidence are expected to pick up as the political situation stabilises, strengthening growth momentum. In addition, infrastructure constraints will likely ease somewhat with the completion of ongoing projects, particularly the opening of new power plants.
The outlook is subject to several downside risks: delayed economic recovery in the European Union, Bangladesh’s main export destination; inability to mobilise the domestic revenue or foreign financing needed to meaningfully improve infrastructure, especially for power generation; and prolonged political unrest that would drain confidence.


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India owes Iran $8.8 billion for oil

Reuters

India owes about $8.8 billion for oil imports from Iran, India’s trade minister said on Friday, as economic sanctions imposed over Tehran’s nuclear programme have cut its access to the global banking system and hit its oil revenue.
Iran and Western powers are in talks to reach a framework agreement ahead of an end-March deadline to curb Tehran’s most sensitive nuclear activities in exchange for a gradual end to sanctions on the OPEC member.
India refiners settle 45 percent of Iranian oil payments by depositing rupees in Tehran’s commercial banks’ account with UCO Bank, and withhold the remaining 55 percent.
Iran taps funds in the rupee account to import goods from India.
 The balance in Iranian commercial banks’ accounts with UCO Bank was 178.955 billion rupees ($2.86 billion) as of March 16 while refiners owed Tehran $5.943 billion as on Feb 28, Nirmala Sitharaman told lawmakers in a written reply on Friday.
Refiners usually release funds for Iran from the 55 percent payment as and when the West allows Tehran access to frozen funds overseas.
New Delhi is keen to narrow its trade gap with Tehran, and has allowed India exporters to import non-sanctioned goods into India for sale to Iran.
“The Ministry of Finance has decided that payments to the extent of $100 million per month for such third-country exports to Iran would be allowed from the 45 percent rupees vostro account held with the UCO Bank,” Sitharaman said.
Payment over and above $100 million per month would be met from the 55 percent component held by refiners, she said.
India, Iran’s top client after China, has been reducing its imports from Iran under pressure from Western sanctions.

Comment

Reuters

India owes about $8.8 billion for oil imports from Iran, India’s trade minister said on Friday, as economic sanctions imposed over Tehran’s nuclear programme have cut its access to the global banking system and hit its oil revenue.
Iran and Western powers are in talks to reach a framework agreement ahead of an end-March deadline to curb Tehran’s most sensitive nuclear activities in exchange for a gradual end to sanctions on the OPEC member.
India refiners settle 45 percent of Iranian oil payments by depositing rupees in Tehran’s commercial banks’ account with UCO Bank, and withhold the remaining 55 percent.
Iran taps funds in the rupee account to import goods from India.
 The balance in Iranian commercial banks’ accounts with UCO Bank was 178.955 billion rupees ($2.86 billion) as of March 16 while refiners owed Tehran $5.943 billion as on Feb 28, Nirmala Sitharaman told lawmakers in a written reply on Friday.
Refiners usually release funds for Iran from the 55 percent payment as and when the West allows Tehran access to frozen funds overseas.
New Delhi is keen to narrow its trade gap with Tehran, and has allowed India exporters to import non-sanctioned goods into India for sale to Iran.
“The Ministry of Finance has decided that payments to the extent of $100 million per month for such third-country exports to Iran would be allowed from the 45 percent rupees vostro account held with the UCO Bank,” Sitharaman said.
Payment over and above $100 million per month would be met from the 55 percent component held by refiners, she said.
India, Iran’s top client after China, has been reducing its imports from Iran under pressure from Western sanctions.


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Bangladesh emerges as a major bicycle exporter

Business Report

Bangladesh is currently the fifth largest bicycle exporter to Europe in quite reverse to its position as an importer only a decade ago.
A report filed by BDnesw 24.com said businessmen in Bangladesh see a huge export potential of bicycles because of its growing popularity in developed countries as climate friendly mode of transport.
They expect a sharp rise in bike exports to the European market following its economic recovery. Bangladesh follows Taiwan, Thailand, Sri Lanka and Indonesia in cycle exports to Europe.
Export Promotion Bureau (EPB) figure shows Bangladesh exported bicycles worth $84.7 million in the first eight months of the current fiscal year, beginning on July 1, against the year’s target of $121.5 million. The July-February export figure was 30.23 percent higher than of the previous corresponding period.
Bicycle exports began in 2000 and picked up speed in 2008. EPB Vice-Chairman Shubhashish Bose said.  “An increase in bicycle exports shows a diversification of our export basket,” he pointed out.
Bangladesh-made bikes are expected to grab the ‘entire European market’, just as readymade garments (RMG) have done, in another 10 years. EPB officials said around 80 percent of bicycle exports now going to European Union countries, and the rest to India, the UAE, Australia and other nations.
The manufactures said six types of cycles were being exported — freestyle, mountain trekking, folding, chopper, road racing, and tandem. Bangladesh imports some of the cycle spares and locally produces the rest — particularly wheels, tubes, pedals, handles, bearings and seats.

