Economy of Bangladesh
Economy of Bangladesh
Economy of Bangladesh
Highlights
Eyeing on 2016-17 - the leap year
Comparatively High tax rates can be justified by the rapid development work
undertaken by the government which is essential at this stage of the economy to
harvest growth. The government has also done a great work on maintaining the
inflation level. However on a free market economy standpoint it is evident that
without stronger flow streaming from the private sector higher trajectory will not
be achieved. Particularly insanely high spreads in the financial sector is one of
the biggest hindrance that needs to be immediately addressed to achieve higher
efficiency in the system.
Despite relentless efforts to stimulate growth we have consistently shy out from
achieving +7% growth. I believe as a nation we have too long pursued a very
closed and conservative approach in terms of policies and frameworks keeping
in mind a low cost strategy to support continued growth. With a wide base of
young population and era of globalization it is time to promote fresh ideas and
concepts to move up the scale of economic freedom.
Balance Of Payments 18
Selected Industry Overview
With Interactive on The
Ground Notes 23
Capital Market
29
5
0
the country has been historically resilient to domestic and external shocks, diversification in
2010 2012 2014 2016
Forecast export basket and dependency on the European Union needs to be reduced.
Sources: Bangladesh Bureau of Statistics, 2014
National Accounts Statistics. June; CBL estimates.
Growth is expected to rise to 6.4% in FY2016, aided by higher remittance and export
growth, as well as the continued economic recovery in the United States (US) and the Eurozone area. Considering political
stability prevails, consumer and investor confidence is likely to rise, thereby stimulating demand and strengthening growth
momentum. In addition, infrastructure constraints are expected to ease with the completion of ongoing projects, particularly the
power plants. Previous analysis reveals that capital accumulation (through private investment) played a major role in driving
and accelerating the pace of economic growth, followed by growth in the labor force. The sluggish investment demand was also
demonstrated by the augmented excess liquidity in the banking system. Compounding the situation, political confrontation which
was often accompanied by violence also constrained economic activities in later half of FY2015, contributing to a slowing down
in the pace of economic growth. Also slow progress in implementing the necessary economic reforms has made it increasingly
difficult to attain a breakthrough in the economic growth front.
Macroeconomic management remains prudent. The central bank’s cautious monetary policy stance together with favorable
international oil, food, and commodity prices helped lower the inflation rate. The larger trade deficit along with the deficit in the
services account is expected to push the current account balance to a modest deficit at the end of FY2015. The fiscal deficit
remains within prudent limits. Inflation will fall in FY2016 with lower food and oil prices in international markets. Bangladesh’s
economic and social progress notwithstanding, the country still faces a number of medium- to longer-term challenges. Increasing
investment to 30%–35% of GDP is the major challenge to attaining a higher GDP growth trajectory.
quality, Bangladesh is less competitive relative to its potential contenders including Cambodia, Vietnam, Pakistan, and Sri
Lanka. Bangladesh needs to increase the quality of roads, ports, railways, electricity supply, and water supply and sanitation.
Capacity constraints in government agencies also need to be addressed.
BAN - Bangladesh, IND - India, PRC - People’s Republic of China, CAM - Cambodia,
MYA - Myanmar, PAK - Pakistan, SRI - Sri Lanka, THA - Thailand.
According to the World Bank’s Doing Business 2015, Bangladesh ranked 188th of 189 countries on the ease of electricity
delivery. Cost of gas shortage and power outages has been estimated to be about 0.5% of GDP. Electrification rates however
rose from 35% in FY2003 to 66% in FY2014, and transmission and distribution losses were reduced; nevertheless, supply
is still irregular and the system is dependent on natural gas. Power outages remain high, as do losses in the transmission and
distribution system. Even though installed capacity is over 10,000 megawatts, available capacity is limited to 6,000–7,000
megawatts. The problem is set to get worse, with additional supply required to meet growing demand in the coming years. In
addition, major regulatory issues that complicate meeting demand involve higher transaction costs and too many procedures
compared with comparator countries.
collaboration in R & D
Diversion of public funds
Stage of cluster
Wastefulness of
and engineers
Quality of “scientific
government spending
Transparency of
government policymaking
infrastructure
Quality of port
infrastructure
Burden of government
development
Value chain buniess
transfer
University-industry
Availability of scientists
Quality of overall
Source: Global Competitiveness Report 2014-15, WEF and Doing Business Report, World Bank.
