Shinepukur Ceramics eyes Tk 40cr net profit
November 18, 2008
Shinepukur Ceramics, a subsidiary of Beximco Group, has set a target of generating a net profit of Tk 40 crore within next two years, officials said. The company, which manufactures bone china and porcelain tableware, also aims to reach Tk 261 crore in sales revenue by 2010.
DSE records marginal gain
November 12, 2008
The Dhaka Stock Exchange (DSE) registered marginal gains on Tuesday amid volatile trading as investors by and large played indecisive. The rise is for the second consecutive day as the market bounced back sharply on Monday after demonstration by the small investors and expectation from the regulator’s initiative of holding meetings with the stakeholders to identify problems and take corrective measures.
Dhaka stocks bounce back
November 5, 2008
Dhaka stocks bounced back on Tuesday mainly due to institutional buying after the SEC’s market-review meeting with the merchant banks and stock exchanges, said market operators.
The general index of the Dhaka Stock Exchange gained 86.60 points, or 3.29 per cent, to close at 2720.43, while its blue chips index, DSE20, advanced by 50.53 points, or 2.23 per cent, to finish at 2318.45.
Market system blamed only when it comes to reducing prices
November 3, 2008
‘Pass through’ takes time: BB chief economist
UNB, Dhaka
Bangladesh Bank Chief Economist Dr Mustafa K Mujeri on Sunday shifted the responsibility of unjust pricing of essentials on the country’s weak market system as prices on the local market go up even faster than the international ones while come down much later than the global price fall.
The ‘pass through’ of the reduced prices on the international market would be felt on the local market as a ‘lagged effect’ early next year, he said at a press briefing marking the release of Bangladesh Bank Quarterly (July-Sept) at the central bank.
In a short-term outlook, the quarterly estimated a reduced inflation at a range between 9 and 8.5 per cent (the current budget estimated it at 9 per cent) at the end of the current fiscal year considering the substantial price fall, almost half in most cases, on the international market and an optimistic outlook for local agriculture production.
“The pass through takes time,” he said, replying to a question as to why the impact of reduced prices on the international market has been so slow.
Replying to a supplementary, he said the ‘pass through’ does not take place properly in the country for lack of a structured market. “The market system has not yet fully developed… it has a weakness,” he said.
Asked whether the central bank has any role in ensuring ‘pass through’ properly or the bank would suggest other government agencies to take necessary measures in this regard, he said, “The government may intervene in the market, but it’s not sure whether it would always be realistic.”
He hastened to say that such initiative in the recent past did not work rather had an adverse impact on the market. “As the price tends to be declining, I don’t think government intervention would bode well.” he added.
In his opening remarks on the short-term outlook, Dr Mujeri insisted that there is no alternative to ensuring proper government intervention and control mechanism against the backdrop of the current global financial crisis. “That does not mean, these should be completely controlled,” he said, adding that the weaknesses in the monitoring system need to be removed.
The quarterly estimated that the supply-side pressure would be reduced in the coming months easing pressure on the inflation situation.
He said there was no impact on the market earlier despite having a bumper boro harvest in the last season on expectation that the prices would be much higher later. But, the hoarders of all levels are now selling out their rice, he added.
“It has now started influencing the market pushing down the rice price,” he said, adding that the food inflation would further come down in the coming months. “The food inflation would also help reduce the non-food inflation.”
He, however, cautioned that the rapid credit growth would have an adverse impact on the inflation unless the money used in the productive sector.
The quarterly also estimated a GDP growth of 6.2 to 6.5 per cent for the current fiscal year as compared to budget estimate of 6.5 per cent. The chief economist said they have been a bit cautious in estimating the growth projection considering the possible impact of global financial crisis in the long term. “The possible impact of the financial crisis is still unclear… it’s an uncertain situation.”
Dr Mujeri said the growth momentum in the real sector during the last two quarters of the last fiscal year continued in the first quarter of the current fiscal year while agriculture and private sector credit grew significantly during the period.
The construction sector is expected to get back its previous growth trend after a while as the prices of construction inputs started declining, he added.
“The real sector growth in the first quarter remained consistent with the growth target for the current fiscal year,” he said, stressing the need for proper implementation of the support policies and proper utilization of the faster credit growth in the private sector.
