News summaries from leading newspapers and online news outlets in Bangladesh

1. MORNING NEWS SNIPPET
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Banks’ share mkt exposure deadline ends today
Source: Daily Star
Almost all banks have complied with the share market exposure regulations, as the deadline in
this regard ends today (Thursday), officials said. Three banks are set to receive approval from the
central bank in this connection today after completing all formalities, they added. The banks are
Janata, IFIC and Bangladesh Development Bank Limited (BDBL). “The approvals of three banks
are now at final stage,” a senior official of the Bangladesh Bank (BB) told the FE on Wednesday.
He also said: “We hope that the banks will receive their letters of approval within Thursday.” The
central bank earlier provided approvals to ten other commercial banks for adjustment of their
capital market overexposures with its policy supports. On April 27, BB extended policy supports
to the banks for adjustment of their stock market overexposures within the stipulated timeframe
without selling any shares in the market. Under the revised policy, the banks are now allowed to
adjust their overexposures through restructuring the exposure components and enhancing the
capital of their subsidiaries with some internal adjustments. “We’ve provided policy supports to
the banks for maintaining legal requirements within the stipulated timeframe,” BB deputy gover-
nor S K Sur Chowdhury told the FE. The country’s banks are able to adjust their overexposure in
the capital market within the permissible limit without selling shares in the market, the deputy
governor explained. A total of 13 banks, out of 56, had more than 25 per cent capital market
exposures in May 2016, while all banks’ average capital market exposures stood at 22 per cent
in that time. “All 13 banks may invest again in the share market after adjustment of their overex-
posures,” Mr. Sur Chowdhury further said. The central bank earlier instructed the banks to bring
down their overall capital market investments within 25 per cent of their respective total capital
by July 21, 2016 in line with the Banking Companies (Amended) Act 2013.
GP ready to offer 4G services
Source: Daily Star
Grameenphone is ready to offer fourth generation (4G) mobile services now, its chief executive
said. Rajeev Sethi said they have enabled their 10,026 sites with faster internet (3G) technology
and all these sites can provide fourth generation telecom services. “For doing so, we only need
spectrum neutrality,” Sethi said in an interview on Tuesday. “We found there is demand for faster
internet services.” Users are watching videos and they do not bother which technology they are
using. “Right now we found Bangladeshi customers are searching for more and more video con-
tents. Users are even watching TV through mobile network.” Once the 4G network is ready, the
number of customers using this technology will rise drastically, he said. The number of 3G-en-
abled sites of Grameenphone was 10,026 in June. Spectrum neutrality, which allows operators
to provide any kind of services using any spectrum, will benefit end-users the most, Sethi said,
adding that most markets in the world enjoy spectrum neutrality. Operators in some countries
are even thinking about 5G technology, he said. Grameenphone, with the help of technology
equipment vendor Huawei, already gave its network a test run for 4G services and found huge
speed. During the trial run, the operator used spectrum in the 2100 band though 1800 band is
most popular worldwide for 4G services. “Grameenphone is the first company to take the ben-
efits of mobile telephony to every town, every village and every house of the country, and now
we want to do the same in the internet segment,” said Sethi. The operator’s 3G service covers
more than 90 percent population of the country, he said. Not many countries saw this extensive
expansion in such a short time.
Meghna Group to get go-ahead for first private economic zone
Source: Daily Star
The Meghna Economic Zone of Meghna Group of Industries is all set to receive investments from
home and abroad, as the first private economic zone is going to obtain the final nod from the
authority next month. It is one of the two economic zones being developed by Meghna Group
of Industries at Sonargaon in Narayanganj. An economic zone is a designated area in a country
with special economic regulations that differ from the rest of the country. An entrepreneur can
enjoy various benefits, including tax incentives, from the authorities by setting up an industrial
unit in an economic zone. Meghna Group has completed the environmental impact assessment,
feasibility study and a master plan of the economic zone as per the conditions of a prequalifica-
tion licence, which it received last year. Bangladesh Economic Zones Authority (Beza) will award
the final licence to Meghna next month, officials said. The preparatory work is complete, and
investment will begin now, said Paban Chowdhury, executive chairman of Beza. Mostafa Kamal,
chairman of Meghna Group, said entrepreneurs from Japan, China and Korea as well as some big
local companies have already showed their interest to set up industrial units in the zone. “We are
in talks with a Chinese entrepreneur who intends to set up a PVC plant of around $300 million
in the economic zone,” he said. He said Meghna Group itself got around $87 million in foreign
currency loan to set up four factories for edible oil, chemical, flour and paper in the economic
zone. The zone is situated on 245 acres of land on the bank of river Meghna in Sonargaon, very
close to the Dhaka-Chittagong highway. The economic zone will create more than 20,000 jobs at
various levels. “However, the employment opportunities may be higher if someone sets up la-
bour intensive industrial units such as garment factories in the zone,” said Kamal. The economic
zone is suitable for industries like pulp and paper, tissue paper, sanitary napkin, baby diaper, PVC
plant, oil refinery, flour mill, power plant, petrochemicals, ceramics and LPG plant.