Note: Data ranges from 1-7 where 1 represents the lowest value and 7 is the highest value if not mentioned otherwise.
7
Bangladesh needs to make major progress in cutting the costs of doing business to boost private and foreign investment. Efforts
are needed for streamlining tax payment procedures, getting credit, registering property, and enforcing contracts. Bangladesh ranks
131st on the ease of getting credit compared with India at 36, and Pakistan at 118. Contract enforcement, takes 1,442 days,
costs 66.8% of the value of the claim, and requires 41 procedures in Bangladesh.
Technological readiness
Health and primary education
Business sophistication
Infrastructure
Macroeconomic environment
Market size
Goods market efficiencey
Innovation
GCI Index 2014-15
Institutions
Land shortages have emerged as a binding constraint to investment. Unplanned urbanization and population pressures make
finding suitable locations for enterprises difficult. Long delays and high cost of property registration, weak land ownership data,
lack of automation in land records, and poor zoning laws make the land market inefficient. In terms of registering property,
Bangladesh ranks 184th of 189 countries, even below neighboring countries, such as Pakistan at 114, India at 121, and Sri
Lanka at 131. Registering property in Bangladesh requires eight procedures, 244 days, and costs 7.2% of the property value.
Institutional reforms for simplified land transactions and registration, improved land administration and record keeping, and
establishment of more economic zones are important for attracting domestic and foreign private investors.
Protecting investors 43
Paying taxes 83
Starting business 115
Getting credit 131
Trading across borders 140
Construction permits 144
Resolving in solvency 147
Registering property 184
Enforcing contracts 188
Getting electricity 188
2. FISCAL MANAGEMENT
We will not term the fiscal targets for FY15-16 to be overambitious despite weak link in the budgetary framework and the fact
that the last three budgets never came close to be true. Our focus however lies on the bigger picture that the current government
has in mind of achieving the middle income country tag by 2021. We believe the track is set right and a few more revisions will
actually set the country to achieving and more importantly maintaining the +7% GDP growth. Our estimates point out FY17
to be the year for growth on the higher trajectory. Given the recent progress in infrastructure projects which we believe will be
accessible by FY17 and under the preconception of political calmness +7% GDP growth is achievable by FY17. However
maintaining higher trajectory highly depends on smooth shifts on the demand and supply side of the economy, ensuring corporate
governance in all levels, higher export of skilled manpower, diversification of export basket, modernizing rural economy, and better
mix of fiscal and monetary policies.
Fiscal indicators
Tax revenue Development spending
Nontax revenue Domestic financing
Nontax revenue Domestic financing
Capital spending and net lending
% of GDP
20_
10_
0_
-10_
2010 2011 2012 2013 2014 2015 2016
Budget Forecast
The Ministry of Finance however needs to undertake an early assessment to review the revenue collection situation. We expect
a number of reasons behind this expected below par performance in the area of revenue mobilization for the upcoming budget.
Firstly a number of tax incentives provided in the last budget, including lower corporate income tax rate for non-publicly traded
companies, significant reduction in supplementary duties, with a view to boosting private investment, will result in lower revenue
collection. Secondly, in absence of any lumpy sources (e.g. revenue collection from mobile spectrum fees) it will be difficult
to attain the target for non-tax revenue. Third, administrative capacity and revenue collection effort did not see any major
improvement. Fourth, international prices fell significantly for a number of imported commodities, while exchange rates of BDT
against the currencies of major trading partners remains stable (and even appreciated somewhat) resulting in decline in revenue
collection at import stages.
