Global Business & Economy . . .Malaysian foreign investment plummets in 2009 Foreign investment in Malaysia has plummeted this year, trade minister Mustapa Mohamed said after the government announced liberalisation measures aimed at luring investors. 'Foreign direct investment for 2008 was 46 billion ringgit ($ 13b) and for January to May this year we have only seen 4.2 billion ringgit,' Mustapa told reporters. Wahad Hamid, deputy head of the Malaysian Industrial Development Authority, said the investment climate was extremely tough despite a strong performance by Malaysia in the three previous years. 'Last year, total investment was about 62 billion ringgit but this year we are only targeting half of that, about 30 billion ringgit,' Mustapa said. Analysts forecast a 5.0% economic contraction this year. (The New Age, July 3, 2009)

Ericsson buys Nortel units for $1.13bSwedish wireless equipment maker LM Ericsson said that it had penned a deal to buy a majority of Nortel Networks' North American wireless business for $ 1.13 billion. The Stockholm-based group said the purchase is on a cash and debt-free basis and covers the older CDMA and newer LTE wireless businesses of Nortel's Carrier Networks unit. (The Daily Star, July 26, 2009)

British Airways to raise 600m poundsBritish Airways (BA) said that it was raising about £ 600 million to improve its cash pile. BA said it would earn £ 350 million from the sale of bonds to agreed buyers who eventually would be able to convert their purchased debt into shares. BA's share price closed up 2.95 percent to 136 pence on in London, where the benchmark FTSE 100 index gained 0.62%. Additionally, the trustees of the group's pension fund have agreed to release some bank guarantees back to the airline, allowing it to draw up to $ 540 million in cash. (The Daily Star, July 20, 2009)

Bangladesh Economy:

Banking Sector◗ Deutsche Bank reported a sizeable increase in net profit for the

second quarter, to € 1.1 billion. However, investors took fright at the German bank's provisions for bad loans, which swelled to € 1 billion.

◗ Bank of America reported a $ 3.2 billion profit, based mostly on one-time gains, such as selling part of its stake in China Construction Bank.

◗ Citigroup made a profit of $ 4.3 billion, but it was saved from spilling more red ink only by the spin-off of its Smith Barney unit. Investors responded negatively to the news from both.

◗ Wells Fargo posted hefty earnings, but also revealed a sharp rise in bad loans.

��� (Economist.Com, July, 2009)

Migrant outflow swings down in recessionThe labor migration outflow slowed nearly 46% in the first six months of this year, dimming hopes for the growth of remittance. In June, manpower exports went down 60%, compared to the same period of last year, according to a provisional report of the Bureau of Manpower, Employment and Training (BMET). The slowdown synchronizes with slowing exports, which together with remittance makes over $ 24 billion or more than 29% of the country's $ 81 billion GDP. Exports declined 2.30% in April of the current fiscal year (FY), compared to the same period a year ago. In the January-June period, around 250,900 people went overseas for job purposes while the number was 464,000 in the same period of last year. In June, 59,434 workers went abroad against 98,002 in June last year (The Daily Star, July 2, 2009)

A Newsletter of Research & Development Division, Prime Bank Ltd.

Vol. 1, Issue � 4, July 2009 2

Ministry / Division Allocation amount(In Crore Tk)

Food and disaster management 12,946

Defence ministry 8,199

Local Government Division 7,934

Education ministry 7,415

Health ministry 7,000

Primary and mass education ministry 6,617

Home ministry 5,879

Power division 3,578

Budget:◗ Tk 1,89,960 crore of gross expenditure, including revenue and

development◗ Tk 1,13,819 crore of net expenditure� (The daily Star, July 1, 2009)

P*-ProvisionalR*- RevisedSource: Bangladesh Bank

ItemAmount/Rate

(Reference date)Amount/Rate

(Reference date)

Foreign ExchangeReserve (In million

US$)

Taka- DollarExchange Rate

(Average)

Call Money Rate(Weighted Average

Rate)

Wage Earner’sRemittance

(In million US$)

Current AccountBalance

(In million US$)

Rate of Inflation(Point to Point Basis)

LC Settlement (Inmillion US$)

Import (In millionUS$)

Export (In millionUS$)

Reserve Money(Tk. in crore)

