Stock market starts on positive note

Dhaka stocks soared on the first trading day in 2022 as investors went for buying shares heavily with expectation of better trend on the market in the new year.

DSEX, the key index of the Dhaka Stock Exchange, gained 1.42 per cent, or 96.48 points, to close at 6,853.13 points on Sunday after gaining 25.5 points in the previous session.

The market began  on high note and continued with the momentum until the end of the session as a section of investors went for heavy buying on the first trading day of 2022, market operators said. Investors expected that the market might perform better from the beginning of the new year, they said.Besides, the financial institutions which sold off shares ahead of December closing would go for investments again, they said.

The media reported that most of the banks witnessed growth in operating profits in 2021 compared with that in the previous year that attracted some investors to the bank shares, the market operators said.

Share prices of many companies have dropped significantly in the recent downward trend on the market that instigated investors for bargain hunting, they said. Among the large capitalised companies, share prices of BEXIMCO, Beximco Pharmaceuticals, GPH Ispat, LafargeHolcim Bangladesh and LankaBangla Finance soared on the day. However, the investors’ confidence in the market is yet to be restored that has resulted in instability on the market, the market operators said.

Turnover on the DSE declined to Tk 894.17 crore on Sunday from Tk 921.81 crore in the previous session. The market has been in the doldrums for the last five months due to a host of reasons, including a tussle between the Bangladesh Bank and the Bangladesh Securities and Exchange Commission over stock market-related issues, share price manipulation by a section of unscrupulous investors and continued share sales by the foreign investors, they said.

Bangladesh Shipping Corporation, Fortune Shoes, IFIC Bank, GSP Finance, Sonali Paper, One Bank, Genex Infosys, Delta Life Insurance and Power Grid Company were the other turnover leaders on the day.

Bad loans exist in almost all countries, says Salman

Salman Fazlur Rahman, private industry and investment adviser to the prime minister, on Tuesday said that defaulted loans existed in almost all countries in the world. He while replying to a question on how the local banking sector could be freed from the bad loan culture also said that provisioning of loans and expanding banks’ capital base were necessary to check defaulted loans.
 

Salman who was speaking at the ‘Meet the Press’ programme of the Dhaka Reporters’ Unity in the city said that state-owned banks were mainly facing problems of bad loans. Defaulted loans in private banks have not increased, he said.

Salman also gave answers to questions on the country’s share market, foreign direct investment, tax, falling price of fuel oils in the international market, foreign workers, digital security act and Covid vaccine during an hour-long parley at the DRU auditorium. He identified a lack of institutional investors and the absence of secondary bond market as major ‘defects’ in the stock market and its inconsistency. The government is working to remove the defects, he said. He said that the county’s tax-GDP ratio had not increased despite a many-fold economic growth over the years. The National Board of Revenue has not been able to expand the tax net, he said.

Salman, also the vice-chairman of the BEXIMCO Group, said that 35 out of 65 services had already been facilitated to local and foreign investors under the Bangladesh Investment Development Authority’s one-stop service. He also said that the rest of other services mainly link to the NBR were yet to be bright under the BIDA’s one-stop service. In the absence of the services, local and foreign investors are raising allegations, he said. He, however, said that the BIDA’s one-stop service had already become popular.

Salman disagreed with data of outbound remittance at the tune of $3 billion annually by foreigners working mainly in the local textile sector. Referring to a Bangladesh Bank assessment, he said that the amount would be $200 million to $300 million. He also disagreed that the prices of medicines were high in the country compared with that of others countries. He hoped that the country would be able to produce Covid vaccine next year as both the private and public sectors were actively trying to obtain the manufacturing facility from abroad.

He also hoped that the import of Covid vaccine from the Serum Institute of India would resume in the next month. He noted that the suspension on export of vaccine from Serum had happened because of the ‘unfortunate’ situation of the Covid case spike in India. He said that he was against the misuse of the Digital Security Act 2018 to harass journalists. He, however, said that a Digital Security Act was imperative for stopping abuse of social media since a false post on social media could run havoc in society.

