Monthly Archives: December 2010

The year of investors

The year of investors

Sarwar A Chowdhury

It was a boon year for investors, although a record fall this month created adrenaline panic among those who put their money in stocks. There is hardly any investor who made loss in 2010.

The stockmarket witnessed a boom from all sides — the price index, turnover, market capitalisation and its ratio to GDP (gross domestic product), and the number of new arrivals both in terms of issues and investors.

The Dhaka market ranked third globally in terms of performance, according to an analysis of LankaBangla Securities.

The record growth also helped the government get manifold revenues. In 2010, the government received Tk 315 crore tax at source against only Tk 62 crore a year ago.

From January 3 to December 30, the benchmark index of Dhaka Stock Exchange went up by 3,754 points, or 82 percent, to 8,290. The listing of record number of 25 new securities and a continuous rise in prices led the jump in the index.

The total turnover shot up by 172 percent to Tk 400,991 crore, while the transactions went up by 113 percent to 1,697 crore shares and mutual fund units.

Market capitalisation reached Tk 350,000 crore — registering a 84 percent rise. The market capitalisation to GDP ratio stood at 51 percent at the end of 2010.

The bullish trend forced the Securities and Exchange Commission (SEC) to come up with a number of cooling measures.

But the piecemeal regulatory intervention was always criticised by the market intermediaries, analysts and experts. The experts always said the regulator should take long-term measures.

However, the SEC made some positive changes to some of the securities laws. Change in the IPO (initial public offering) rules was a notable one — after the amendment to the regulations, many non-listed companies are now showing their interest to come in the market.

The market needs to be more professional, the experts said.

“There has been improvement in terms of price index, turnover, and entry of new mutual funds and fresh investors,” said Faruq Ahmad Siddiqi, head of capital market wing of Southeast Bank and a former chairman of the SEC.

“However, with the rise in share prices, increased the risk factors. These risk factors can be minimised through professionalism and educating the retail investors,” he said, adding that the regulator should also take more consistent policies.

Leading stockbrokers also think professionalism should be main agenda in the coming years. “Our stockmarket has grown up, and we now need to be more professional,” said Mohammed Nasir Uddin Chowdhury, chief executive officer of LankaBangla Securities.

Bangladesh Institute of Capital Market, which started its journey last month, will play a great role in bringing professionalism in the market, he said.

Although a bullish trend dominated the market most of the time in the year, the market witnessed some dramatic and record falls in December that prompted hundreds of investors to take to the street.

December 19 was a black day for the Bangladesh stockmarket’s 55-year history, as the index on that ‘Black Sunday’ dropped by 551 points that the market even did not witness in 1996 crash.

Finally, the Dhaka market completed a lucrative year ending on the last trading session of 2010 in green with the investors’ optimism of better corporate declarations and return in 2011.


UK-China JV to invest $40m in Comilla EPZ

UK-China JV to invest $40m in Comilla EPZ
Bangladesh Sangbad Sangstha . Dhaka

Kadena Sportswear Limited, an UK-China joint venture company, will set up a knit and woven garments manufacturing units in the Comilla Export Processing Zone. This foreign owned company will invest $40.44 million in setting up their unit and will manufacture garments items.

The company will also create employment opportunity for 8,030 persons including 30 foreign nationals.

An agreement to this effect was signed between the Bangladesh Export Processing Zones Authority and the Kadena Sportswear Limited at BEFZA Complex in the city.

Moyjuddin Ahmed, member (investment promotion) of BEPZA, and Leonidas Loukaides, chairman of Kadena Sportswear Limited, signed the agreement on behalf of their respective organisations.

BEPZA executive chairman Major General ATM Shahidul Islam, member (finance) AKM Mahbubur Rahman, general manager (investment promotion) AZM Azizur Rahman and other officials of BEPZA were present on the occasion.

Turkish co to invest in infrastructure

Turkish co to invest in infrastructure
M Azizur Rahman

A Turkish private asset management firm RHEA has planned to invest in infrastructure including power plants through public private partnership (PPP) in the country, its officials said.

A high-powered delegation of the Istanbul-based company is now in the city for talks with the government.

The RHEA team led by its head of asset management Memet Yazici discussed the company’s prospective investment sectors with the Communication Minister Syed Abul Hossain and State Minister for Power and Energy Muhammad Enamul Haque.

Power plants, roads and bridges, ports development, major airport construction and urban transport facilities like rails and light rails are the sectors the Turkish company is planning to invest in Bangladesh, a power ministry official said.

The company also inquired about the Bangladesh’s offshore oil and gas prospects in the Bay of Bengal.

“The (Turkish) firm is interested to materialise its investment plan within the shortest possible time,” the official said.

The Turkish investment plan comes at a time when the government has moved to implement several infrastructure projects including flyovers, bridges, elevated expressway under PPP.

The government is seeking foreign investment to implement these cash-intensive projects.

“RHEA is interested to initiate business in Bangladesh as part of its business expansion plan in new markets,” managing director of the company’s local representative Syed Salman Masud told the FE.

He said the company intends to do business with the government in Bangladesh as it seeks “confirmation over return of its investment.”

RHEA is a reputed firm with extensive global investment management experience.

Apart from its strong presence in Turkey, the RHEA has offices in Dubai, UAE; Bucharest, Romania; London, UK to conduct global operations.

Earlier in February this year RHEA offered Bangladesh a US$1.0 billion “conditional soft loan” to win infrastructure deals.

It also pledged a $5 million donation for health care and educational projects in Bangladesh if the government awards work orders to Turkish builders for building flyovers and bridges.

Although the government is yet to come up with any decision, a senior official said the Finance Ministry is in favour of securing the Turkish conditional loan.