LC Opening (Inmillion US$)

Share Price Index(DSE)

Share Price Index(CSE)

7,225.08(23 June, 2009)

69.06(23 June, 2009)

1.34(23 June, 2009)

2,871.19(23 June, 2009)

9,942.36(23 June, 2009)

895.3( May ,2009 R*)

1,777.3( April, 2009 P*)

1,176.29( April, 2009 P*)

1,322.0( Jul-Aprl.2008-09 P*)

61,882.5( April, '2009 P*)

19,938.55(July-May 2008-09)

19,912.24(July-May 2008-09)

5.36( April, 2009)

7,585.69(21 July, 2009)

69.06(21 July, 2009)

1.19(14 July, 2009)

2,828.07(21 July, 2009)

9,906.9(21 July, 2009)

919.1( June ,2009 R*)

1,738( May ,2009 R*)

1,322.83( May ,2009 R*)

1,322.0( Jul-Aprl.2008-09 P*)

60,942.4( May ,2009 R*)

21,802.74(FY 2008-09)

21,444.35(FY 2008-09)

5.39( May, 2009)

Selected Macro Economic Indicators:

Mobile set imports 25%+5% regulatory duty 12%

Newsprint imports 5% 3%

Corporate tax for financial institutions 45% 42.5%

ITEMS PROPOSED DUTYAPPROVED DUTY

FOR 2009-10

Bangladesh stands tall in Asia's export Bangladesh stood tall with 11.88% export growth until May 2009 amid tumbling shipments from major Asian countries because of the lingering global financial slump. Goods worth $ 14.14 billion were shipped out of the country between July 2008 and May 2009, compared to $ 12.63 billion during the same period of last year, according to official data. China, India, Pakistan, Malaysia, Vietnam and Thailand were struggling to stop the free fall in export shipments as the global recession cut demand for goods in both sides of the Atlantic. (The New Age, July 20, 2009)

Revenue generation growth drops to single digit Overall revenue generation growth for the first time in two years dropped to single digit in the last fiscal forcing the national revenue board to face an uphill task in achieving its revised target of Tk 53,000 crore. The NBR is facing more than Tk 1000 crore revenue shortfall in the revised target due to further drop in earning from the Customs and Value Added Tax departments in the last month of the FY, said insiders. The overall tax collection growth contracted to 9.3% during the month of June from 12.21% until May rendering the outgoing fiscal as most inauspicious one for the revenue board, they said. (The New Age, July 9, 2009)

Bangladesh Economy . . .

Agriculture:

Trade deficit with India during 2001-08 over $ 12.27b: FaruqBangladesh's trade deficit with India from 2001-02 to 2007-08 FYs was over USD 12.278 billion."The government has undertaken different steps to reduce the trade deficit with India," he said. The measures include initiatives to export more duty-free commodities to India under the South Asia Free Trade Arrangement, formation of joint-secretary level Joint Working Group on Trade for removal of non-tariff barrier, and steps for development of physical infrastructure of land customs stations and road infrastructure to expand land trade between the two countries. (The Financial Express, July 7, 2009)

Aila-hit farmers set to miss Aman seasonCyclone Aila-hit farmers after suffering huge loss in Aus production may miss the Aman season because of saline water logging in large coastal areas as the damaged embankments are yet to be repaired. Officials and experts fear the Water Development Board (WDB) would not be able to fully repair the embankments before the rainy season as it is difficult to collect necessary soil to repair huge breaches. According to official figures, the cyclone on May 25 damaged 1,742.53 kilometres embankments, crops on about 3.23 lakh acres of land, 157 bridges and culverts and about 1.5 lakh livestock. (The Daily Star, July 1, 2009)

Boro output crosses target

BB targets Tk 115.12b agri credit disbursementThe central bank of Bangladesh announced an agriculture credit policy with a disbursement target of Tk 115.12 billion (11,512 crore) for this fiscal, marking 22.74% growth over that of the previous fiscal. The loans will be given to different agro-based sub-sectors like crops, irrigation equipment, livestock, marketing of agricultural products, fisheries and poverty alleviation. (The Financial Express, July 15, 2009)

