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MTBiz March 2016

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MTBiz is for you if you are looking for contemporary information on business, economy and especially on banking industry of Bangladesh. You would also find periodical information on Global Economy and Commodity Markets.

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MTBiz March 2016

  1. 1. MONTHLY BUSINESS REVIEW VOLUME: 07 ISSUE: 02 MARCH 2016 Global Economic Prospects Spillovers amidWeak Growth
  2. 2. Contents Disclaimer: MONTHLY BUSINESS REVIEW VOLUME: 07 ISSUE: 02 MARCH 2016 Article of the month 02 National News The Central Bank 05 Banking Industry 08 MTB News & Events 11 Business & Economy 16 Industry Appointments 18 International News Business & Economy 19 Economic Forecast 23 Wells Fargo Monthly Outlook 24 MTBiz is printed for non-commercial & selected individual-level distribution in order to sharing information among stakeholders only. MTB takes no responsibility for any individual investment decision based on the information at MTBiz. This review is for information purpose only and the comments and forecasts are intended to be of general nature and are current as of the date of publication. Information is obtained from secondary sources which are assumed to be reliable but their accuracy cannot be guaranteed. The name of the other companies, products and services are the properties of their respective owners and are protected by copyright, trademark and other intellectual property laws. MTBiz Developed & Published by MTB Group R&D Please send feedback to: rnd@mutualtrustbank.com All rights reserved @ 2016 Design & Printing: Preview Global Economic Prospects Spillovers amidWeak Growth
  3. 3. 02 MTBiz ARTICLE OF THE MONTH Global growth again fell short of expecta ons in 2015. Growth is projected to edge up in 2016-18 but the forecast is subject to substan al downside risks. Key points are spillovers from a slowdown in major emerging markets; the poten al macroeconomic implica ons of the Trans-Pacific Partnership; and the links between exchange rate regimes and capital controls in emerging and developing countries. Global growth again fell short of expecta ons in 2015, decelera ng to 2.4 percent from 2.6 percent in 2014. The disappoin ng performance mainly reflected a con nued growth decelera on in emerging and developing economies amid post-crisis lows in commodity prices, weaker capital flows and subdued global trade. Global growth is projected to edge up in the coming years, but at a slower pace than envisioned in June 2015, reaching 2.9 percent in 2016 and 3.1 percent in 2017-18. This pickup is predicated on con nued gains in major high-income countries, a gradual ghtening of financing condi ons, a stabiliza on of commodity prices, and a gradual rebalancing in China. The forecast is subject to substan al downside risks, including a disorderly slowdown in major emerging market economies, financial market turmoil arising from sudden shi s in borrowing costs amid deteriora ng fundamentals, lingering vulnerabili es in some countries, and heightened geopoli cal tensions. Weakening growth and sharply lower commodity prices have narrowed the room for policy makers to respond, especially in commodity-expor ng countries, should risks materialize. Specifically, a 1 percentage point decline in growth in BRICS (Brazil, Russian, India, China, and South Africa) is associated with a reduc on in growth over the following two years by 0.8 percentage points in other emerging markets, 1.5 percentage points in fron er markets, and 0.4 percentage points in the global economy. Spillovers could be considerably larger if the growth slowdown in BRICS were combined with financial market turbulence. On October 4, 12 Pacific Rim countries concluded nego a ons on the Trans-Pacific Partnership. The agreement could raise GDP in member countries by an average of 1.1 percent by 2030. It could also increase member countries’ trade by 11 percent by 2030. Among emerging and developing countries, some countries might rely on exchange rate flexibility as a bu er, some might aim to minimize currency fluctua ons, and some might consider measures to limit capital flows as they seek to keep some degree of Metals: The slump in metal prices, which reached their lowest levels in more than 6 years in November, reflects well-supplied markets as well as