9
Consequently lower expenditure under non development heads followed by a lower amount of probable subsidy requirements
might help the balance to attain equilibrium. Though Pay and Allowances will account for a significant share lowering the national
certificate rates could help attain de-growth in interest payments while the final check will largely depend on government’s decision
on subsidy package and recapitalization of state owned banks. Subsidy management has become an integral part of fiscal policy
in Bangladesh. In FY2016, cash subsidy for exports is expected to drop particularly in RMG sector where reduction in tax at
source to 0.3% from 0.8% in the last fiscal resulted in drop in government revenue to an estimated amount of BDT 25 billion.
On the other hand, in view of the declining global prices of petroleum products there is growing pressure on government to slash
the administered prices of petroleum products. However the government would have space to not considering cut in fuel prices
considering the subsidy requirements for power and energy sectors (for PDB and BPC).
Hydro, 1.5
HSD, 3.0
Import, 5.6
HFO, 16.4
Coal, 2.6
Gas, 70.7
Source: BPDB
First the subsidy is not required for BPC during FY2016, as the lone importer of petroleum products in the country is making
profit due to drop in international price of oil since July 2014. Given the fact that the current price is hovering around USD
56-74(based on products) and with international organizations expecting the prices to remain at this level BPC can earn profit
of up to USD 0.4 billion in place of a similar amount of budgetary allocation as subsidy for the state-owned organization. It may
be recalled here that, during FY2014 average import prices of crude petroleum and refined petroleum by BPC (per bbl) were
USD 109.6 and USD125.3 respectively, while the corporation incurred a loss to tune of about USD 0.3 billion on this count.
Second in absence of any major changes in the composition of the fuel demanded for electricity generation, subsidy requirement
for BPDB will remain high. The budget for FY2015 earmarked about USD 1 billion for BPDB with the assumption of an
adjustments in the electricity prices in the middle of the fiscal year. In their submissions, several power related agencies have
called for an increase in the tariffs to the tune of 17.5-70.1 per cent from the existing levels, which so far the energy regulatory
commission rejected. It is essential for the government to lower tariff on specific oil segment such as diesel which has an essential
role in both food and non-food inflation table while effectively taxing the higher end community to maintain a balance in the
system. Maintaining inflation and adjusting the gas situation specifically in terms of usage in producing electricity would be the
biggest challenge for the current government.
10
17.1
6.2
5.1
2.4
1.4
Amidst concerns about the performance of the economy due to ongoing blockade and shutdowns, the planning Minister told
recently that prevailing political unrest was not affecting the implementation of annual development programme (ADP). During
July-February of FY14-15 38% of the total ADP outlay was implemented which is incidentally the same percentage covered
during the same period of the last fiscal. The government adopted national budget of USD 32 billion for FY 2014-15 of which a
little over USD 10 billion was allocated for ADP. In the ADP, 66% of the outlay was local currency and 34% was project aid.
Source: Ministry of Planning, 2014. ADP Implementation Progress, Monthly, December, Dhaka
The ADP had 1034 projects excluding self-financed projects of autonomous bodies. ADP was later revised March 10, 2015
with the revised outlay now at USD 9.6 billion. The nomenclature of the revised annual development programme (RADP) has
not been changed. The transport sector has received the highest allocation (23.67%) followed by education and religion sector
(12.03%), electricity (11.01%), rural development and rural institutions sector (9.70%), physical infrastructure, water supply
and housing sector (9.50%), science, information & communication sector (6.43%) and agriculture sector (5.77%). Now the
RADP 2014-15 contains 1204 approved projects with allocation including a list of 356 fresh projects to facilitate the receipt of
foreign aid in addition to a list of unapproved and unallocated 605 projects.