New 30 TTCs to train 1 lakh workers a year

New 30 TTCs to train 1 lakh workers a year
Bangladesh Sangbad Sangstha . Dhaka

New 30 technical training centres, which are now under construction by the expatriate welfare and overseas employment ministry, are likely to create one lakh skilled workers every year to send abroad.

‘Existing 38 TTCs are creating around 30,000 trained workers but after building of 30 new TTCs we will be able to produce nearly one lakh trained workers every year,’ expatriate welfare and overseas employment minister Khandakar Mosharraf Hossain said while exchanging views with principals of TTCs at his secretariat office in the city on Wednesday.

The ministry is building 30 new TTCs and five marine training institutes in Munshiganj, Faridpur, Chandpur, Sirajganj and Bagerhat to send skilled workers abroad.

The five new marine training institutes will produce 3,000 skilled diploma marine engineers annually. Now, only 600 marine diploma engineers are coming out from the country’s lone marine training institute in Narayanganj.

The minister said the government was focused in sending more skilled workers abroad, as only three per cent (two lakh) among the current total overseas workforce are skilled and 31 per cent (21 lakh) are semi-skilled against 50 per cent (33 lakh) unskilled workers.

He said there is no alternative of extension of vocational training side by side the general education to bring success in poverty alleviation.

Mosharraf urged the principals of TTCs to encourage women in taking various technical training before go to the foreign lands.

The overseas employment sector is turning into the engine of country’s economy with last year’s remittance standing at Tk 78,000 crore, where the total budget of the government was around taka one lakh crore.

Remittance earning presently contributes to 12 per cent of the GDP, six times higher than overseas development assistance and 11 times than foreign direct investment. Around 76 lakh Bangladeshi workers were employed in more or less 100 countries whereas, the number of total government employees across the country is just over 10 lakh.

ASA to open 300 SME branches in 2011

ASA to open 300 SME branches in 2011
Star Business Desk

ASA, one of the largest microfinance institutions in Bangladesh, will open 300 branches across the country in 2011 to cater small entrepreneurs.

The organisation also plans to disburse Tk 8,000 crore in loans to restructure credit schemes to make them more flexible for clients.

The plans were disclosed at the MFI’s three-day annual coordinating meeting at Cox’s Bazar on December 29-30, the company said in a statement yesterday. ASA President Md Shafiqual Haque Choudhury attended the programme as the chief guest.

“Scholarship, health, sanitation and solar programmes of ASA will be extended to cover more people in 2011,” said Choudhury, also a former caretaker government adviser.

In the New Year, the MFI will also start 500 irrigation schemes using solar power.

Over 150 delegates from districts and head office of the institution including top officials and directors participated in the event.

Since its inception in 1978, ASA has extended its outreach in the country through 3,236 branches. Its 24,021 employees serve over 55 lakh clients.

Microenterprise clients of ASA now account for over 10 percent of its clients and about 30 percent of its total loans outstanding.

Govt to make Ctg Chemical operational next year

Govt to make Ctg Chemical operational next year

The government hopes to complete three major tasks in the industrial sector including cut dependence on import of Urea fertiliser and resume production at Chittagong Chemical Complex (CCC) in the coming year.

Though the Industries Ministry could not resume production at the CCC and give final shape to Shahjalal Fertiliser Factory this year as pledged earlier, it hopes to complete the two major tasks next year.

The annual demand of Urea in the country is about 2.83 million tonnes and the country address the demand mostly depending on import from Qatar, the UAE and Saudi Arabia.

While talking to UNB, Industries Minister Dilip Barua said they hope to implement all the plans they had taken this year.

“There are a number of successes. I don’t think any major task was left half-done last year. New National Industrial Policy 2010, keeping fertiliser production smooth despite gas crisis and introduction of digital-purji are three major successes we achieved this year,” he said.

Aman rice production exceeds target by 9.57 percent in Rangpur Zone

Aman rice production exceeds target by 9.57 percent in Rangpur Zone

PANCHAGARH, Dec 30 (BSS) – The farmers have produced a record quantity of 29,60,357 tonnes Aman rice, 9.57 percent higher than the fixed target of 27,01,694 tonnes rice, in all eight districts under Rangpur Agriculture Zone (RAZ) this season, officials said today.

The farmers had cultivated T-Aman crop in 10,84,863 hectares land this season against the fixed target of bringing 10,74,03 hectares and they got a super bumper rice production due to average favourable climatic conditions and massive pro-farmer steps taken by the government.

Of them, 36,816 tonnes hybrid Aman rice was produced from 12,694 hectares, 27,94,711 tonnes high yielding Aman rice from 9,93,221 hectares and 1,28,830 tones local variety T-Aman trice from 78,948 hectares land, said Additional Director of the Department of Agriculture Extension (DAE) Mohsin Ali.

The achieved yield rates of hybrid variety Aman stood at 2.9 tonnes clean rice per hectare this time against 2.89 tonnes last year, 2.81 tonnes for high yielding variety against 2.65 tonnes last year and 1.63 tonnes for local variety Aman rice against 1.50 tonnes last year.

The crop grew well and the government extended allout supports to the farmers in achieving the super bumper Aman production this time in the zone.

Rice scientist Dr MA Mazid told BSS that the farmers could successfully cultivate the Aman paddies and many of them also used the latest technologies this season that assisted in achieving the bumper Aman production.

Farmers Abdul Karim, Zulfikar Ali and Abdul Aziz told that they are very happy getting excellent Aman yields and have now engaged their allout efforts to make the Boro and Rabi crops farming programme successful.

They expressed huge satisfactions over the present market prices of the newly harvested Aman paddy in between Taka 8850 and 950 per maund (every 40 kgs) depending on the varieties and qualities in the local markets of region.