The boro rice output has reached about 1.9 crore tonnes this year, driven by a rise in acreage, according to a preliminary estimate by the Department of Agricultural Extension (DAE). “Boro rice production has exceeded our target of 1.8 crore tonnes. DAE's output estimate comes at a time when tens of thousands of farmers are receiving low prices for their produce stemming from an increased supply of rice to the market. Analysts fear the low prices of rice might dampen farmers' spirits and affect production and

acreage next year. Last year, DAE estimated boro output at 1.8 crore tonnes, although the data differed with the estimates of Bangladesh Bureau of Statistics (BBS), which recorded 1.77 crore tonnes of boro output last year. (The Daily Star, July 2, 2009)

Fertiliser distribution rules in the offingThe government is changing the rules to make way for the appointment of an unspecified number of fertiliser dealers instead of three in each union so that fertiliser could easily reach farmers. Agriculture Minister Motia Chowdhury told the news agency that the new guidelines would minimise harassment of farmers in getting fertiliser. Previously, there would be one dealer and three sales representatives in each union but the new regulation keeps a number of retail salesmen along with a dealer in a union. The retail salesmen can sell fertiliser on procurement from 'upazila fertiliser and seeds monitoring committee' led by upazila nirbahi officer after registration. But one retail salesman cannot purchase or sell fertiliser from another upazila. The minister said the government wanted to maintain the open market policy and at the same time monitor the market so that farmers did not face any crisis. (The Financial Express, July 16, 2009)

BB to give credit info in 5 workdaysBangladesh Bank announced its Credit Information Bureau (CIB) is ready to give default loan information to banks and financial institutions in five workdays. In line with the central bank service standard, the quick service starts (30th June). “We've up to date information from a huge backlog (30th June)” Executive Director AHM Kai-Khasru told. (The Daily Star, July 1, 2009)

Banks must report stock portfolios every monthBB strengthens monitoring amid stock market scandal

The central bank has asked all banks to submit monthly reports on their stock portfolios, following unearthing of irregularities in share business by a Dhaka Stock Exchange investigation. Banks from now on must submit detailed information about their stock portfolios by categories of purchase, mortgage, and deposit, sources said. The monthly reports must be submitted within seven days of the next month to the Department of Off-sight Supervision of Bangladesh Bank on a regular basis. For the month of June 2009, the report must be submitted by the 15th of this month. Recently, DSE in an investigation found that two privately run commercial banks -- AB and IFIC -- made hefty profits from investments in Z category shares of a company with weak fundamentals. The two banks bought about 95 lakh shares of Bextex, which were of the Z category prior to declaring 10 percent bonus share dividend by the company, just following the buying binge of the two banks. The banks also sold half of their share holdings just after the declaration of the dividend by Bextex, pushing the share price up, and the company straight to the A category. (The Daily Star, July 13, 2009)

A Newsletter of Research & Development Division, Prime Bank Ltd.

Vol. 1, Issue � 4, July 2009 3

Finance & Banking:

84.53

26

4.5

8 State-owned Commercial Bank 29 Private Commercial Bank

10 Foreign Commercial Bank

Agri Credit Disbursement (Tk. In billion)

Bangladesh trade deficit with India

$1,274.18$1,513.23

$1,881.59$1,626.04

$1,979.59

$3,034.92

$968.71

$0.00

$500.00

$1,000.00

$1,500.00

$2,000.00

$2,500.00

$3,000.00

$3,500.00

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

In m

illio

n

Remittance growth beats doom sayers Forex reserve stands at $ 7.42bRemittance recorded a 22.32% growth last FY compared to FY 2007-08 despite downbeat projections by several donor agencies amid the ongoing global recession. However remittance figures stood at $ 10 billion in FY 2008-09, taking the foreign currency reserve to $ 7.42 billion at 12th July. Usually remittance growth in Bangladesh hovers around 12-16% in a FY, although the growth hit a record high at 32% in FY 2007-08. In FY 2008-09 remittance inflow was $ 9,681.78 million, while it was $ 7,914.78 million in FY 2007-08. (The Daily Star, July 6, 2009)

