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Most MNCs register increased EPS in H1

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Most MNCs register increased EPS in H1

FE Report

The earnings of most of the multinational companies (MNCs) listed with the country’s capital market increased during the first half (H1) of this year as compared to the same period of previous year.

According to the un-audited financial statements for January-June 2018, the consolidated earnings per share (EPS) of seven companies, out of 11, increased during the period under review.

The EPS is a portion of a company’s profit allocated to each outstanding share of common stock. In short, it serves as an indicator of a company’s profitability.

The EPS of LafargeHolcim, BATBC, Singer Bangladesh, Bata Shoe, Grameenphone (GP), Marico Bangladesh and Linde Bangladesh increased in the H1.

Market operators said that the MNCs earn more as the companies are well-managed and have reputation of their product quality.

The brand value, profitability and future prospects have also driven up the share prices of the companies, which rose on their corporate performance, said a leading broker.

“Investors put their fund in those companies hoping for higher returns as their financial indicators are very strong,” he added.

However, EPS of Berger, Glaxo SmithKline, Reckitt Benckiser and Heidelberg Cement declined during the period under review.

The consolidated EPS of Heidelberg Cement declined to Tk 9.55 for January-June 2018 as against Tk 12.71 for January-June 2017.

The company noted the EPS was declined by Tk 3.16 due to higher cost of goods sold.

The EPS of Reckitt Benckiser also fell to Tk 19.37 for January-June, 2018 as against Tk 25.65 for January-June, 2017.

The company’s EPS declined by Tk 6.28 or 24 per cent in the H1 of 2018 as compared to the same period of last year because the company maintained its long term marketing investment strategy behind the key brands, said the company.

The listed MNCs, which account for approximately 28 per cent of the total market cap of DSE, also declare a significant amount of cash dividends every year after their listing with the bourses.

Among the top MNCs in terms of dividend declarations, Reckitt Benckiser disbursed highest 790 per cent cash dividend for the period ended on December 31, 2017.

BATBC and Marico Bangladesh disbursed 600 per cent cash dividends each, followed by Glaxo SmithKline 550 per cent cash dividend in 2017.

Linde BD disbursed 340 per cent cash dividend, followed by Bata Shoe 335 per cent and Grameenphone 205 per cent.

Inks Tk 936m deal with BREB

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Inks Tk 936m deal with BREB

FE Report

BBS Cables topped the turnover chart of the Dhaka Stock Exchange (DSE) on Wednesday following investors’ increased participation.

On the day, the premier bourse featured a turnover of above Tk 9.54 billion.

Of the total turnover, 28.2 per cent came from aggregate turnover featured by top 10 turnover leaders.

BBS Cables on Wednesday featured a turnover of Tk 374.9 million and grabbed 3.9 per cent of market turnover featured by the DSE.

Meanwhile, the company informed the DSE that it has inked an agreement with Bangladesh Rural Electrification Board (BREB) under “Distribution Network Expansion for 100 per cent Rural Electrification” projects for supply of conductor, insulated 600V for a total amount of above Tk. 936.06 million.

The goods will have to be delivered within four months from the date of signing of the contract on July 24 this year.

Bangladesh Building Systems Limited holds 16.67 per cent stake in the BBS Cables Limited, which will eventually have a prospective on the profitability of the company after completion of the job, said the disclosure.

The share price of BBS Cables on Wednesday closed at Tk 106 each with a marginal rise of 0.48 per cent or Tk 0.5.

Of other top turnover leaders, United Power Generation & Distribution Company Limited (UPGDCL) featured a turnover of Tk 370.9 million. The company grabbed around 3.9 per cent of the market turnover.

The share price of UPGDCL closed at Tk 318.50 each on Wednesday with a marginal rise of 3.18 per cent or Tk 9.8.

Pacific Denims featured a turnover of Tk 329.3 billion and grabbed 3.4 per cent of the market turnover.

Singer Bangladesh grabbed 2.9 per cent of market after featuring a turnover of Tk 278 million.

Of other turnover leaders, Active Fine Chemicals featured a turnover of Tk 267.3 million, followed by Usmania Glass Sheet Factory Tk 255.2 million, IFAD Autos Tk 235.5 million, Fu-Wang Food Tk 202 million, The Peninsula Chittagong Tk 195.1 million and Social Islami Bank Tk 194.6 million.

