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Daily News Flash

13th August 2020

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Table of Contents

Macro Economy ...... 1 THE RISE IN INVESTMENT-GDP RATIO CONFOUNDS ...... 1 SLOW PROGRESS IN FUND DISBURSEMENT ...... 1 THREE STATE BANKS ASKED TO SUBMIT ACTION PLANS SOON ...... 1 JAPAN OFFERS RECORD $3.15B CREDIT LINE ...... 1 STANDARD CHARTERED FORESEES FAST RECOVERY FOR BANGLADESH ...... 1 BJMC INVITES PVT INVESTORS TO VISIT CLOSED STATE-OWNED JUTE MILLS ...... 2 Bank and NBFI...... 2 NEW DACCA INDUSTRIES TO SELL 48.34 LAKH SHARES OF IFIC BANK ...... 2 BANKS SHOW RELUCTANCE TO GET REFINANCE SCHEME FUND ...... 2 Capital Market Specific...... 3 KRISHIBID FEED WITHDRAWS IPO DUE TO PANDEMIC HAVOC...... 3 ASSOCIATED OXYGEN UNDER FRC SCANNER ...... 3 SS STEEL TO INCREASE AUTHORISED CAPITAL TO TK500 CRORE ...... 3

Daily News Flash Thursday, August 13, 2020

Macro Economy

THE RISE IN INVESTMENT-GDP RATIO CONFOUNDS  Bangladesh's investment to gross domestic product (GDP) ratio rose in the just-concluded fiscal year, data from the Bangladesh Bureau of Statistics showed on Tuesday, in what can be viewed as an inexplicable development as most indicators were pointing towards a contrary scenario.  The finance ministry itself projected a far lower investment to GDP growth in fiscal 2019-20 as the economy came to a screeching halt in the last quarter for the coronavirus outbreak in the country.  It had revised down the investment target to 20.8 per cent for the last fiscal year from the 32.8 per cent initially targeted. Private investment target was re-fixed at 12.72 per cent from 24.2 per cent and public investment target was re-set at 8.1 per cent from 8.6 per cent. But BBS data showed the overall investment rose 18 basis points to 31.75 per cent last fiscal year, which was 31.57 per cent in fiscal 2018-19. Source: https://www.thedailystar.net/business/news/the-rise-investment-gdp-ratio-confounds-1944221

SLOW PROGRESS IN FUND DISBURSEMENT  Banks and non-bank lenders could disburse only Tk 15 billion of the stimulus package until July 30 for smaller firms.  The disbursed amount is just 7.50 per cent of total Tk 200 billion financial support meant for small and medium enterprises (SMEs). The support is to help the SMEs weather the adverse impact of the Covid-19 pandemic.  Loans amounting to Tk 27.50 billion were sanctioned to more than 8000 SMEs during the period, according to central bank's statistics. Source: https://today.thefinancialexpress.com.bd/first-page/slow-progress-in-fund-disbursement-1597251797

THREE STATE BANKS ASKED TO SUBMIT ACTION PLANS SOON  The government has asked three state-owned banks to immediately submit time-bound action plans for spending Tk 7.50 billion which has been allocated by it as grant, officials said.  Non-scheduled Palli Sanchay Bank, Karmasangs than Bank and specialised Probashi Kallyan Bank have received the government grant of Tk 2.5 billion each.  The grant has been provided with an aim to soften the impacts of the Covid-19 pandemic and expedite the country's economic activities including keeping employment, production and supply situation stable in the country, a source said. Source: https://today.thefinancialexpress.com.bd/last-page/three-state-banks-asked-to-submit-action-plans-soon-1597250584

JAPAN OFFERS RECORD $3.15B CREDIT LINE  Japan on Wednesday confirmed a record US$3.15 billion in loans for Bangladesh to bankroll seven development projects, Economic Relations Division (ERD) officials said.  The funds under the 41st Official Development Assistance (ODA) package would be utilised for constructing the country's two metro rail lines, upgrading transport system, improving food security while developing urban areas, a senior ERD official told the FE.  In May last year, Japan provided the 40th ODA loan package worth $2.5 billion for financing five projects. Source: https://today.thefinancialexpress.com.bd/first-page/japan-offers-record-315b-credit-line-1597252356

STANDARD CHARTERED FORESEES FAST RECOVERY FOR BANGLADESH  Bangladesh may recover faster from the pandemic-ravaged economic slowdown than many other economies, a leading global bank says, analysing the trends in some key indicators including external balance.  Balance of payment surplus, a healthy foreign exchange reserve and very low public debt-GDP ratio are among the factors that give Bangladesh room for boosting the growth, members of the global