Remittance inflow

2,5013,062 3,372

3,848

4,802

5,998

7,915

9,682

0100020003000400050006000700080009000

10000

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

In m

illio

n d

olla

r

Finance & Banking . . .BB governor stresses credit card use on internet soonThe central bank governor called upon the ICT stakeholders to come forward with specific suggestions that can help introduce soon the use of credit card on the internet. Bangladesh Bank (BB) Governor Atiur Rahman also urged the local software makers to tie up with foreign companies to supply banking solutions to the local market. "Initially you can team up with foreign companies to develop competence." Rahman assured the stakeholders of easing the process for getting money from ICT Equity Entrepreneurship Fund (EEF), and asked them to become more aware of fund misuse. The government in the current fiscal year has allocated Tk 200 crore for ICT EEF, which is Tk 100 crore more than that of the previous year. However, in terms of utilization, the fund remained almost idle last fiscal year as the entrepreneurs took only Tk 60 lakh from the fund. (The Daily Star, July 7, 2009)

Excess liquidity hits banksExcess liquidity in banks reached as high as Tk 27,716 crore in April, pointing to sluggish investment. Bangladesh Bank June 2009 Update shows that banks had Tk 12,988 crore in excess liquidity in June 2008. The March figure was Tk 24,000 crore, indicating an every month rise in such excess liquidity. The private sector credit dropped to 16.97% in April from 22.89% in the same month a year earlier. Such a fall went below the target of cutting the credit growth down to 18%, as set by the central bank. The call money market shows that the excess bank liquidity has also caused a drop in interest rates. The rates were 1.97% in April, 3.28% in May and 1.79% in June, which were 15.48%, 14.11% and 9.90% in the corresponding period last year. The data of a 30.21% fall in the opening of letters of credit for the imports of capital machinery and 11.12% in the case of industrial raw materials suggest a bleak production scenario, and also a frustrating future. (The Daily Star, July 13, 2009)

BB eases foreign exchange rules to boost tourism industryThe central bank has made foreign exchange transaction easier for the country's tour operators to encourage joint travel packages with overseas agencies in an effort to boost the sagging tourism industry, officials said. A new guideline has been set allowing local operators to remit money to their overseas partners without any hassle and lifting most of the curbs on foreign exchange for selling tour packages to airlines and agencies. The move follows intense lobbying by the Tour Operators Association of Bangladesh (TOAB), which has singled out the central bank's foreign exchange regulations as the key stumbling block to the growth of tourism industry. (The Financial Express, July 12, 2009)

Pubali Bank & Prime Bank sign deal with Trans-Fast RemittancePubali Bank and Prime Bank have signed two separate money transfer agreements with Trans-Fast Remittance LLC, USA recently. Under the deal, Bangladeshi expatriates in the USA and other parts of the world would be able to remit their hard-earned foreign currency to their relatives and other stakeholders living in Bangladesh within a short time through Pubali Bank & Prime Bank. This will help increase the volume of remittance to Bangladesh through legal/banking channel on account of Bangladeshi expatriates living abroad. (The Financial Express, July 14, 2009)

BB raises single borrowers' limit for EDFCentral Bank has raised the single borrowers' limit for export development fund (EDF) to USD 2.0 million from USD 1.5 million to meet the growing demand of the country's exporters. "We've increased the limit of EDF aiming to facilitate the country's exports," a senior official of the Bangladesh Bank (BB) told, adding that the new measure came into effect from July 1 last. Under the new directive, any individual exporter will be allowed to borrow $ 2.0 million instead of $ 1.5 million to import materials for producing export items, according to the BB circular. On November 1, 2007, Central Bank raised allocation of EDF to $ 150 million from $ 100 million earlier. (The Financial Express, July 7, 2009)

Bangladesh Automated Clearing HouseThe Bangladesh Bank (BB) will introduce Bangladesh Automated Clearing House (BACH) from August 03, this year aiming to facilitate business activities through modernizing the payment and

settlement system. Under the new system, payments will be settled using automated cheque-clearing system and electronic fund transfer among 1050 bank branches in Dhaka, initially. The BB also plans to extend such services to divisional and district levels in phases among 7000 bank branches by 2010, for smooth business transactions in the country. (The Financial Express, July 7, 2009)