weaker growth in major emerging markets. New mining capacity came into opera on in several countries, especially Australia, adding to already abundant supplies. Agricultural commodi es: Grain and oilseed prices dipped in 2015, mostly in response to well-supplied markets, with the agricultural price index standing 33 percent below its early -2011 high as of November. The stocks-to-use ra o (a measure of how well supplied markets are) for key grains remains well above its 5- and 10-year average levels. Source: World Bank Major economies The recovery in major high-income countries gained trac on last year. This has been increasingly driven by stronger domes c demand, par cularly in the United States, where employment condi ons are robust. In the Euro Area, credit growth is picking up and unemployment is declining. The recovery remains fragile in Japan despite substan al policy s mulus. With external demand nega vely a ected by a slowdown in large emerging market economies, growth forecasts across major high-income economies in 2016 have been shaded down, but growth should s ll show some improvement from 2015. The ghtening cycle of the U.S. Federal Reserve is projected to be very gradual, 2013 2014 2015e 2016f 2017f 2018f DevelopingCountries 5.3 4.9 4.3 4.8 5.3 5.3 EastAsiaandPacific 7.1 6.8 6.4 6.3 6.2 6.2 China 7.7 7.3 6.9 6.7 6.5 6.5 Indonesia 5.6 5.0 4.7 5.3 5.5 5.5 Thailand 2.8 0.9 2.5 2.0 2.4 2.7 EuropeandCentralAsia 3.9 2.8 2.1 3.0 3.5 3.5 Kazakhstan 6.0 4.4 0.9 1.1 3.3 3.4 Turkey 4.2 2.9 4.2 3.5 3.5 3.4 Romania 3.5 2.8 3.6 3.9 4.1 4.0 LatinAmericaandtheCaribbean 3.0 1.5 -0.7 0.1 2.3 2.5 Brazil 3.0 0.1 -3.7 -2.5 1.4 1.5 Mexico 1.4 2.3 2.5 2.8 3.0 3.2 Colombia 4.9 4.6 3.1 3.0 3.3 3.5 MiddleEastandNorthAfrica 0.6 2.5 2.5 5.1 5.8 5.1 Egypt,ArabRep 2.1 2.2 4.2 3.8 4.4 4.8 Iran,IslamicRep. -1.9 4.3 1.9 5.8 6.7 6.0 Algeria 2.8 3.8 2.8 3.9 4.0 3.8 SouthAsia 6.2 6.8 7.0 7.3 7.5 7.5 India 6.9 7.3 7.3 7.8 7.9 7.9 Pakistan 4.4 4.7 5.5 5.5 5.4 5.4 Bangladesh 6.1 6.5 6.5 6.7 6.8 6.8 Sub-SaharanAfrica 4.9 4.6 3.4 4.2 4.7 4.7 SouthAfrica 2.2 1.5 1.3 1.4 1.6 1.6 Nigeria 5.4 6.3 3.3 4.6 5.3 5.3 Angola 6.8 3.9 3.0 3.3 3.8 3.8 Global Economic Prospects Spillovers amidWeak Growth
  4. 4. 03 MTBiz ARTICLE OF THE MONTH United States Robust consumer spending and investment in the demand are weighing on exports and manufacturing Euro Area growth remain subdued among economies with high Japan China expansion of consumer spending and services has Renewed decline in commodity prices Oil: investment and drilling but was resilient for most of
  5. 5. 04 MTBiz ARTICLE OF THE MONTH Metals: Grain and oilseed prices Japan Spillovers from G7 excluding Japan South Asia headwinds from an increase in interest rates in the percentage point decline in BRICS growth is associated spillovers present challenges that need to be addressed B. Export growth Percent, quarter-on-quarter, seasonally adj. 50 30 10 -10 -30 -50 -70 Dec-14 Mar-15 Jun-15 Sep-15 India Pakistan Sri Lanka Bangladesh A. Commodity Prices Normal Index, 2010Q1=100 120 100 80 60 40 Energy Agricultural raw materials Metals 2011Q1 2011Q3 2012Q1 2012Q3 2013Q1 2013Q3 2014Q1 2014Q3 2015Q1 2015Q3
  6. 6. 05 MTBiz THE CENTRAL BANK BB issues risk management guidelines for NBFIs Management Guidelines for strengthen their overall booths their automated teller clients of three leading BB has awarded PSO license to SSL Wireless NATIONAL NEWS 1st Secured Online Payment Hub in Bangladesh R
  7. 7. 06 MTBiz THE CENTRAL BANK Debnath on behalf of Bangladesh government and the now able to operate business BB seeks info on treasury bonds from banks as the government has banking BB to train up 10,200 youths for SME sector makers
  8. 8. 07 MTBiz
  9. 9. 08 MTBiz BANKING INDUSTRY Default loans decline slightly default loans percent to crore in the last quarter restructuring On December Bank interest spread rises rate on deposit was decreased more than that of the weighted average rates on deposits came down to Home loan interest rates down to a record low Interest rates on home loans have plunged to the Banks slash rates on deposits, lower lending rates for the interest rates on points this month while lowered lending BRAC Bank, Le Méridien Dhaka sign agreement signed a Memorandum of special discount NATIONAL NEWS Weighted Average Interest Rates (Banking Sector: 2015) 11.51% 11.57% July Aug Banking Export Sep Oct Nov Dec Source: BB 6.78% 6.74% 6.66% 6.58% 6.46% 6.34% 11.44% 11.27% 11.35% 11.18% BANKS’DEFAULTLOANS In crores of taka Source: BB State Specialised Private Foreign SEP’15 DEC’15 5,287 23,744 22,727 24,578 20,760 4,968 2,115 1,897