Thrust on formation of powerful RMG body

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Thrust on formation of powerful RMG body

Our Correspondent

CHATTOGRAM, July 25: Experts at a seminar on apparel industry said Bangladesh government should promote establishment of environment-friendly apparel factories by ensuring 9.0 per cent interest on loans.

They said the loans will be disbursed to entrepreneurs who intend to establish green factories, raise local textile plants with modern machinery, management practices, infrastructure development and enhance port facilities for efficient logistics in this fiscal year.

As the skill levels of the RMG workers have improved significantly over the years there has been a significant rise in the production of specialised items – a shift from the basic categories, the experts said.

They observed that with the introduction of advanced technology and machinery along with skilled labour Bangladesh is manufacturing everything and anything in the apparel industry.

They said this at the seminar on Driving Transformation in Bangladesh’s Apparel Industry jointly organised by the PricewaterhouseCoopers BD Private Ltd and the BGMEA at the Radisson Blu Chittagong Bay View hotel in the city today.

Mamun Rashid, Managing Partner of PwC Bangladesh made the welcome address while Dr Hossain Zillur Rahman, Chairman, PPRC and former advisor to a Caretaker Government addressed the seminar as the chief guest.

Former BKMEA president Fazlul Haque made the keynote address while Pallab De, Partner, Management Consulting PwC, presented PwC Insights into the Bangladesh apparel industry.

PwC Partner Advisory Arijit Chakrabarti, Director Advisory Arun Ray Chaudhuri, BGMEA former first vice president MA Salam and former first vice president SM Abu Tayyab presented overview of the port city-based RMG industry.

Dr Hossain Zillur Rahman said the RMG sector is the key growth driver of Bangladesh and the industry now becomes the distant second largest global export sector after China due to the efforts of the individual entrepreneurs.

He said development of Chittagong Port is very critical and the government seems to have lack of attention on the issue. He suggested formation of a Better Business Forum-like body of the BGMEA, BKMEA and FBCCI to work out plans for the development of the RMG sector.

SM Abu Tayyab came down heavily on TV channel talk shows about the wages of the RMG workers. He said that the RMG industries are relentlessly working to improve the life standard of the workers and have ensured healthcare services for the workers.

But the vested quarters are playing foul with the industry and sending the videos of the talk-shows to the BBC and CNN to malign the RMG industry of Bangladesh.

This was the first ever PwC-organised seminar in the port city and the event was attended by many RMG industrialists from the region.

The experts said the target to achieve $ 50 billion export earning from apparel industry by 2021 is possible but very challenging as the growth rate remains in the noticeable declining trend over the years.

There is no significant change in the market share of RMG (readymade garments) exports in the EU countries over the last few years and the export diversification to non-traditional markets including India and Russia can provide a big opportunity of growth.

Frame separate policy for SMEs: FBCCI

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Frame separate policy for SMEs: FBCCI

FE Report

The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) has called on the government to formulate a separate policy for the small and medium-sized enterprises (SMEs).

It strongly suggested bringing down the interest rate on loans for the SMEs to a single digit for their development.

The apex trade body also called for proper monitoring to ensure that the SMEs receive funds allocated for them.

The trade body leaders made the call at a meeting of the FBCCI standing committee relating to the ministry of industries (SMEs) at its conference room in the city on Wednesday.

They said SME entrepreneurs are now manufacturing technology-based modern products alongside traditional products.

They suggested conducting a survey to identify the demand and production base of the SME items being produced in the country.

They urged big entrepreneurs to refrain from producing and marketing SME products, as such activity may affect SME businesses badly.

Chairman of the standing committee Shamim Ahmed presided over the meeting and its director in-charge Md Abu Naser presented detailed future plan of the committee.

Representatives of the Bangladesh Standards and Testing Institution and different finance institutions attended the meeting.

FBCCI directors Khandaker Ruhul Amin, Abu Motaleb and Hafez Harun-Or-Roshid were also present.

 

BD eyes global halal meat market

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BD eyes global halal meat market

Talha Bin Habib

With the global halal economy booming, public and private-sector stakeholders have made a move to increase halal meat exports abroad, according to sector insiders.

The fisheries and livestock ministry has already urged Brazil to invest in halal meat products in Bangladesh for export to different global destinations.

Recently, fisheries and livestock minister Narayan Chandra Chanda sat in a meeting with Brazilian ambassador in Dhaka Joao Tabajara Oliveira.