Govt's bank borrowing up: ADP falls far short of implementation targetThe government's borrowing from the banking system in the last fiscal year was 3% higher than its target although the implementation of annual development programme (ADP) is lagging far behind the target. The revised ADP size was Tk 23,000 crore last fiscal year. In the revised budget for FY 2008-09 the government's borrowing target was Tk 10,698 crore. But finally the government borrowed Tk 10,964 crore. In the current FY 2009-10 a bigger borrowing target has been set at Tk 16,755 crore, which is about 56% higher than previous FY's target. (The Daily Star, July 17, 2009)

SEC takes action against 28 defaulter companies:Share trading suspended for irregular AGM, non-payment of dividends

Share trading of 28 laggard companies has been suspended for an indefinite period by the stock market regulator. The Securities and Exchange Commission (SEC) through a letter ordered Dhaka and Chittagong stock exchanges to suspend share trading of 28 Z category companies until further order, officials said. Companies that do not offer dividends, or hold Annual General Meetings (AGM) regularly, or are out of operations, fall under the Z category. "Twenty eight companies are not holding AGMs, and have not been declaring dividends for a long time, many of them are not even in operation, but their share prices are increasing irrationally," Anwarul Kabir Bhuiyan, executive director of SEC, told journalists. (The Daily Star, July 2, 2009)

A Newsletter of Research & Development Division, Prime Bank Ltd.

Vol. 1, Issue � 4, July 2009 4

2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

Total Bank Credit To GovernmentBorrowings Exceed Target

DSE turnover soars to historic high Bank shares drive marketSingle-day turnover on the premier bourse crossed Tk 1,000 crore mark in July 2, carving out a new milestone in the history of Bangladesh's capital market. Bank shares contributed the highest quarter of the total turnover. The banks also recovered all of its losses year-to-date for the first time this year, Equity Partners Limited (EPL), an investment firm, said in its daily market analysis. Banks had a "fantastic day" with most of them gaining more than 5%. Biggest movers were Mercantile Bank with a 12.6% rise, Jamuna Bank with 10.3% and ICB Islamic Bank with 10.3% gains.Turnover reached the highest-ever Tk 1,149.71 crore on Dhaka Stock Exchange (DSE), surpassing the previous highest of Tk 942.19 crore on June 30. The benchmark DSE General Index (DGEN) jumped 59.44 points, or 1.97%, to 3,069.7. The DSE All Share Price Index also shot up 48.63 points, or 1.92%, to 2,568.78. (The Daily Star, July 3, 2009)

SEC sets lock-in to discipline marketThe stock market regulator has introduced a lock-in period barring sales of new convertible shares or shares against warrants issued by a listed company. From now, there will be a three-year lock-in for directors or those who hold 5% or more shares. It means shareholders and investment companies will not be able to sell the shares they possess in a listed company within three years from the issuance of securities. "The lock-in shall also be applicable in case of issuance of equity security against loan or debt security having no predetermined conversion feature if such equity security is not issued at a price equal to last six months' weighted average market price at the stock exchange(s)," the SEC said. (The Daily star, July 15, 2009)

2,6693,683

6,041

4,415

10,959 10,964

Tk.

in C

rore

0

2000

4000

6000

8000

10000

12000

Finance & Banking . . .

Telecommunication:GP breaks thru' IPO hurdle

Four IPOs hit stock market in August'09The four companies offering IPOs next months are: ◗ Marico Bangladesh Ltd ◗ ICB AMCL 2nd Mutual Fund ◗ Islami Insurance Bangladesh Ltd ◗ Dacca Dyeing and Manufacturing Company Ltd. ��� (New Age. July 23, 2009)

IFC Invests Bangladesh's first private equity fund tosupport private sector growth

IFC, a member of the World Bank Group, will invest $10 million in Frontier PE, the first private equity fund dedicated to Bangladesh, said a press release. The fund will invest growth capital in private companies to help successful Bangladeshi businesses expand and develop key industry sectors. Frontier PE will actively work with its investee companies to uphold social, environmental and corporate governance guidelines established by IFC. IFC, a member of the World Bank Group creates opportunity for people to escape poverty and improve their lives. IFC fosters sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. IFC new investments totaled $ 16.2 billion in FY 2008, a 34% increase over the previous year. For more information, visit www.ifc.org (The Financial Express, July 9, 2009)