Mathematically, the amount of money for ADP implementation increased in February than what it was in January 2015. This
does not however reflect physical progress of implementation. For example of the list of projects which were supposed to be
completed by June 30, 2015 in the original ADP, 324 projects were earmarked for completion. Now, the RADP shortened the
list showing only 280 projects for completion. Thus financial progress and physical progress do not always coincide. A further
analysis of the ADP of FY2013-14 shows there were 1366 projects in the RADP of 2013-14 with an outlay of USD 7.7
11
billion. The report showed 95% utilization of total allocation, however 290 projects were set for completion during FY2013-14 of
which 151 projects were declared complete while 82 projects beyond the list were declared complete. In addition IMED observes
that 181 projects were declared “complete” without actual completion. Among 233 completed projects (declared), 189 projects
were found time over-run and 86 projects were found cost over-run. Planned average implementation period of the completed
projects was 2.89 years but it took an average implementation period of 5.04 years. According to MoF data, implementation of
ADP projects was 83.4 per cent of original allocation.
Notwithstanding political unrest, revenue collection by the National Board of Revenue (NBR) grew by 16.7% during July–
January FY2015 over the same period of the previous year. Although NBR revenue growth fell short of the target during the
first 7 months, it remained close to the overall revenue growth target of 16.8% set for the FY2015 budget over the revised
budget of FY2014 due to improved import activity. Revenue collection from income tax during July–January of FY2015 rose
by 17.6%. Revenue from domestic indirect taxes grew by 18.3% during the same time. Collection from domestic value-added
tax rose by 17.4%, supplementary duty by 17.1%, excise duty (confined to manually made cigarettes, brickfields, and cinema
halls) by 85.8% and turnover tax by 9.1%.
11.4
19.0
Revenue collection from import-based indirect taxes grew by 13.6% during July–January FY2015. Likewise, supplementary
duty collection rose by 20.0%. Import-based value-added tax increased by 15.2%, and export duty by 23.7%. Although the
authorities made significant progress in a range of structural reforms under the International Monetary Fund’s extended credit
facility supported program, efforts are still under way to strengthen the tax administration. The FY2015 budget targets 19.3%
12
growth in tax revenue, to lift the tax/GDP ratio to 10.1% from 9.6% in FY2014, which is higher than nominal GDP growth.
This might sound unreasonable especially amidst economic activities affected by political unrest, unless discretionary tax measures
are adopted.
During the first half of FY2015, deficit financing was lower at BDT 183.8 billion compared with BDT 185.4 billion during
the same period of FY2014, a decrease of 0.9%. Domestic sources financed about 54.4% of the total deficit. Political unrest
has affected the vital foreign exchange mobilization rate. Of the total domestic financing (BDT 100.1 billion), the government
borrowed a negative 49.0% from the banking system, and 149.0% from the nonbanking system.
Low level of attainment of budgetary targets for FY2014 was reflected in the low level of budget deficit. With a target of budget
deficit at 5% of GDP, FY2014 closed with a much lower budget deficit of 3% of GDP. Heavy reliance on domestic sources
continued till the end of the fiscal year and closed at 87% of total financing. In the last quarter, the financing structure of the
budget deficit had changed significantly. Government’s income from programmed sources such as sales of National Savings
Deposit (NSD) certificates had increased notably and surpassed the revised target by USD 0.5 billion, with over 3 months
remaining.
13
60_ _20
40_ _15
20_ _10
0_ _5
Jul Jan Jul Jan Jul Jan Jul Nov
2011 2012 2013 2014
With ample liquidity in the banking system, the central bank raised the cash reserve requirement from 6.0% to 6.5%, effective
in June 2014. Easy liquidity nevertheless caused the call money rate to decline. The unchanged policy rates and lower Treasury
bill yields are consistent with the central bank’s objective of stimulating investment and growth, keeping in view downward
inflationary trends.
The weighted average yield on 91-day Treasury bills fell to 6.4% in May 2015 from 7.1% a year earlier, and banks’ weighted
average lending rate eased to 11.9% in March 2015 from 13.4% at the end of March 2014. The deposit rate also declined, to
7.1% from 8.2% during the same period, shortening banks’ interest rate spread by 28bps to 4.9%. However we still term the
spread to be insanely high accommodating inefficiency in the financial sector. Given the inflation level it is unlikely for the deposit
rates to be moved downward and hence 100bps reduction in advances in all sectors (table below) except Agriculture (50bps
reduction) would certainly help address efficiency in the system and stimulate growth in the economy.