  10. 10. 09 MTBiz BANKING INDUSTRY BRAC Bank launches Women’s Forum “Tara” Limited, formally launched the BRAC Bank Women’s health, household, lifestyle and other realms of City Bank signs agreement with DPDC City Bank P o w e r has recently
  11. 11. A R P C 10 MTBiz BANKING INDUSTRY Limited with t e c h n i c a l Limited (SSL S t a n d a r d C h a r t e r e d BRAC recently launched two
  12. 12. 11 MTBiz
  13. 13. 12 MTBiz MTB NEWS & EVENTS th A R P
  14. 14. 13 MTBiz MTB NEWS & EVENTS
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  16. 16. 15 MTBiz NON-FOOD INFLATION In % FOOD 6.8 6.35 6.73 6.67 6.56 7.05 8.74 4.33 5.485.725.895.926.066.07 Jul Aug Sep Oct Nov Dec Jan EXPORTTREND Jul Aug Sep Oct Nov Dec Jan SOURCE: EPB In billions of $ 2.63 2.76 2.62 2.37 2.75 3.2 3.19 BUSINESS & ECONOMY
  17. 17. 16 MTBiz BUSINESS & ECONOMY Sayedur Rahman Commerce and w o m e n not only created Since 1904 METROPOLITAN CHAMBER OF COMMERCE & INDUSTRY, DHAKA
  18. 18. 17 MTBiz BUSINESS & ECONOMY
  19. 19. 18 MTBiz INDUSTRY APPOINTMENTS Abu Asad joins Sonali Bank as DMD Syed Abu Asad has recently joined Sonali Bank Limited as its Deputy Managing Director. Prior to his new assignment, he was the general manager of the state-owned Rupali Bank Limited. During his 32-year banking career, Shahjahan new DMD of Sonali Bank AAM Shahjahan joined state owned Sonali Bank Limited as Deputy Managing Director in the city recently. Prior to this, he was General Manager of Agrani Bank Limited. He started his banking career at Agrani Bank Limited as in home and abroad. Pijush new DMD of Janata Bank Pijush Chandra Bhowal has joined Janata Bank Limited as Deputy Managing Director recently. He started his career in Bangladesh Manager in Khulna, Mymensingh trainings, seminars and symposiums held at home and abroad. Palli Shanchay Bank gets new DMD Feroj Khan has joined state owned Palli Shanchay Bank as Deputy recently. Prior to the joining, he was GM of Bangladesh Krishi Bank. He started his career in the same symposiums held at home and abroad. NRB Commercial reappoints MD Dewan Mujibur Rahman, a senior banker, has been re-appointed Commercial Bank Limited. Mr. Rahman has been performing as opening of the bank. Mr. Rahman started career with Agrani Bank as a trainings and workshops. He is a life member of Mamun made Standard Bank AMD Standard Bank. Mr. Mamun started his banking career by joining Bank as Deputy Managing Director Arif Khan elected ICMAB president Mr. Arif Khan FCMA was elected and Management Accountants of elected Mr. Jamal Ahmed Choudhury FCMA and Prof. Vice-Presidents, Mr. Md. Abdur Rahman Khan FCMA as Secretary and Prof. Dr. Swapan Kumar Bala FCMA as Khan FCMA was elected Vice President of ICMAB for NATIONAL NEWS
  20. 20. 19 MTBiz BUSINESS & ECONOMY German growth keeps eurozone economy steady Solid growth in p o w e r h o u s e Germany kept the eurozone e c o n o m y steady in late from global market turmoil and a sharp slowdown in China. quarter and in line with analyst forecasts. German gross weaker performances from southern countries by Bailed out Greece fell back into recession as its US retail sales edge higher in January rose modestly for the third straight month in January despite falling gasoline prices, according to the Commerce economy, and for Ian Shepherdson of Pantheon sales rise company started breaking out from the third quarter, from its snacks business, which includes Frito-lay and Doritos chips, also increased 2 percent in the region. in the quarter. Airbus says earnings grew demand for the aerospace and INTERNATIONAL NEWS
  21. 21. 20 MTBiz BUSINESS & ECONOMY Nasdaq to acquire news distributor Marketwired would acquire newswire operator and press release d i s t r i b u t e r Marketwired LP for an undisclosed sum, adding to the e x c h a n g e through a mix of debt and cash and is expected to close capital return strategy, the company said. Marketwired, Indonesia plans "big bang" opening of economy to foreign investment Indonesian President in an economy long dominated by powerful which will ease rules in the e-commerce, retail, establishment resistant to change. It would be the most Yuan Strengthens Sharply on Central Bank Cue C h i n a ’ s currency hit its the central bank guided it sharply up of stumbling central bank sets a daily reference rate and the yuan is August, in recent months the central bank has sought to to losses in markets around the world last week as the holiday. Iran Launches First Oil Shipments to Europe in Three Years crude prices, which already were struggling. Iran is a