Grameenphone, the leading mobile phone operator of the country, received a go ahead from the stock market regulator to raise Tk 486.08 crore through an initial public offering (IPO), the largest of its kind in the history of Bangladesh capital market. The value of the approved IPO is Tk 37 crore more than the company's proposed plan for Tk 449 crore. Each share will be Tk 10 in face value, on top of which a premium of Tk 60 will be added, Anwarul Kabir Bhuiyan, executive director of Securities and Exchange Commission (SEC). (The Daily Star, July 3, 2009)

AKTEL's owning company gets new nameTM International (Bangladesh) Ltd, the company that owns the telecom brand AKTEL, has been renamed as Axiata (Bangladesh) Ltd, says a press release. Axiata (Bangladesh) Ltd is a joint venture between Axiata Group Berhad of Malaysia, one of the largest telecommunication companies in South East Asia, and NTT-DoCoMo of Japan. However, the company said that the brand AKTEL would remain the same. Axiata's other mobile subsidiaries and associates operate under different banners, such as 'Celcom' in Malaysia, 'XL' in Indonesia and 'Dialog' in Sri Lanka. (The Daily Star, July 6, 2009)

Slump in cell phone businessThe cell phone subscriber growth rate of all the service providers came down to mere 4.36% to reach 46.69 million in the first six months of the year, the lowest since 2003. The total active subscribers of GP numbers 21.16 million in June 2009. The total growth rate of last six months is around 1.05%. State-owned Teletalk Bangladesh Ltd (Teletalk) has achieved 30.35% growth and reached the highest number of active subscribers of 1.10 million in the last six months. Warid Telecom International L.L.C (Warid) has enlarged its active subscribers to around 15.18% to reach 2.58 million. The growth rate of Citycell was 7.10% between January-June periods to reach 1.96 million. On the other hand the growth rate of Banglalink and Aktel was 6.05 and 4.49% respectively. The total number of active subscribers of Banglalink is 11.04 million and Aktel 8.85 million, according to the BTRC statistics. (The Financial Express, July 18, 2009)

GP logs 10pc revenue growthGrameenphone's revenue increased by 10% in the second quarter of 2009 to Tk 1,628 crore, compared to the same period a year ago. In a statement, the company said the revenue increased due to a higher number of subscribers, higher average price and increased interconnectivity revenues after linking with international gateway (IGW). Year on year, the EBITDA margin increased to 59.1% at the end of June 2009, which was 27.5% in June 2008. But GP's operating profit edged down 1.7% in the second quarter to June 2009, compared to the first three months of the year. (The Daily Star, July 24, 2009)

BTRC reduces internet bandwidth price by 33pcBangladesh Telecommunications Regulatory Commission (BTRC) has reduced the price of internet bandwidth by about 33%, reports BSS. The price of per MBPS bandwidth has been slashed to Tk 18,000 from Tk 27,000. The BTRC has taken the decision in consultation with all public and private operators in line with the government's directive to spread telecommunication and internet facilities up to the grassroots level, the press release added. (The Financial Express, July 16, 2009)

A Newsletter of Research & Development Division, Prime Bank Ltd.

Vol. 1, Issue � 4, July 2009 5

Customer Based Telecom Operators(Subscribers in million)

GP AKTEL B.LINK CITYCELL TELETALK WARID

0

5

10

15

20

25

OTC to trade junk shares on DSEDhaka Stock Exchange in a bid to facilitate junk share trade will set up an Over The Counter (OTC) market in the next two months. Under the OTC system, a separate trading floor will be opened where interested buyers and sellers of shares of non-performing and under-performing companies will announce prices and numbers of shares to be traded. (The Daily Star, July 13, 2009)

Laptop entrepreneurs to get land free of costPosts and Telecommunications Minister Rajiuddin Ahmed Raju has said the entrepreneurs intending to set up laptop plants in Bangladesh will get government lands for free. “We are ready to give land free of cost to such entrepreneurs. These plants will help make portable computer available at affordable price,” he told a function marking the launch of business of BJ International Co (Pvt) Ltd in Dhaka on Wednesday. BJ International is a Japan-Bangladesh joint venture company. (The Daily Star, July 3, 2009)