Interest Investment Interest Investment Interest Investment Interest Investment Interest Investment Interest Investment Interest Investment
Rate on Rate on Spread Rate on Rate on Spread Rate on Rate on Spread Rate on Rate on Spread Rate on Rate on Spread Rate on Rate on Spread Rate on Rate on Spread
Advances Deposits Advances Deposits Advances Deposits Advances Deposits Advances Deposits Advances Deposits Advances Deposits
2014-15
July 12.84 7.71 5.13
August 12.75 7.63 5.12
September 12.58 7.48 5.10
October 12.49 7.40 5.09 12.00 7.40 4.60 16.04 11.54 4.50
November 12.49 7.32 5.17 13.84 7.35 6.49 10.57 7.33 3.24 11.93 7.34 4.59 12.63 7.33 5.30 12.10 7.32 4.78 15.94 11.36 4.58
December 12.46 7.25 5.21 13.88 7.27 6.61 10.35 7.25 3.10 11.90 7.24 4.66 12.44 7.23 5.21 12.04 7.25 4.79 15.83 11.20 4.63
January 12.32 7.26 5.06 13.61 7.26 6.35 9.92 7.26 2.66 11.83 7.26 4.57 12.29 7.26 5.03 11.94 7.26 4.68 15.68 11.12 4.57
February 12.23 7.19 5.04 13.59 7.19 6.40 9.62 7.19 2.43 11.83 7.19 4.64 12.47 7.28 11.83 7.19 4.64 15.60 11.04 4.56
March 11.93 7.06 4.87 13.11 7.06 6.05 9.50 7.06 2.44 11.65 7.06 4.59 12.14 7.06 5.08 11.59 7.06 4.53 15.47 11.01 4.46
Source: Statistics Department, Bangladesh Bank.
Scheduled banks’ excess liquidity remained high at BDT 1,047 billion at the end of March 2015, up from BDT 924.0 billion
at the end of June 2014. Despite the declining interest rate of commercial banks, the cautious monetary policy stance, as well
as significant sterilization operations conducted by the central bank and the sluggish business activity reduced demand for credit,
contributing to the buildup of liquidity in the banking system. The outstanding borrowing of the government through sales of
national savings directorate certificates stood at BDT 976 billion at the end of March 2015, up from BDT 722 billion a year
earlier, compensating the decline in net credit growth to the government from the banking system.
10
-5
-10
Mar Jan Sep Dec Mar Jan Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec
The weighted average lending and deposit rates of commercial banks have been declining remaining positive in real terms because
of lower inflation. While lower private credit demand and higher competition among banks contributed to the decline in the
lending rate, the large excess liquidity in the banking system contributed to the lower deposit rate. Despite tightened monetary
measures, disbursement of industrial term lending rose strongly.
In the first three quarter (July-March) of FY2015, disbursement of industrial term lending rose over 45% to BDT 448 billion
from BDT 308 billion a year earlier. A further analysis reveals that disbursement to large-scale industries increased strongly by
60.3% (accounting over 76% of total industrial term lending). Loans to agriculture and small and medium-sized enterprises
(SMEs) were given priority considering their role in contributing to inclusive economic growth and job creation, in line with
Bangladesh Bank’s policy directives. Of the BDT 155.5 billion targeted for new credit disbursement to agriculture (including
nonfarm rural credit) in FY2015, BDT 123.6 billion was disbursed during the first 10 months of the year, registering a decline
of 5.7% over the same period of FY2014. Outstanding loans to SMEs reached BDT 1.4 trillion in December 2014, 17.5%
growth over December 2013. The ratio of SME loans to total loans in the banking system rose to 24.5% in December 2014
from 23.9% in December 2013. A detailed analysis of the SME sector is provided in the later part of the report.