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Business Report

Bangladesh is currently the fifth largest bicycle exporter to Europe in quite reverse to its position as an importer only a decade ago.
A report filed by BDnesw 24.com said businessmen in Bangladesh see a huge export potential of bicycles because of its growing popularity in developed countries as climate friendly mode of transport.
They expect a sharp rise in bike exports to the European market following its economic recovery. Bangladesh follows Taiwan, Thailand, Sri Lanka and Indonesia in cycle exports to Europe.
Export Promotion Bureau (EPB) figure shows Bangladesh exported bicycles worth $84.7 million in the first eight months of the current fiscal year, beginning on July 1, against the year’s target of $121.5 million. The July-February export figure was 30.23 percent higher than of the previous corresponding period.
Bicycle exports began in 2000 and picked up speed in 2008. EPB Vice-Chairman Shubhashish Bose said.  “An increase in bicycle exports shows a diversification of our export basket,” he pointed out.
Bangladesh-made bikes are expected to grab the ‘entire European market’, just as readymade garments (RMG) have done, in another 10 years. EPB officials said around 80 percent of bicycle exports now going to European Union countries, and the rest to India, the UAE, Australia and other nations.
The manufactures said six types of cycles were being exported — freestyle, mountain trekking, folding, chopper, road racing, and tandem. Bangladesh imports some of the cycle spares and locally produces the rest — particularly wheels, tubes, pedals, handles, bearings and seats.


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Continental Insurance held Branch Managers’ Conference

Business Report

Branch managers’ Conference-2015 of Continental Insurance Limited was held recently at Progoti Soroni, Baridhara with director and chairman of the Executive Committee of the Company A.K.M. Azizur Rahman as chief guest.
Directors Mohammed Iqbal,, Mohd. Jahangir Hossain, Ishnad Iqbal were present as special guests on the occasion. The Conference was presided over by Managing Director of the Company Khawja Manzer Nadeem,. All the Branch managers and senior officials of the company attended the conference.
Branch Managers participated in the deliberations.

Comment

Business Report

Branch managers’ Conference-2015 of Continental Insurance Limited was held recently at Progoti Soroni, Baridhara with director and chairman of the Executive Committee of the Company A.K.M. Azizur Rahman as chief guest.
Directors Mohammed Iqbal,, Mohd. Jahangir Hossain, Ishnad Iqbal were present as special guests on the occasion. The Conference was presided over by Managing Director of the Company Khawja Manzer Nadeem,. All the Branch managers and senior officials of the company attended the conference.
Branch Managers participated in the deliberations.


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Two new independent directors for Bank Asia

Business Report

Two noted bankers Md Nazrul Huda and M Shahjahan Bhuiyan have been appointed as independent directors of Bank Asia, a press release of the bank said .
Huda served at Bangladesh Bank for 35 years in different capacities and retired as a deputy governor of the bank. He is an economics graduate from Dhaka University and  also studied at the University of New England, Australia.
Bhuiyan is a former managing director of Prime Bank and United Commercial Bank. He served the banking sector for four decades to add his experience to the new post. His banking career started with the erstwhile State Bank of Pakistan.

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Business Report

Two noted bankers Md Nazrul Huda and M Shahjahan Bhuiyan have been appointed as independent directors of Bank Asia, a press release of the bank said .
Huda served at Bangladesh Bank for 35 years in different capacities and retired as a deputy governor of the bank. He is an economics graduate from Dhaka University and  also studied at the University of New England, Australia.
Bhuiyan is a former managing director of Prime Bank and United Commercial Bank. He served the banking sector for four decades to add his experience to the new post. His banking career started with the erstwhile State Bank of Pakistan.


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IBBL recommends 15 pc cash dividends

Business Report

The Board of Directors of Islami Bank Bangladesh Limited (IBBL)
has recommended 15pc cash dividends for the shareholders for 2014 subject to approval at the bank’s annual general meeting.
It was decided in a meeting of the Board on March 21 in the city with its Acting Chairman Engr. Mustafa Anwar in the chair. Local and foreign directors of the board along with IBBL Managing Director Mohammad Mohammad Abdul Mannan, were present.
The meeting approved the profit and loss account and balance sheet for 2014 ended on 31 December. The board also decided to hold its 32nd AGM on June 13, 2015. The Record date for dividend has been fixed for April 16.
 The board has also decided that the annual profit rate of Mudaraba Perpetual Bond is 11.18 pc for the year 2014. It is 9.68 pc on final rate of profit of 8 years term Mudaraba Savings Bond and 10 pc of the declared dividend. The profit of the Bond will be distributed within 30 days from holding of AGM.

Comment

Business Report

The Board of Directors of Islami Bank Bangladesh Limited (IBBL)
has recommended 15pc cash dividends for the shareholders for 2014 subject to approval at the bank’s annual general meeting.
It was decided in a meeting of the Board on March 21 in the city with its Acting Chairman Engr. Mustafa Anwar in the chair. Local and foreign directors of the board along with IBBL Managing Director Mohammad Mohammad Abdul Mannan, were present.
The meeting approved the profit and loss account and balance sheet for 2014 ended on 31 December. The board also decided to hold its 32nd AGM on June 13, 2015. The Record date for dividend has been fixed for April 16.
 The board has also decided that the annual profit rate of Mudaraba Perpetual Bond is 11.18 pc for the year 2014. It is 9.68 pc on final rate of profit of 8 years term Mudaraba Savings Bond and 10 pc of the declared dividend. The profit of the Bond will be distributed within 30 days from holding of AGM.


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