1 Back to Table of Contents Daily News Flash Thursday, August 13, 2020 research team of Standard Chartered Bank said in a digital briefing Wednesday. The briefing was joined by a group of selected journalists from Dhaka-based newspapers.  Despite a global recession which is shaping up to be historic in scale, Bangladesh might be one of only two ASEAN and South Asian economies – the other being Vietnam – to register a positive growth in 2020, said Edward Lee, chief economist of Standard Chartered for ASEAN and South Asia. Source: https://tbsnews.net/economy/standard-chartered-foresees-faster-recovery-bangladesh-118633

BJMC INVITES PVT INVESTORS TO VISIT CLOSED STATE-OWNED JUTE MILLS  The Bangladesh Jute Mills Corporation (BJMC) has invited the country’s private sector entrepreneurs to visit the closed state-owned jute mills by August 20 to see the status of the units’ machinery, assets and establishments in a bid to reopen the mills under private initiatives.  The BJMC on Tuesday issued a notification inviting entrepreneurs and investors from the private sector to go for field visits so that they could get the real picture of the machinery and other assets of the mills and can give opinions on the models of reopening of the mills.  The corporation took the initiative as per a decision made by the policymaking committee on preparation of work plan and strategy for best use of closed jute mills and other assets of the BJMC and the recommendations from the private sector to encourage potential investors to come forward with investment in the sector. Source: https://www.newagebd.net/article/113337/bjmc-invites-pvt-investors-to-visit-closed-state-owned-jute-mills

Bank and NBFI

NEW DACCA INDUSTRIES TO SELL 48.34 LAKH SHARES OF IFIC BANK  New Dacca Industries Ltd, a sister concern of Beximco Group, wants to sell 48.34 lakh shares of IFIC Bank Ltd through the block market at the Dhaka Stock Exchange (DSE) within the next 30 days.  New Dacca Industries is a corporate sponsor of IFIC Bank and holds 2.41 percent or 3.54 crore of the bank's total shares. After selling the shares, the company's holdings with the bank will be 2.08 percent.  According to the DSE, IFIC Bank reported consolidated earnings per share (EPS) of Tk1.92 in the 2019 financial year, which was 71 percent higher than the previous year. Source: https://tbsnews.net/economy/stock/new-dacca-industries-sell-4834-lakh-shares-ific-bank-118597

BANKS SHOW RELUCTANCE TO GET REFINANCE SCHEME FUND  Disbursement of refinance to the banks from the Bangladesh Bank’s Tk 15,000 crore-scheme, designed to support the banks with liquidity for implementation of the Tk 30,000-crore stimulus package, has drawn little attention in around four months of its formation.  BB officials and bankers said an increase in excess liquidity in the banking system in the first half of this year along with slow disbursement of stimulus loans are the reasons for the banks’ little interest to get refinance.  Immediately after the announcement of the stimulus package by the government, the central bank formed the refinance scheme for quick implementation of the package in April this year. Source: https://www.newagebd.net/article/113336/banks-show-reluctance-to-get-refinance-scheme-fund

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Capital Market Specific

KRISHIBID FEED WITHDRAWS IPO DUE TO PANDEMIC HAVOC  Krishibid Feed Limited has withdrawn its application of Initial Public Offering (IPO) from the Bangladesh Securities and Exchange Commission (BSEC).  The company wanted to raise Tk30 crore from the stock market to expand its business. Due to the worldwide Covid-19 pandemic, Krishibid Feed's business, like many others, has been affected seriously. Especially its production and supply sides were affected significantly.  The management of Krishibid Feed is concerned that the pandemic would further disrupt their business. So, they decided to withdraw the application for IPO. Source: https://tbsnews.net/economy/stock/krishibid-feed-withdraws-ipo-due-pandemic-havoc-118654

ASSOCIATED OXYGEN UNDER FRC SCANNER  The Financial Reporting Council is investigating the financial data of Associated Oxygen Limited on suspicion of anomalies.  The Bangladesh Securities and Exchange Commission, however, on July 15 approved the initial public offering of Associated Oxygen despite Dhaka Stock Exchange’s reservations about the company’s IPO.  FRC executive director Sayeed Ahmed told New Age that the regulatory body had recently launched an investigation into the Associated Oxygen’s financial documents on suspicion of financial flaws. Source: https://www.newagebd.net/article/113339/associated-oxygen-under-frc-scanner

SS STEEL TO INCREASE AUTHORISED CAPITAL TO TK500 CRORE  SS Steel has decided to increase its authorised capital to Tk500 crore from Tk300 crore.  The company will also table its decision to acquire Saleh Steel Industries Limited before the EGM. The record date for the EGM has been set for September 3.  Also, SS Steel will invest Tk134 crore in Saleh Steel. Following the move, Saleh Steel will issue new shares to SS Steel. Source: https://tbsnews.net/economy/stock/ss-steel-increase-authorised-capital-tk500-crore-118606

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EBLSL Research

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