The quarterly urged the need for priority action in view of certain critical constraints, including weak infrastructure, power shortage, transportation bottlenecks, market instability and inefficiencies in raising workers’ remittance and exploring new labour markets.
It said, “Moreover, ensuring a congenial business climate and reasonable socio-economic stability against the backdrop of national elections in December 2008 are priority issues.”
Source: The Daily Star
How far have emerging markets fallen?
October 26, 2008
Once thought “decoupled” from economic crisis in the West, emerging markets are now taking the brunt of recent global financial turmoil with stock markets and currencies slumping in value.
Western investors and hedge funds have dumped anything considered risky, almost regardless of local fundamentals.
Falling currencies have endangered repayment of foreign currency loans, threatening local banking sectors. Emerging borrowers are finding it almost impossible to refinance debt.
Below are some facts about recent emerging market falls.
EMERGING STOCK MARKETS
* Globally, emerging stock markets have lost 60 percent of their value since May, slumping to their lowest in four years and losing 38 percent in October alone.
* Russia’s stock market has been one of the biggest losers, down 75 percent this year as war with Georgia, worries over government interference in investments, global problems, bank worries and falling oil prices sent capital fleeing.
* Among other key emerging markets, Brazilian stocks have lost 47 percent, Indian stocks have lost 57 percent and Chinese stocks 65 percent this year.
CURRENCIES SLUMP
* Emerging currencies are also broadly sold off, with countries with large current account deficits and political risk suffering particularly. South Africa’s rand is down 40 percent against the dollar this year, while the Turkish lira has lost more than 30 percent.
DEBT SEEN MUCH RISKIER
* Emerging sovereign debt spreads — a measure of how risky emerging sovereign debt is seen relative to U.S. Treasuries — have more than doubled this year to their widest in six years.
* The cost of insuring emerging market debt in the credit default swaps market has also ballooned to several times the cost earlier in the year, with several countries including Pakistan and Ukraine pricing in probable default.
* Ratings agencies have downgraded a string of countries particularly in central and eastern Europe on deteriorating macroeconomic conditions and the cost of bailing out troubled local banks.
CRISIS HOTSPOTS
* Iceland’s highly indebted banking sector collapsed, taking with it the currency and broader economy and leaving the country dependent on a bailout from either the International Monetary Fund or possibly Russia.
* Other countries seen talking to the IMF about help include Pakistan, Belarus, Serbia, Hungary, Turkey and Ukraine.
* Central and eastern European economies are seen heavily exposed, with banking sectors under increasing pressure and requiring government support.
Source: bdnews24
Asia stocks recover, but economy fears loom
October 20, 2008
Most Asian stock markets rallied on Monday, with valuations growing more attractive, and oil prices rose ahead of an expected supply cut at an emergency OPEC meeting this week, but a threat of global recession haunted investors.
The cautious buying of equities did not translate into a move out of government bonds, with Japanese government bond futures climbing and US Treasury futures nearly unchanged on the day, suggesting investors were still reluctant to take risks.
Governments around the world rushed out further steps to help the private sector, pledging so far well in excess of $3 trillon to try to stabilise financial markets and resuscitate the banking industry which has been badly damaged by a crisis of confidence.
South Korea promised $130 billion in state guarantees and capital injections and the Dutch government said it would prop up ING with around 10 billion euros.
“A slew of recent policy actions worldwide has provided some relief to the banking sectors in the major economies,” said Kengo Suzuki, a currency strategist at Shinko Securities in Tokyo. “But the state of the market remains very fragile with worries mounting about the global economy and emerging markets,” Suzuki said.
The MSCI index of Asia-Pacific stocks outside Japan rose 1.2 percent. The index suffered a seventh consecutive week of losses last week and remains down 52 percent so far this year.
Hong Kong’s Hang Seng index jumped 2.2 percent, but is down 17.3 percent so far this month.
Japan’s Nikkei average edged up 0.5 percent, though it is down 19 percent in October.
South Korea’s KOSPI fell 1.9 percent, weighed down by stocks with large exposure to global economic trends such as Hyundai Heavy Industries and steel maker POSCO.
Shares of brokerage Mirae Asset Securities, which has a focus on emerging markets, were down 15 percent on market talk of a possible downgrade.