State Owned
Banks, 19.99%
Private Banks,
74.90%
The half-yearly monetary policy statement (MPS) for January–June 2014 targets reducing average inflation to 6.5% by June 2015,
while ensuring adequate credit growth to achieve respectable economic growth. The MPS projects that year-on-year M2 growth will
remain within 16.5% in December 2014 and private sector credit growth within 15.5%. The central bank pays continued attention
to the need for fiscal–monetary coordination and the necessity of tracking government borrowing to help keep it within the limit set
16
in the budget. It will have to continue to strengthen its focus on finance sector stability and capital market development.
The central bank is expected to continue interfering the exchange rate with the rest of the competing neighbor’s currency
consistently depreciating posing threat to the RMG exports. Currently the foreign currency reserve stands over USD 24
billion (the highest mark in the history of the nation) covering imports for over 8 months.
20_
10_
0_
Q1 Q3 Q1 Q3 Q1 Q3
2012 2013 2014
Source: Bangladesh bank, Bangladesh bank Quarterly
Financial soundness indicators for the banking system weakened as indicated by the gradual increase in gross nonperforming
loans (NPLs). The ratio of gross NPLs to total loans in the banking system rose to 9.7% at the end of December
2014 from 8.9% at the end of December 2013. The gross NPL ratio for state-owned commercial banks (SCBs)
increased to 22.2% at the end of December 2014 from 19.8% at the end of December 2013, while the gross NPL
ratio for private commercial banks rose to 5.0% from 4.5%, and for specialized banks it was a whopping 32.8% from
26.8% a year back. The gross NPL ratio for foreign banks also increased to 7.3% from 5.5% during the same period.
The net NPL ratios for all banks rose to 2.7% at the end of December 2014 from 2.0% at the end of December
2013. Although the regulatory capital position of banking improved in general, in terms of the risk-weighted capital–
asset ratio, SCBs are short (by 1.7%) of meeting the regulatory requirement of 10.0%, while specialized banks had a
larger shortfall. However better positions in PCBs and FCBs (12.54% and 12.67% respectively) which constitute the
majority (over 70%) of the market share resulted to overall risk-weighted capital–asset ratio of the scheduled banks to
a healthy 11.35% against regulatory requirement of 10%.
On the profitability matrix for CY2014, FCBs clearly stand out the list with 3.4% ROA and ROE of over 17%.
The PCBs operate on a scale of ROA of 1% and ROE of 10.3%. The overall position of ROA and ROE for
the sector stands at 0.6% and 8% respectively driven down by negative returns from SCBs and specialized banks.
The performance of SCBs has deteriorated and the asset quality remained low, mainly reflecting weak credit decisions
which also contributed to lower financial soundness. In addition to the concern expressed by the central bank in the
latest MPS, it has taken steps to improve the financial position of SCBs through enhanced supervision and corporate
governance such as deploying the Real Time Electronic Dashboard. With the new authoritative power on SCBs, the
central bank aims to improve banking governance by encouraging creditworthy borrowers and ensuring strong lawful
consequences for habitual defaulters. However effects of the reforms are yet to be reflected in the accounts and are
unlikely to happen before the BASEL-III implementation timeframe of 2019.
17
INFLATION
Overall inflationary trend fortunately had been on the downtrend during the first ten months of FY2015 led by downtrend on
the food basket however non-food inflation peaked from December onwards when supply chains were disturbed due to strikes
and blockades. Containing food inflation below 6% and maintaining the same on non-food side would be the key to higher
trajectory. Maintaining an overall lower inflation level would also smoothen the drop in market rates and financial sector spread
which is an essential ingredient to higher efficiency in the financial system.