  22. 22. 21 MTBiz BUSINESS & ECONOMY New Credit Extended by Chinese Banks Hits Monthly High high in January, as lenders front-loaded lending at the beginning of the year while Chinese companiescut foreign-currency debt and increased local borrowing as billion yuan data from the People’s Bank of China granted new loan quota, said HSBC economist Ma Xiaoping. On the other hand, as the yuan weakens taking out more yuan loans at home. low-cost carriers, and the growth of markets such as Indonesia, Myanmar and Vietnam, he added. Southeast HSBC bank stays in London, snubbing Hong Kong markets it would remain headquartered in Britain, of where to put its headquarters in April last year, two which has since been scaled down. German economic growth could pick up again modestly economy could expand at a slightly stronger rate than at in its latest monthly report. According to the preliminary household growing modestly, while lower exports had a start of this year. With oil prices falling further at the
  23. 23. 22 MTBiz BUSINESS & ECONOMY Lagarde named for 2nd term to lead IMF director of the Monetary Fund, was recently to a new term at the global emergency lender. But with the world economy slowing, and a number of emerging remain on the precipice, and new challenges are cropping up as a consequence of China’s slowdown and in resources to be used to support struggling countries and, when needed, rescue them and shepherd them fragile spending to pump up an economy that has wilted amid rate in three years. While state spending will likely Myanmar.
  24. 24. 23 MTBiz ECONOMIC FORECAST decline has been slower than expected owing to growth, but this was tempered in the fourth quarter by mild temperatures in the northern hemisphere reducing stocks, falling imports to China and India, and policies to capacity and slower seasonal demand. Precious metal demand is expected to strengthen somewhat with a modest pickup in global growth. producers that prolongs the surplus in the global oil from emerging market economies. On the other hand, demand prospects in emerging market economies and growth slowdown in China and larger than-expected prospects in emerging market economies and capacity expansion. INTERNATIONAL NEWS Source : World Bank TABLE Nominal Price Indices (Actual and Forecasts) and Forecast Revisions Energy 128 127 118 65 49 62 -24.7 25.8 -17.0 -8.3 Non-Energy 110 102 97 82 79 81 -3.7 2.2 -4.6 -4.3 Metals 96 91 85 67 60 63 -10.2 4.2 -9.2 -8.5 Agriculture 114 106 103 89 88 89 -1.4 1.6 -2.5 -2.5 Food 124 116 107 91 89 91 -1.7 1.9 -3.1 -2.8 Grains 141 128 104 89 86 88 -3.4 2.6 -5.0 -4.5 Oils and meals 126 116 109 85 83 86 -2.2 2.9 -4.2 -3.6 Other food 107 104 108 100 100 101 0.1 0.3 -0.1 0.0 Beverages 93 83 102 94 93 92 -0.9 -0.9 0.6 0.5 Raw Materials 101 95 92 83 83 85 -0.5 2.2 -2.6 -2.5 Fertilizers 138 114 100 95 92 92 -3.9 0.9 -3.3 -2.5 Precious Metals 138 115 101 91 83 83 -8.0 -0.3 -7.5 -6.7 RevisionChange (%)Price Indices (2010=100) 2012 2013 2014 2015 2016F 2017F 2015-16 2016-17 2016F 2017F
  25. 25. 24 MTBiz WELLS FARGO MONTHLY OUTLOOK U.S. Overview central feature of annual economic outlook and has Growing concerns about slowing global economic percentage points from growth this year. While direct control. beginning of the year has been linked to concerns about the global economic outlook. Wells Fargo expects the global economy grew roughly 3 percent in world, but it is not likely, by itself, to lead to recession in place, although the pace of GDP growth in these major slow growth in real GDP and lack of pricing power means that nominal GDP growth on a global basis soon. INTERNATIONAL NEWS Source: .S. Department of Commerce, IHS Global Insight and Wells Fargo Securi es, LLC 2 2 2 2 2 2 .S. Real GDP Bars = CAGR Line = r r Percent Change GDP - CAGR: Q2 @ 3. GDP - r r Percent Change: Q2 @ 2. Forecast 2 2 2 2 2 2 urozone Real GDP Bars = Compound Annual Rate Line = r r Change Compound Annual Growth: Q2 @ . er- rcent Change: Q2 @ . Forecast WELLS SECURITIES FARGO

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