Govt preparing for Covid vaccine production from 2022: Salman F Rahman

The government has been taking all necessary initiatives to go into Covid-19 vaccine production from next year, said Salman F Rahman, private sector industry and investment adviser to the prime minister. Speaking to reporters, he also said pharmaceutical giant Incepta has an agreement with a Chinese company in this regard."They have full capacity to produce vaccines," Salman said during a 'Meet the Reporters' programme organised by the Dhaka Reporters' Unity.

Beximco Pharmaceuticals may also complete all processes to earn the capacity of producing Covid vaccines within the next four to six weeks, hoped Salman, who is the pharma's vice chairman. Meanwhile, he also said India's Serum will resume delivery of the remaining Covid-19 vaccines under a tripartite agreement signed last November between Beximco, Serum, and the Bangladesh government. Commenting on the country's capital market, Salman noted that there is an acute lack of institutional investors in the country.

"80% of all transactions here comes from retail or general investors. Compared to the capital market of the developed world, the picture in Bangladesh is the opposite. Our capital market is equity-based. There is no bond market here," he said."We are working to develop the bond market. The present [regulatory] chairman and commissioner are also sincere in this regard. Hopefully, the capital market will recover once the bond market becomes popular," he added. The veteran businessmen also spoke about the crisis in the banking sector and the rise of defaulted loans.

"The problem with our banking sector is that long-term investments are made here using short-term loans. This is a big problem." He said defaulted loans exist in all countries. However, he pointed out that in Bangladesh the problem mostly occurs with government banks. Salman, who is also the chairman of the Board of Editors of English daily 'The Independent', said a decision is on the way regarding the fate of the newspaper. He said the board will decide on whether both its magazine print and newspaper editions will continue to exist or will the print edition come to an end. "Our passion is involved with this newspaper. Various parties, including the Information Minister, do not want the newspaper to stop printing. It is the first 16-page colour newspaper of the country," he said. However, Salman added, "You also have to look at the financial capacity to keep a magazine running."

Regarding the recent fuel price hike, the PM's adviser said the price has increased in the country owing to the ongoing volatility in the international market for crude oil. The price will be reduced when the global rate falls.

Bangladesh a compelling case for UK investors

The UK is already the second-largest investor in Bangladesh, but there is vast potential to do more, Mohammad Sirazul Islam, executive chairman of the Bangladesh Investment Development Authority (BIDA), said recently.

"Bangladesh's liberalised investment policies and concessions encourage foreign investment. Our government is keen on facilitating more investments from the UK, which is a strong partner in our progress," Sirazul added. He was addressing the "Showcase Bangladesh 2021: Bangladesh-UK Investment Summit," recently where public and private sector leaders of Bangladesh and the UK came together to discuss the many win-win propositions that can take UK-Bangladesh trade and investment relations to new heights. The event was jointly organised by Standard Chartered and BIDA and took place in London on November 4.

Salman F Rahman, Private Sector Industry and Investment adviser to the prime minister, State Minister for ICT Zunaid Ahmed Palak; Md Sirazul Islam, executive chairman of Bangladesh Investment Development Authority; Robert Chatterton Dixon, British High Commissioner to Bangladesh; Saida Muna Tasneem, Bangladesh High Commissioner to the UK, Ireland and Liberia and Md Jashim Uddin, president of Federation of Bangladesh Chambers of Commerce & Industry attended the event.

The speakers made the case for greater engagement for UK investors in Bangladesh, one of the world's fastest-growing economies, hoping that foreign direct investment and international technical collaboration will greatly accelerate the attainment of the country's sustainable development plans. Salman F Rahman said, "The sustained, broad-based growth Bangladesh achieved over the last decade did not happen by accident, it was achieved through insightful planning and visionary leadership of our honourable prime minister." "Bangladesh's growth in nominal GDP in the first 36 years since independence has trebled in a third of the time, over the last 12 years," Naser Ezaz Bijoy, chief executive officer of Standard Chartered Bangladesh, said. "Despite the challenges posed by the pandemic, the country achieved one of the highest economic growth rates in the world, thanks to judicious policy intervention by the government and the resiliency of the people," he added. "The country is expected to maintain a growth trajectory that will enable GDP to exceed economies like Malaysia, Hong Kong, Singapore, Denmark and others. This is the right time to invest in Bangladesh, which I believe is the 'Best Kept Secret of Asia'."