The Korean government’s rescue package modestly pushed up the won against the US dollar, but analysts said the steps would unlikely be strong enough to reverse what has become a fierce downtrend in global equity markets.
“Korea remains particularly vulnerable to the global credit squeeze/deleveraging, and the economy is doomed to decelerate significantly along with the global recession,” Calyon strategists said in a note.
SHORT-TERM HAVEN
Last week investors continued to pull their money out of emerging market equity markets and stash it in short-term money markets. However, Europe equity funds saw a net $2.1 billion in fresh money, the biggest inflow since the third week of April, after some action by European leaders to shore up the financial system, according to EPFR Global.
Money market funds were the biggest magnet for equity capital, absorbing a record $44.4 billion for the week, the Boston-based firm that tracks $10 trillion in assets said in a note.
Oil prices edged up after tumbling around $36 in the last three days in anticipation of a severe pullback in demand. US crude futures for November delivery rose $1 to $72.87 a barrel after plumbing the lowest since July on Friday.
Gold jumped more than 2 percent, as raw materials prices rebounded, following oil’s rise. Gold in the spot market was trading at $794.45 an ounce, up from Friday, when it hit a one-month low of $771.30 as a lack of confidence in the financial system and a US dollar rally ignited heavy liquidation by commodity funds.
The yen fell against the euro and the Australian dollar on Monday as a crisis summit planned for next month helped the market to regain some stability and prompted investors to pick up the recently battered currencies.
But analysts said safety demand for the low-yielding yen was also intact as worries grew about deteriorating financial conditions in emerging markets after Iceland, Ukraine and Pakistan asked for aid to prop up their economies, slowing the yen’s fall.
The US dollar was trading at 101.65 yen, nearly flat from late New York trade on Friday when more bleak US data stoked fears that the credit crisis had knocked the economy into recession and pushed Wall Street shares down.
The euro rose 0.3 percent against the yen to 136.73 yen after dipping as much as 0.3 percent in early Asian trade.
Japanese government bond futures rose from a three-month low hit earlier as signs of improvement in the strained money market spurred investor buying.
December 10-year futures rose 0.55 point to 136.30 after initially sliding to a three-month low of 135.47 on the gains in stocks.
Source: bdnews24
Income from ICT likely to surpass $300m by 2011
October 12, 2008
BSS, Dhaka
Income from IT enabled service (ITES) will go up to US$ 150 million from the present US$ 7 million in Bangladesh by 2011, speakers told a press conference here on Saturday.
“There exists a 300 billion US dollar global market for ITES. If we could tape only .50 percent of the service, the country’s income from the sector will stand at US$ 150 million by 2011 from the present US$ 7 million,” Habibullah N Karim, President of Bangladesh Association of Software and Information Services (BASIS), said. Quoting a survey of the Geneva-based International Trade Centre, he said if the software service included, it is likely to surpass US$ 300 million by the period.
Karim said Bangladesh could be turned into a middle-income country if it gives proper attention to the information and communication technology (ICT) sector.
BASIS arranged the press conference in connection with the BASIS SoftExpo 2009, the biggest ICT event in the country.
The five-day BASIS SoftExpo 2009 will be held at the Bangladesh China Friendship Conference Centre on January 27-31, organisers said at the press conference.
The head of the government is expected to inaugurate the gala IT exposition. The theme of the BASIS SoftExpo 2009 is “Linking People With Technology.”
The main goals of the fair are to help create a global platform showcasing the immense potentials, resources and skills available in Bangladesh, increase the share of ICT in Bangladesh’s GDP, create job opportunities for placement of skilled ICT professionals locally and internationally and facilitate the matchmaking of local and global clients with Bangladesh IT companies, the organizers said.
According to a JAICA report, the BASIS president said, Bangladesh is in the second spot after India in terms of potentialities in the IT sector in the region.
Karim said IT is the proper tool of increasing economic growth rate of the country. National productivity could be enhanced many times employing local software, he opined. He demanded introduction of fibre-optic facilities in all districts and making open the Voice over Internet Protocol (VoIP) in the interest of expansion of ICT sector in the country.
The BASIS president also demanded launching work of the proposed IT parks at Kaliakoir in Gazipur and Mohakhali in Dhaka. Due to lack of IT parks, he said the ICT industry is lagging behind many countries.
