Daily News Recap
Monday, April 27, 2015
Sliding euro a boon for importers
The sliding euro, while dispiriting for garment exporters, has presented a boon for entrepreneurs
looking to set up new factories or expand their existing ones by bringing in machinery from
Europe.
Since capital machinery in power, textile and other sectors is imported from Europe, a weak euro
will significantly reduce investors' capital expenditures, said Alamgir Morshed, head of financial
markets of Standard Chartered Bangladesh.
In 2014, the country imported more than €2 billion worth of goods from the European Union, of
which over €1.069 billion, or 53 percent, was machinery, according to data from the European
Commission. The import of machinery will be at least 20 percent cheaper now than in April last
year, according to David Hasanat, chairman of Viyellatex Group, a leading garment exporter. And
if the political situation improves, entrepreneurs will surely exploit the option, he said.
http://www.thedailystar.net/business/global-business/sliding-euro-boon-importers-79428
Funds flowing out of bourses
Funds are flowing out of the country's bourses to other attractive investment options, including
term-deposits with banks and government's savings instruments, chief economist of the
Bangladesh Bank (BB) Dr Biru Paksha Paul told a seminar in Dhaka Sunday.
According to speakers, the higher deposit rates influence the investors' psychology and
discourage people from taking investment risks while high borrowing rates work as a deterrent to
investments. They also identified lack of quality education, infrastructure and power and energy
as some major obstacles hindering investment.
http://www.thefinancialexpress-bd.com/2015/04/27/90451
Stock market stakeholders want to do it on their own
Country's stock-market stakeholders urged the government Sunday to amend a newly-introduced
legal provision to allow companies to deduct, on their own, the taxes from their capital gains
earned from bourses. They argued that authorising companies and partnership firms to estimate
their respective realised gains from the share market would make the tax measure operationally
feasible.
Under the new fiscal measure, custodian banks, merchant banks, financial institutions or Trading
Right Entitlement Certificate (TREC)-holder companies are to deduct the gains tax. As per
income-tax provision, the stakeholders have to deduct the tax on final and accumulated capital
gains of the companies until June 30, 2015.
Both the taxmen and stakeholders listed the unavailability of actual information on net profits of
companies from share market as a major problem, said a meeting source. Officials said the tax
1
Capital Market Research Department
Daily News Recap
Monday, April 27, 2015
measure had been slapped as final settlement where a company can enjoy 10 per cent tax rate
on its income from capital gains while the corporate-tax rate is 35 per cent.
http://www.thefinancialexpress-bd.com/2015/04/27/90460
BB must have more control over money market
The government should give more powers to Bangladesh Bank to allow it to properly play its role
in the money market and rein in inflation, the central bank's Chief Economist Biru Paksha Paul
said yesterday. The government's control on the interest rate on savings certificates disturbs the
market and affects the central bank's efforts to bring down lending rates and control inflation,
which are needed to boost investment, he said. “The central bank is supposed to control the
interest rates. If there is someone else playing this role, our game is disturbed.”
http://www.thedailystar.net/business/banking/bb-must-have-more-control-over-money-market79430
BB chief economist for trimming savings bond interest rate
Bangladesh Bank (BB) Chief Economist Biru Paksha Paul at a seminar yesterday opined to
reduce the rate of interest of savings bond to boost up loan flow in private sector, reports BSS.
“The average rate of interest for BB’s loan is 15 per cent, which is hampering the desired
investment, but if the rate of interest is reduced, the investment would be boosted,” said the BB
chief economist while presenting a keynote paper at the seminar.