Summit and Beximco invests on next generation

Summit and Beximco award BDT 45 million per annum matching grant to JAAGO Foundation
Summit Corporation and Beximco Holdings, two of the country’s largest conglomerates, awarded a matching grant of BDT 45 million per annum for three years to JAAGO Foundation, enabling them to educate 4,000 students across Bangladesh. JAAGO, utilizes their UNESCO award winning teaching model using ICT to ensure education over telephone calls, short messaging service and video conferencing system. This is even more important while the education institutions are closed due to the pandemic. Once the education institutions open, the grant will be used to run the digital schools. This is the first time two local conglomerates are jointly contributing such a large amount to a local Non-profit Organisation.

Muhammed Aziz Khan, Founder Chairman of Summit Group of Companies said, “The excellent work of JAAGO in using web-based learning for the poorer students all over Bangladesh is perhaps a model of educating in the future. Korvi has thought about what others will and should follow. Summit is committed to eradicate poverty and thus is privileged to support JAAGO’s internet-based schools. JAAGO has been awarded the UNESCO King Hamad Bin Isa Al-Khalifa Prize for the Use of ICT in Education, they deserve the Nobel prize.”

“Every child has the right to education — the right to go to school and learn. For too many, however, that right has been left in tatters by the COVID-19 pandemic,” says Shayan F Rahman, Advisor to the Board of Beximco Group. “Thankfully, we can cash in on the robust countrywide digital infrastructure and information technology prowess to enable distance learning opportunities for many. Beximco, along with Summit, is proud to partner with JAAGO to empower 4,000 children from less fortunate segments of our population with remote education.”

“Everyone has been affected, especially the education sector. Schools and colleges have been shut down during this global pandemic. At such a moment, Summit and Beximco have come forward to support the education sector. This is an example of the Bangladesh corporate sector stepping forward for the people of Bangladesh. I hope that this initiative will encourage other corporate houses to step forward and make a difference in the community,” said Korvi Rakshand, Founder, JAAGO Foundation.

At the virtual signing ceremony Directors of Summit Group Fadiah Khan, Azeeza Aziz Khan and Salman Khan were present on behalf of Summit and from Beximco Ajmal Kabir, Group Director and Samira Zuberi Himika, Executive Director were present. Two students of the first batch of JAAGO, Fatema and Lenin shared their stories. The virtual signing ceremony was hosted by Nobonita Chowdhury.

With this grant, JAAGO hopes to make a sustainable change in the lives of marginalised children and accelerate the development process of Bangladesh. The duration of this agreement is three years.

How can Bangladesh improve ranks in the business environment metrics?

Beximco Pharmaceuticals experiences strong growth

Beximco Pharmaceuticals Ltd’s net profit rose 62.38 percent year-on-year in the January-March quarter of 2021. In a stock exchange filing, the company reported that its consolidated earnings per share rose to Tk 3.28 in the third quarter from Tk 2.02 a year earlier. The company attributed part of the profit to the income from vaccine distribution and increased cash incentives from exports.

Beximco Pharma said it delivered five million doses of the Oxford-AstraZeneca vaccine in the third quarter and reported Tk 383.7 million in income from vaccine distribution after deducting related expenses from fees. Beximco Pharma signed a deal with the Serum Institute of India in 2020 to supply 30 million doses of the Oxford-AstraZeneca vaccine to the Bangladesh government.

Beximco Pharmaceuticals announced in January that it would acquire 54.6 percent stake of Sanofi Bangladesh in its bid to further strengthen its position in the drug market. 

A recent study by LankaBangla Investment Ltd revealed that local players dominate Bangladesh's pharmaceutical market. The Square Pharmaceuticals holds 17.73% of market share, while Incepta holds 10.21%, Beximco 8.39%, Opsonin 5.54%, Renata 4.97%, Healthcare Pharma 4.57%, ACI 4.43%, Aristo pharma 4.38%, Eskayef 4.36%, and The Acme holds 3.91%.