Mr Chanda proposed the South American country through the envoy to set up a joint venture in Bangladesh for exporting halal meat, a ministry official told the FE.

To grab a big share of the global market, the Dhaka Chamber of Commerce and Industry (DCCI) has also taken an initiative to increase exports of halal products, including meat.

“We are planning to expand our export market for halal meat and other product,” DCCI president Abul Kasem Khan told the FE.

Ossama Imam, a halal food expert of a quality certification company in the United Arab Emirates (UAE), will arrive in Dhaka next month, he said.

The DCCI will seek his suggestions on how to increase exports of halal meat products.

“We will sit with the UAE expert in the second week of August,” said the DCCI chief.

Countries like Brazil, Thailand, Australia and New Zealand are dominating the halal market globally.

Currently, Bangladesh exports an insignificant volume of halal meat abroad.

Insiders said the predominantly Muslim country can grab a sizable share of the global halal market, especially in the Middle East countries.

But this calls for application of modern technology and government policy support, they added.

Chinese giant Tiens to expand business in Bangladesh

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Chinese giant Tiens to expand business in Bangladesh

Tiens Group, a Chinese conglomerate, has chosen Bangladesh as the first country to implement its flagship business project ‘One body-Multiple wings’.

Under a major investment move, the company will set up a manufacturing base of healthcare products.

It will also establish an e-commerce platform and an R&D (research and development) centre in collaboration with local education and research institutions.

The group plans to build world-class hotel and hospital, and cooperate with local universities to create scope for quality higher education.

Li Jinyuan, chairman of the Tianjin-based corporation, made the disclosure at a press briefing at a city hotel on Friday.

Tiens Group has successfully experienced two journeys since its inception in 1995.

‘One body-Multiple wings’ is the third entrepreneurial journey of the group, Mr Li said.

“Our first choice is Bangladesh as it offers excellent potential for such businesses,” he mentioned.

After Bangladesh, they will later enter other South and Southeast Asian, African, North and South American countries, Mr Li said.

A production base aside, he said, the firm has planned to introduce its cross-border e-commerce platform Maya.

Under a new global branding strategy, Tiens wants to expand its other key projects like All-legend International Hotel and Tai Ji Sun Hospital in Bangladesh.

“We call it ‘One body-Multiple wings’ strategy. Wings mean areas of services,” said the business leader.

Tiens has stake in areas like biotechnology, finance, logistics, property, education, retail and tourism.

According to Mr Li, his company has laid the groundwork globally for the past three years before choosing Bangladesh as their next outbound investment hub.

“It (the project) not only helps create jobs and vibrate economic wheels but also ensures healthy life of the people,” he asserted.

The founder of the firm said they have established Tianshi College and Tianyuan University at ¥30 billion.

They have also collaborated with 40 global entities where the students will get job opportunities.

Mr Li said they want to give such an education that will enable graduates to get returns from their investment for education within three years.

“We want to have such collaboration with Bangladeshi universities as well. This will give the students quality education with job facility,” he stated.

About future job prospects, Mr Li said Tiens wants to open at least 1.0 million outlets globally in the next three years.

“The owners need to recruit people to operate the stores. The number will be quite big,” he added.

Launched in northeastern Chinese port city of Tianjin, Tiens Group expanded its business operation in more than 190 countries and regions of the world.

The multinational came to Bangladesh in 2004. It has so far established three branches with over 40 franchises.

ECNEC okays nine projects involving Tk 75.39b

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ECNEC okays nine projects involving Tk 75.39b

The Executive Committee of the National Economic Council (ECNEC) approved on Sunday nine projects with the total estimated cost of Tk 75.39 billion, including a Tk 25.11 billion project to expand the scope for science education in some 200 government colleges across the country, reports UNB.

The approval came from an ECNEC meeting held at the NEC conference room in the city with EECNEC chairperson and Prime Minister Sheikh Hasina in the chair.

Briefing reporters after the meeting, Planning Minister AHM Mustafa Kamal said, “A total of nine projects were approved today involving an overall cost of Tk 75.39 billion.”

Of the total estimated cost, he said, Tk 67.51 billion will come from the national exchequer, while Tk 5.28 billion as project assistance and Tk 2.85 billion from the own funds of the organisations concerned.

Eight of the projects are new while another is revised one.

In terms of cost, the biggest project is ‘Expansion of Science Education’s Scope in Government Colleges Project’ involving Tk 25.11 billion. The entire cost will come from government funds.