He also said “The central bank has to be given full regulatory authority to control the rate of
interest for making the monetary policy effective, which would also help the BB to cut the interest
rate”. The BB chief economist hoped the GDP would be 7 per cent and poverty line would come
below 10 per cent after the implementation of the ongoing mega projects in infrastructure and
power sectors.
http://www.theindependentbd.com/index.php?option=com_content&view=article&id=256125:bbchief-economist-for-trimming-savings-bond-interest-rate&catid=107:businessbanking&Itemid=154
BTRC to relax spectrum auction norms
The Bangladesh Telecom Regulatory Commission (BTRC) has agreed to bring changes to its
spectrum auction guidelines to allow even the operator with highest spectrum to take part in the
first round of the upcoming spectrum auction. At a meeting chaired by BTRC Chairman Sunil
Kanti Bose yesterday, the telecom regulator took a decision to this effect. The Commission also
took a policy decision to create scope for new operators to enter the market so as to ensure a fair
2
Capital Market Research Department
Daily News Recap
Monday, April 27, 2015
competition. In view of the upcoming national budget, BTRC wants to conduct the auction before
June. Therefore, the Commission has decided to amend the guidelines for the spectrum auction
on May 27. The date has been rescheduled twice. Now BTRC will forward the recommendation
to amend the auction guidelines to Post and Telecom Department for approval and after getting
the departments nod BTRC will publish the guidelines. On February 19, BTRC for the first time
published guidelines for 1,800 and 2,100 band spectrum auction.
http://www.theindependentbd.com/index.php?option=com_content&view=article&id=256127:btr
c-to-relax-spectrum-auction-norms&catid=110:business-others&Itemid=156
3
Capital Market Research Department
Daily News Recap
Monday, April 27, 2015
LBSL’s research reports are also available on
Bloomberg LANB <GO>
http://lankabangla.duinvest.com
Recommendation Interpretation
Overweight
Stock is expected to give positive return over 20% in one year horizon.
Add
Stock expected to give a return of 0-10%+ in one year horizon
Neutral
Current price of the stock reasonably reflects fundamental value.
Reduce
Stock is expected to fall up to 10% in one year horizon.
Underweight
Stock is expected to fall by more than 10% in one year horizon.
This document (“the Report”) is published by LankaBangla Securities Ltd (“LBSL”) for information only for its clients. All information and
analyses in this Report have been compiled from and analyzed on the basis of LBSL’s own research of publicly available documentation and
information. LBSL has prepared the Report solely for informational purposes and it is consistent with the Rules and Regulations of SEC. The
information provided in the Report is not intended to, and does not encompass all the factors to be considered in a best execution analysis
and related order routing determinations. LBSL does not represent, warrant, or guarantee that the Report is accurate. LBSL disclaims liability
for any direct, indirect, punitive, special, consequential, or incidental damages related to the Report or the use of the Report. The information
and analysis provided in the Report may be impacted by market data system outages or errors, both internal and external, and affected by
frequent movement of market and events. Certain assumptions have been made in preparing the Report, and changes to the assumptions
may have a material impact on results. The Report does not endorse or recommend any particular security or market participant. LBSL, its
analysts, and officers confirm that they have not received and will not receive any direct or indirect compensation in exchange for expressing
any specific recommendation, opinion, or views in its Report. The information and data provided herein is the exclusive property of LBSL and
cannot be redistributed in any form or manner without the prior written consent of LBSL. This disclaimer applies to the Report in it’s entirety,
irrespective of whether the Report is used or viewed in whole or in part.
LBSL Capital Market Research Department
Md. Mahfuzur Rahman
Head of Research
[email protected]
Analyst
Designation
E-mail
Qazi Musaddeq Ahmad, CFA
Nazmul Ehsan Omiya
Nazib Haider Chowdhury
Salma Yeasmin Xinat
Pritam Saha
Md. Rezwanur Rahman
Tanay Kumar Roy
Deputy Head of Research
Senior Research Associate
Senior Research Associate
Research Associate
Research Associate
Research Associate
Trainee Research Associate
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
Institutional & Foreign Trade Department
Rehan Muhammad
Head of Institutional & Foreign Trade Department
[email protected]/rmuhammad1@bloomberg .net
LankaBangla Securities Limited
Capital Market Research Department
Corporate Office
A.A. Bhaban (Level-5)
23 Motijheel C/A
Dhaka-1000, Bangladesh
Phone: +880-2-9513794 (Ext-122)
Fax: +880-2-9563902
Website: www.lbsbd.com
4
Capital Market Research Department