Augere launches wireless broadbandAugere Wireless Broadband Bangladesh Ltd launches its operation on 21 July. Augere is the parent company of Augere Wireless Broadband Bangladesh Ltd which successfully won a WiMAX licence in BTRC's auction held in October 2008. Augere has already invested over Tk 210 million in Bangladesh to provide comprehensive WiMAX coverage throughout the major cities in Bangladesh. (The New Age, July 21, 2009)

Coal import from India gets go-aheadThe government has given go-ahead to coal import from Indian state of Meghalaya through land custom stations of Sylhet-Mymensingh region for the next one year, said local business leaders. A decision was taken to allow import of the item with effect from July 1 at a meeting held at the commerce ministry. (The Daily Star, July 10, 2009)

Information Technology:

Energy:

GRAMEENPHONE’S LISTING PLAN

Approved IPO:IPO size: Tk 486.08 croreNumber of shares: 6.94 croreFace value: Tk 10 (per share)Premium: Tk 60

Revised pre-IPOPre-IPO size: Tk 486.07 croreNumber of shares: 6.57 croreFace value: Tk 10 (per share)Premium: Tk 64

Total size of thepackage: Tk 972.15 crore

Grameenphone’s paid-up capital: Tk 1,250.20crore. NAV: Tk 2.27 per share based on Tk 1share. Market lot will be fixed later

grameenphone

Jan-09 Feb-09 Mar-09 Apr-09 May-09 June-09

Energy . . .

Pharmaceuticals:

Readymade Garments:

Easy loan proposed for self-financed renewable energy projectsBangladesh Solar Energy Society placed a 14-point proposal including easy term loan for self-financed renewable energy projects before the government for the expansion of the sector amid increasing power crisis. Secretary of the society Prof Saiful Haque placed the proposals at a press conference at Renewable Energy Research Centre at Dhaka University. The society leaders welcomed the government's decision of withdrawing all types of tax and VAT on renewable energies this FY and the Bangladesh Bank for declaring a revolving fund of Tk 200 crore with 5% interest on renewable energy projects. (The Daily Star, July 1, 2009)

$ 130m WB loan agreement on solar energy, CFLs soonThe World Bank (WB) has agreed to dispense USD 130 million in loans to Bangladesh to support the latter's aggressive push for the clean energy development and energy efficiency, officials say. The officials said the bulk of the funds will be used for expanding the solar home systems by additional 0.3 million and distributing of 10 million energy-saving compact fluorescent lamps (CFLs) in major cities. A WB official said the bank's board is expected to approve the loan proposal in September and credit agreement could be signed in October. (The Financial Express, July 12, 2009)

Aussie co to invest $ 200m in power plantAn Australian coal mining group will invest around USD 200 million in a coal-fired power plant as it will seek to help Bangladesh cut its absolute reliance on fast-depleting natural gas, the company has said. The Melbourne-based APC Technology, an affiliate of APC Group, has said that it is now looking for a potential Bangladeshi suitor to set up the 250-megawatt power plant in Chittagong to be run on imported coal. The country's first power plant on imported coal will be built on Build, Own and Operate (BOO) basis and the foreign company will enter a power sale contract for minimum 20 years, according to the company proposal."The company plans to start electricity generation by 2012," a Power Division official said. (The Financial Express, July 9, 2009)

Mega tax incentive offered to lure investment in power sector

Shipping/ Shipbreaking/ Shipbuilding:

Turkey-Bangla chamber keen to re-open Rajshahi Textile MillsTurkey-Bangladesh Chamber of Commerce and Industry (TBCCI) showed interest in reopening the Rajshahi Textile Mills, which remained non-functional for the last couple of years. The region has enormous prospect of establishing industries and it only needs entrepreneurs to make the sector flourish, they held. There is a large demand of garments and different other fancy products especially handicrafts and silk items in the Turkish markets and the region can earn a huge amount of foreign currency through exporting the items, they mentioned. (The Financial Express, July 10, 2009)

Knitwear export to Japan can fetch billion dollarThe country can fetch USD 1 billion by exporting knitwear to Japan within next five years, if proper steps are taken, reports BSS. Fazlul Haque said regular contacts with the Japanese importers, participation in trade fairs, diversification of products and reforms in rules of origin to avail duty-free facilities are essentially needed to achieve the goal. Japan, the fourth largest garment importer in the world, imports garments worth USD 23 billion annually, of which USD 11 billion is knitwear. (The Financial Express, July 26, 2009)