About the project, the Planning Minister said the Secondary and Higher Education Division under the Ministry of Education will implement the project by June 2021.

The goals of the project are to extend infrastructures, expand scope for ICT and science research and enhance skills of teachers with a view to expanding scope for science education.

The interest of students and the youth for science education has declined in recent times, though science and technology are indispensable in the current world, the minister said.

The other projects are ‘Construction of Chittagong Hill Tracts Complex on Bailey Road in Dhaka (1st revised) Project’ with an estimated cost of Tk 1.94 billion, ‘Collection of 35 commercial and eight supportive water vessels for BIWTC and Construction of two new slip ways’ with Tk 13.19 billion, ‘Establishment and Commissioning of Optical Fibre Based Telecommunications in 575-kilometre secondary line of Bangladesh Railways’ with Tk 6.87 billion, and Preparation of Master plan and Development of Basic Infrastructures in Upazila Towns (non-municipal)’ with Tk 13.80 billion.

The projects also include ‘Development of Physical Infrastructures (Roads and Drains) of Gazipur City Corporation’ with Tk 6.60 billion, ‘Construction of Residences for Cleaning Workers under Chattogram City Corporation’ with Tk 2.31 billion, ‘Enhancing Tolerance of destitute community (Provati) by Development of Infrastructural skills and Information’ with Tk 7.57 billion, and Installation of 0.5 million smart pre-paid metres in the areas under Northern Electricity Supply Company’ with Tk 4.14 billion.

Source tax on export proceeds to be lowered again to 0.70pc: Tofail

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Source tax on export proceeds to be lowered again to 0.70pc: Tofail

Commerce minister Tofail Ahmed speaks at an institutional dialogue on the sustainable development goals organised by Federation of Bangladesh Chambers of Commerce and Industry with the SDG wing of the Prime Minister’s Office at the Westin Hotel in Dhaka on Sunday. Principal coordinator of the SDG affairs at the PMO Abul Kalam Azad, FBCCI president Shafiul Islam Mohiuddin and FBCCI vice-president Md Muntakim Ashraf were present.

New Age Report

Commerce minister Tofail Ahmed on Sunday said that income tax at source on export proceeds would possibly return to its previous rate (0.70 per cent) for the current fiscal year of 2018-2019.
At a dialogue on the sustainable development goals, he said that he raised objection during the budget formulation process against the increase of the tax to 1 per cent for the current fiscal year from the previous FY’s 0.70 per cent.
Business leaders from the export sectors have already held a meeting with the prime minister and discussed the issue, he said.
The Federation of Bangladesh Chambers of Commerce and Industry arranged the institutional dialogue with the SDG wing of the Prime Minister’s Office on role of private sector in achieving SDGs at the Westin Hotel in Dhaka.
Tofail said that exporters might play an important role in achieving the SDG targets if they were provided with required facilities.
But, the corporate income tax has been reduced by 2.5 per cent for banks, while it has been raised for exporters in the national budget, he said.
The National Board of Revenue also increased the source tax to 1 per cent in the budget.
Possibly, it will again come back to 0.70 per cent, he added.
He said that export earnings from goods reached $37 billion in the just concluded fiscal year of 2017-2018.
Of which, earnings from readymade garment items stood at $30 billion, he said, adding that overall export earnings from goods and services reached $41.5 billion in the year.
FBCCI president Shafiul Islam Mohiuddin said that a delegation of exporters on Sunday held a meeting with prime minister Sheikh Hasina to press for their demand for reducing the source tax on export.
He said that the government would have to provide all necessary policy support and conducive business environment including an improved ease of doing business to achieve the SDGs.
About the recent cut in interest rate by banks, he said that he, as the president of the FBCCI, at a recent meeting requested the prime minister to take steps in this connection.
Principal coordinator of the SDG affairs at the PMO Abul Kalam Azad said that it would not possible for the government employees alone to achieve the SDGs.
The private sector must come forward in this regard, he said, adding that more than half of the financing
must come from the private sector to achieve the target.
At the dialogue, businessmen took part in 10 separate thematic discussions on issues like entrepreneurship and youth employment, quality education and skill development, urbanisation, infrastructure, access to food, health care, environment and public private partnership.
FBCCI vice-president Md Muntakim Ashraf spoke, among others, at the programme.