Highlighting the main aspects of the exhibition, MA Mubin Khan, Director-in-Charge of BASIS SoftExpo 2009, said more than 200 organizations from about 10 countries are expected to take part in it.
Besides displaying products, he said, seminars, workshops and roundtables on the contemporary issues will be organized at the exhibition. He said the BASIS will take up an “IT Talent Search” programme to hunt talents from different places of the country. Besides, the ‘Best IT Use Award 2008′ will be given and ‘IT Job Fair’ will be arranged on the occasion, he said.
Mubin Khan said Bangladesh earns foreign currencies equivalent to US$ 28 million annually by exporting software and IT service to about 30 countries. Countries like the United States, the United Kingdom, Japan and Denmark import software and ICT service from Bangladesh, he added.
He said there are about 500 software and ITES firms in the country where more than 12,000 IT professionals have been working.
Mubin Khan said BASIS is the second largest graduate employment sector with a strength of 270 members.
Senior Vice President of BASIS Syed Mamnul Quader, Vice- President Shameem Ahsan, General Secretary Nahid Ahmad, Chairman of National Event Committee Rafiqul Islam Rowly and Naila Choudhury, Chairman and CEO TeleConsult Group, the event management company of BASIS SoftExpo 2009, were present at the press conference.
Source: bdnews24
Local designs spruce up RMG
October 6, 2008
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Clothes on display at a design house in Dhaka. More than 50 garment brands have developed in the country thanks to a recent shift in choice. Photo: Syed Zakir Hossain
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Two things are going to refresh Bangladesh’s economic outlook soon — a boom in local brands and a new breed of designs and designers — as the country has already grown into one of the busiest hubs for readymade garment (RMG) outsourcing. This is what experts say.
At least 75 percent of readymade garment is tailored in line with the foreign buyers’ designs, popularly known as “cut-and-paste ones”, since the garment industry is yet to get a flourished design sector, said RMG exporters.
Bangladesh cannot do much good in design although the garment sector is on a strong footing now due to aggressive marketing by local manufacturers and exporters.
Local brands are gaining ground gradually as more than 50 garment brands have already developed in the country due to people’s recent shift in choice towards branded items.
Some garment brands such as Yellow of Beximco Group have overseas operations, while some others like Westecs, another local brand of corporate wears, are poised to go global.
Market operators said the Bangladeshi designs are yet to get global recognition mainly due to lack of proper schooling of human resources as there are no dedicated training institutions with global standards here for such sophisticated and complex subjects like design.
As a result, big manufacturers need to hire designers from India, Pakistan, China and Vietnam, they said.
Moreover, the industry people are not still aware of the potential and demand of local and foreign design markets.
But the situation is changing due to establishment of some training institutions in the country over the last few years, opting for global standards.
Graduates are emerging every year from the local fashion and design institutes and joining the domestic and multi-national companies to develop designs for exportable garment products.
For the demand and potential, the entrepreneurs are also investing to produce required type of hands, and hence besides some private and public textile colleges, now there are some institutes for teaching fashion and design.
A belief that design will become an important part of the garment industry has spurred the development of educational programmes to groom a future generation of local designers.
Already talented young designers from the BGMEA Institute of Fashion and Technology (BIFT) and other fashion institutes are entering the market.
From the BIFT, established in 2000, at least 500 graduates and post-graduates are coming out every year to join fashion and design professions.
Presently, BIFT is offering four-year bachelor degree courses on knitwear manufacturing technology, apparel manufacturing and technology, fashion design and technology, and sweater manufacturing and technology, said Benajir Ahmed, president of the Governing Body of BIFT.
He said the institute is also offering MBA course in apparel merchandising, and one-year diploma and six-month professional certificate courses on various related subjects.
He also said the demand for skilled manpower in fashion and design is increasing every day, as the RMG sector is growing up rapidly.
“Keeping it in mind, BIFT submitted a proposal to the education ministry two months ago to turn the institute into a university,” Ahmed said.
He said Bangladesh will have to produce value added garment items in near future to be more competitive in global markets. As a result, it will require a lot of fashion designers on the domestic market, he added.
Ahmed said BIFT also applied to National University, the affiliating university of BIFT, to increase the institute’s number of seats for bachelor degree course from 400 to 750, for MBA course from 150 to 200, for six-month diploma course from 350 to 500 and for one-year diploma course from 200 to 400.