JULY 21, 2016
Market Snapshot
Yesterday's Closing
DSEX Index 4,554.6
DS30 Index 1,779.8
DSES Index 1,115.8
Turnover (BDT Mn) 3,450.4
Turnover (USD Mn) 44.0

2. MORNING NEWS SNIPPET
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China, Japan provide new hope for garment makers
Source: Daily Star
Garment exports to China and Japan, two new markets, soared in fiscal 2015-16 -- the strongest
sign yet of the growing stature of Bangladesh’s apparel sector in global trade. Last fiscal year,
garment exports to Japan stood at $774.47 million, up 18.68 percent year-on-year, according to
data from the Export Promotion Bureau. Some $341.22 million of garment items were shipped
to China in fiscal 2015-16, an increase of 11.9 percent from a year earlier. The reason for the
uptick is the recent relaxation of the rules of origin (RoO) by the governments of the two coun-
tries. The RoOs are the criteria used to determine the national source of a product, and they vary
from country to country. Their importance is derived from the fact that duties and restrictions in
several cases depend on the source of import. For instance, Bangladesh has duty-free access for
its garment products, even for items made from imported fabrics, to the Japanese market. The
country has been enjoying duty benefits on its woven garment exports to Japan for many years
now, and from April last year, its knitwear shipments were given the same privilege. Japan’s ap-
parel market is worth about $40 billion a year, and traditionally nearly 80 percent of it is catered
by Chinese imports. In 2008, the Japanese government adopted the ‘China plus One’ policy
to reduce the overdependence on China, following which its traders started sourcing garment
items from other countries such as Bangladesh, Vietnam and Cambodia. On the other hand,
Bangladesh’s garment exports to China also increased last fiscal year as the Chinese government
awarded duty-free facility to 4,721 items.
B’desh RMG to get ‘top position’ soon: UNCTAD chief
Source: New Age
Terming Bangladesh’s progress in readymade garments sector an instance for other countries,
UNCTAD secretary general Mukhisa Kituyi opined Bangladesh’s RMG sector would conquer top
position in the world soon. The UNCTAD secretary general expressed his observation during a
view exchange meeting with industries minister Amir Hossain Amu at Kenya International Con-
vention Centre in Nairobi. Praising the progress of Bangladesh’s leather, plastic and pharmaceu-
tical industries, Mukhisa said Bangladesh’s achievement in these three sectors would be a role
model for other countries. He told the industries minister that he would highlight the issue in the
closing session of World Investment Forum to disseminate the information to the world business
leaders. The industries minister said Bangladesh’s RMG is continuing its upward growth defying
global economic meltdown due to government patronization and efficiency of the entrepre-
neurs. Amu invited the UNCTAD secretary general to visit Bangladesh.
Russia clears $11.38b for Rooppur plant
Source: Financial Express
Bangladesh got Japan and Belgium as its two new billion-dollar export markets in the just con-
cluded financial year 2015-16, riding on a moderate growth in the readymade garment export
Export earnings from Japan in FY 2015-16 totalled $1.07 billion, which is 17.95 percent higher
from $915.21 million posted in FY15, while earnings from Belgium grew by 4.12 percent to $1.01
billion from $975.13 million, according to Export Promotion Bureau data. The data also showed
that the country’s export to the United States in FY16 was $6.22 billion in value with 7.55 per-
cent growth from $5.78 billion in FY15. Earnings from the RMG export to the US in FY16 grew by
6.37 percent to $5.62 billion from $5.28 billion in FY15. Experts and exporters said it was a good
sign that Bangladesh’s exports to Japan and Belgium exceeded the billion-dollar mark but the
dependency of the country’s export earnings on only one product (RMG) remained as weakness.
Brexit prompts IMF to cut global growth forecasts
Source: Dhaka Tribune
The International Monetary Fund (IMF) cut its global growth forecasts for the next two years
yesterday, citing uncertainty over Britain’s looming exit from the European Union. The move
included a nearly full percentage-point reduction in the UK’s 2017 growth forecast. Cutting its
World Economic Outlook forecasts for the fifth time in 15 months, the IMF said that it now
expects global GDP to grow at 3.1% in 2016 and at 3.4% in 2017 - down 0.1 percentage point
for each year from estimates issued in April. The Fund said that despite recent improvements in
Japan and Europe and a partial recovery in commodity prices, the UK’s Brexit vote had created
a “sizeable increase in uncertainty” that would take its toll on investment and market and con-
sumer confidence. On the day before Britain’s June 23 EU referendum, the IMF was “prepared
to upgrade our 2016-17 global growth projections slightly,” IMF chief economist Maury Obstfeld
said in a statement. “But Brexit has thrown a spanner in the works.” The IMF said that the im-
pact will hit hardest in Britain itself, where the institution cut its 2016 growth forecast to 1.7%,
down 0.2 percentage points from its April forecast. It cut the 2017 UK forecast more sharply, by
0.9 percentage points, to 1.3%. The IMF lifted its euro zone forecast slightly for 2016, but cut its
2017 outlook by 0.2 percentage point to 1.4% for 2017. It said last week that Brexit would have
a “negligible” impact on the United States. The IMF noted that its latest forecasts were made
under relatively benign assumptions of a settlement between the EU and Britain that leads to
limited political fallout, avoids a major increase in economic barriers and prompts no major
further financial market disruptions.
JULY 21, 2016
UCB Capital Management
Research