Govt to take $270m hard loan for Biman

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Govt to take $270m hard loan for Biman

Staff Correspondent

The government is taking hard term loan worth $270 million from HSBC for buying to more aircrafts from Boeing.
The interest rate of the loan would be 7.2 per cent while repayment period is 12 years, said finance minister AMA Muhith at a briefing on Sunday.
Earlier, he endorsed a proposal from the loss making Bangladesh Biman to take the loan from the HSBC while presiding over a meeting of the hard term loan committee at his secretariat office.
Biman has been looking for the loan since January this year with the plan of adding two Boeing 787 Dreamliner aircraft to its fleet by November.
The Boeing 787 Dreamliner is a long-range, mid-size, wide-body, twin-engine jet airliner developed by Boeing Commercial Airplanes.
Biman has plans to add two more same types of aircraft by September 2019 as part of its deal with Boeing signed in 2008 to procure a total of 10 aircraft.
Currently, Biman has a 13-craft fleet which includes four 777-300ER, two 777-200ER, one A330-200, four 737-800 and two Dash8-Q400 aircraft.
According to the proposal to the hard term loan committee, Biman would spend the money to pre-delivery payment for the 787 Dreamliner.
Answering why the government was taking loan for the loss-making Biman, Muhith said aviation business was not profitable anywhere in the world.
‘You have to take the loan for the interest of the national airline,’ he added.

Alternative dispute resolution can help reduce bad loans

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Alternative dispute resolution can help reduce bad loans

Star Business Desk

Alternative dispute resolution (ADR) should be used to curb the spiralling bad loans, which pose a serious challenge for the banking sector as well as the economy, analysts said yesterday.

“To reduce the number of cases in the banking industry and bring down the non-performing loans to a tolerable level, the ADR can be used as an effective alternative mechanism,” said Abul Kasem Khan, president of DCCI.

He spoke at a roundtable on “ADR in managing the risk of non-performing bank loans” jointly organised by Bangladesh International Arbitration Centre (BIAC) and Dhaka Chamber of Commerce and Industry (DCCI) at the DCCI auditorium in the capital.

At the end of March 2018, the NPL in the banking industry stood at Tk 88,500 crore, according to Khan.

Bad loans stand at 10.78 percent in Bangladesh, compared to 1.6 percent in Malaysia, 1.9 percent in the Philippines, 2.9 percent in Thailand and Indonesia, about 2.5 percent in Cambodia, 2.6 percent in Sri Lanka and 2 percent in Nepal, he said.

Khan recommended for improvement of corporate governance at banks, adopting zero-tolerance policy towards loan recovery, bringing loan defaulters and their collaborators to justice and introducing alternative recovery options.

While presenting the keynote paper, Shafayat Ullah, head of legal affairs at City Bank, said: “The ADR saves time, cost and it is confidential.”

He said large defaulters are rarely penalised; rather loans are being restructured.

To overcome the problems, he stressed the need for the introduction of the ADR as an alternative route that can be used in managing default loans. “All organisations should incorporate mediation-arbitration clause in the commercial contracts.”

He said 11 percent of the total loans are bad loans in Bangladesh at present.

Mohammad Shahidul Haque, senior secretary of the legislative and parliamentary affairs division of the law ministry, said: “We need to concentrate on the implementation part of our legislation.”

Haque said 2 percent NPL is allowable in developed nations whereas it is more than 10 percent in Bangladesh which is not acceptable.

He said if policy reforms are needed to reduce the NPL, the government is willing to do that.

Effective implementation of law is mandatory to convert NPL into performing loans, said Mahbubur Rahman, chairman of BIAC.

He called for implementation of law and amendment of regulations, if needed, for a healthy banking sector.

“Our financial sector can be further strengthened if we can bring down the volume of NPL in the financial industry.”

The NPL is linked with the liquidity of banks, said Muhammad A (Rumee) Ali, BIAC CEO.

“There must be a way out before going to courts to realise bad loans. There should be arbitration clause in the contract.”

He sought cooperation from the legislative and parliamentary affairs division for popularising the ADR and hoped that the use of ADR would be put in place to mitigate NPLs before going to courts.

Nasreen Begum, additional secretary of the legislative and parliamentary affairs division, said the Artha Rin Adalat Ain 2003 needs to be amended and needs to include the provision of arbitration.

Salma Nasreen, additional secretary of the financial institutions division, said a sound economy depends on an efficient banking system.

Tanjina Ismail, president of the Bangladesh Women Judges Association, said it is time for banks to rethink and redefine their loan recovery systems.