“I hope the university will give its consent to increasing the number of seats of the BIFT from January next.”
Prof Syed Fakhrul Hasan Murad, chairman of Textile Department of Southeast University, said although a good few public and private universities are offering courses on textile engineering and technology, they do not have courses on fashion and design.
“To my knowledge, some universities are planning to offer courses on fashion and design very soon,” he said.
Talking to The Daily Star, Rasheduzzaman, a former student of a fashion and design institute and now working for a foreign buying house, said the capacity of local fashion designers is yet to be developed, as they are not updated much on global trends.
“The teachers of fashion and design also should keep themselves updated,” he said.
President of Bangladesh Garment Manufacturers and Exporters Association Anwar-Ul-Alam Chowdhury Parvez said the industry is suffering from more than 25 percent shortage of skilled workers in fashion and design.
Bangladesh has a chance to become a good source of skilled workers and designers in garment sector if they are trained properly, he said.
Source: The Daily Star
Economic zones for planned industrialisation stressed
September 29, 2008
Experts at a media briefing on Sunday emphasised that the country needed to go for planned industrialisation instead of the present disorganised one, setting up exclusive economic zones.
The International Finance Corporation’s Bangladesh chapter organised the programme in a Dhaka hotel where Mustafizul Hye Shakir, investment policy analyst of the World Bank’s private sector lending arm, detailed the benefits of economic zones and their success and failure stories.
He defined economic zone as a geographically delimited area with a special regime and a single administration that delivers services to zone tenants on a day-to-day basis.
Senior programme manager of IFC’s Bangladesh Investment Climate Fund Syed Akhter Mahmood, programme manager Martin Maxwell Norman and international expert on economic zones Deborah Porte also spoke on the occasion.
The experts and officials responded to a volley of questions from participant journalists about the necessity of establishing new economic zones, while the government failed to ensure energy supply and other facilities to the existing industries.
Syed Akhter Mahmood said the country could not afford to stop new investment citing gas and power crisis. ‘The government must find out alternative sources of energy and new investments will come in. So, now it is the matter whether we want industrialisation in an organised way or not,’ he added.
The council of advisers approved the Economic Zones Ordinance in principle two months back and the final approval is expected shortly, the meeting was told.
Source: New Age
US economy in crisis: Bush
September 25, 2008
President George W. Bush warned on Wednesday that the United States was in the middle of a serious financial crisis that could push the economy into a long-term recession if the government did not act.
In a televised address aimed at persuading the public to support a $700 billion financial bailout being negotiated with Congress, Bush said his “natural instinct” was to oppose government intervention in the financial sector, but the financial turmoil called for a different approach.
“I believe companies that make bad decisions should be allowed to go out of business,” Bush said. “Under normal circumstances, I would have followed this course. But these are not normal circumstances.”
He cited a market that was not functioning properly, a widespread loss of confidence and major financial sectors at risk of shutting down.
More financial distress could lead more banks to fail, the stock market to drop further, businesses to close, job losses and home values to drop, Bush said.
“And, ultimately, our country could experience a long and painful recession,” Bush said. “Fellow citizens, we must not let this happen.”
Less than two hours before the speech, Bush telephoned Democratic presidential nominee Barack Obama and invited him to the White House on Thursday for a meeting with congressional leaders and Republican nominee John McCain on the financial bailout package.
Obama accepted and McCain had already said he would suspend his campaign and return to Washington to help work on the bailout.
The Bush administration and Congress have been trying to hammer out an agreement on a plan that would allow the government to step in and take illiquid loans from shaky Wall Street firms to address financial turmoil in the markets.
The unprecedented bailout has met skepticism and anger from lawmakers who argue that the administration’s proposal should not just be rubber-stamped. But they have also avoided suggesting they would block the plan for fear of spooking the markets.
Bush said again that urgent action was needed to bolster the markets. His last prime-time national televised address was on September 13, 2007, when he spoke of the “way forward in Iraq.”
Senate Majority Leader Harry Reid, a Nevada Democrat, said Bush had a lot of explaining to do in his speech.
“It is time for him to explain why his administration sat on its hands for months and only now has come to realize the need for immediate and unprecedented government action,” Reid said before Bush’s address.
Source: bdnews24