Government opens up scrap ship importsThe government has again made the imports of scrap ships open for all, aiming to keep prices of mild steel (MS) rod stable in the local market. A rise in the rod prices is feared, as the government will go for massive development work under several projects, which would warrant a high demand for the construction material. Commerce Secretary Feroz Ahmed said the government decided to open up the import of scrap ship for all when rod prices soared up to Tk 80,000 to Tk 82,000 a tonne last year. (The Daily Star, July 10, 2009)

Shipbuilding to be a priority sector in new export policyThe shipbuilding industry is likely to get a place on the list of priority sectors of the new export policy to be announced soon, according to a Commerce Ministry official. The other sectors to be on the list are agro and agro-processing products, light engineering, footwear and leather, pharmaceuticals, software and ICT products and home textiles.Bangladesh has become a popular destination to build small sea-going ships as South Korea, China, Vietnam and other countries pursue for larger container ships. Foreign buyers are now coming to the country as ship building in East Asian countries has become more costly due to steep wage increases. "About lending for export, commercial banks will provide loans as per instruction from the Bangladesh Bank and it will also encourage the scheduled banks to lend to the listed sectors at lower rate and may fix a maximum interest rate ceiling in this regard," the Commerce Ministry official added.(The Financial Express, July 13, 2009)

Shipping sector earns Tk 3,298cr in 2 yrsTk 3,298 crore 5 lakh 68 thousand was earned in the shipping sector from both the internal sources and government grants during the last two FYs. Besides, the works of establishing a container port at Pangaon near the capital city has already begun under the joint initiative of BIWTA and Chittagong Port Authority and there was a huge possibility of earning revenues through handling containers when the construction of this port is completed. (The New Age, July 9, 2009)

The government has offered 15 years of tax waiver on income of private power generation companies, which will be effective from the first day of their commercial production. The move has been taken to lure investment in the cash-starved sector and ease power supply problem in the country. The National Board of Revenue (NBR) has offered the facilities for the private companies that will start power production on commercial basis by June 30, 2012. The board has already issued an order to this effect. Meanwhile, the government has replaced tax holiday facility with 'reduced tax measure' in the current year. "Private power generation companies that will start power production within the stipulated timeframe of 2012 will be able to enjoy the tax holiday facilities, effective from FY 2009-10," one senior tax official said. (The Financial Express, July 19, 2009)

Nasir Group plans to build Pharma, fertilizer plantsThe diversified Nasir Group has decided to set up three new different types of industries to expand its business activities to a wide variety of areas. The group, which is one of the largest family-owned business conglomerates in the country, will set up a pharmaceutical plant, a BOPP (plastic material) making unit and a fertiliser factory soon to gear up its businesses. Pharmaceutical is an emerging and prospective industry in Bangladesh. Currently, there are around 250 pharmaceutical companies that meet almost all the domestic demands. The top 10 companies' market share is nearly 70% of the Tk 5,000 crore in local market. (The Daily Star, July 5, 2009)

With the signs of economic recovery in the western world, foreign buyers now lean towards Bangladesh's readymade (RMG) products, placing orders at an enhanced rate. Major companies say they are now busy with making sweaters, as buyers are increasingly placing orders for the item in the upcoming winter season. The

country is in an advantageous position with cheap and quality apparels because its competitors like China, Pakistan and India are losing out their market share for their higher cost of production, said Nazrul Islam Swapan, managing director of Nassa Group, an apparel manufacturing giant. (The Daily Star, July 12, 2009)

More apparel buyers look to Bangladesh

A Newsletter of Research & Development Division, Prime Bank Ltd.

Vol. 1, Issue � 4, July 2009 6

DisclaimerThis newsletter has been prepared by the Research and Development (R&D) Division of Prime Bank Limited (“PBL”) for the benefit and use of the reader. The newsletter is proprietary to PBL and readers are allowed to disseminate it in unabridged and original form and reference should be made while quoting the newsletter.In preparing this newsletter, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was provided to us by or on behalf of the source of information cited in the newsletter. We do not accept any obligation arising out of any decision made from the contents of this newsletter.