Consumer Price Index(CPI) and Rate of Inflation at National Level (Base: FY2005-06=100
Twelve-Month Average Basis Point to Point Basis
General Food Non-food General Food Non-food
Index Inflation Index Inflation Index Inflation Index Inflation Index Inflation Index Inflation
2014-15
July 196.18 7.28 211.11 8.55 177.04 5.41 199.94 7.04 214.75 7.94 180.95 5.71
August 197.27 7.24 212.40 8.50 177.86 5.37 202.53 6.91 218.66 7.67 181.85 5.76
September 198.36 7.22 213.72 8.48 178.68 5.34 205.39 6.84 222.66 7.63 183.25 5.63
October 199.43 7.18 214.97 8.37 179.51 5.40 206.81 6.60 224.23 7.16 184.47 5.74
November 200.44 7.10 216.10 8.18 180.36 5.47 206.86 6.21 223.81 6.44 185.14 5.84
December 201.44 6.99 217.13 7.91 181.31 5.60 207.78 6.11 224.29 5.86 186.62 6.48
January 202.43 6.87 218.21 7.68 182.20 5.64 210.12 6.04 226.61 6.07 188.98 6.01
February 203.45 6.76 219.30 7.45 183.13 5.71 210.73 6.14 227.26 6.11 189.58 6.20
March 204.49 6.66 220.44 7.24 184.04 5.78 211.31 6.27 228.12 6.37 189.97 6.12
April 205.54 6.57 221.60 7.03 184.95 5.85 211.51 6.32 228.39 6.48 189.86 6.08
Source: Bangladesh Bureau of Statistics.
Urban inflation continued to be higher than rural inflation. Year-on-year urban inflation declined to 6.5% in March 2015,
from 8.0% the year earlier. Year-on-yearrural inflation moderated to 5.8% from 7.2%. Rural food inflation slowed to 5.8% in
March 2015 from 8.1% in March 2014, but rural nonfood inflation rose to 5.8% from 5.2%. Urban food inflation moderated
to 6.4% in March 2015 while urban nonfood inflation rose to 6.3%. Average inflation decreased to 6.6% in April 2015 from
7.4% in April 2014. Although an expected increase in gas and electricity prices may put some pressure on prices, average
inflation is expected to remain at 6.5% bythe end of June of FY2015 with easing supply constraints, a better crop outlook, a
supportive monetary policy, and a sufficient public stock of food grains. Lower food and oil prices in the international market
will also contribute.
Annual inflation
%
12_ 5-year moving average
9_
6_
3_
0_
2010 2011 2012 2013 2014 2015 2016
Forecast
Source: Bangladesh bank, 2015. Monthly Economic Trends.
February. http://www.bangladesh-bank.org; CBL estimates.
18
4. BALANCE OF PAYMENTS
Current account components
Exports
Remittances
Imports
Net services
Net income
Current account
Other net transfers
balance
$billion % of GDP
50_ -4
25_ -2
0_ -0
-25_ _-2
-50_ _-4
2010 2011 2012 2013 2014
Weak performance of export earnings has continued since the beginning of FY2015. Exports grew marginally by 2.6% to
USD 25.3 billion during the first ten months (July14-April15) of FY2015, against growth of 13.2% during the same period
of FY2014. Though weaker orders executed in FY2015 has consistently been pointed to the political unrest we strongly
disagree to political confrontation being the major cause for drop in exports. Rather slower export growth is more dependent on
an uncontrollable factor such as fall of EURO over US Dollar. The graph below shows a 5 year USD/EURO chart which
provides the fact that each USD was worth 0.733 EURO on 1st July 2014 (beginning of FY2014-15) which moved up to each
USD at 0.9128 EURO as on 25th May 2015, resulting in depreciation of EURO by 25% during the last one year. Since
over 60% of the total export is destined to Europe the growth itself was a miracle as theoretically the probability of de-growth
Average BID rate for the week of Monday, May 25, 2015 to Sunday, May 31, 2015 @ +/- 0%
USD/EUR
0.9128
0.9500
0.9000
0.8500
0.8000
0.7500
0.7000
0.6500
Jan 1, 2011 Jan 1, 2012 Jan 1, 2013 Jan 1, 2014 Jan 1, 2015
19
was higher. Also during the last two decade the largest growth in export basket (+41%) was witnessed in FY 2011 before one
of the weakest growth in 2010, with both the events marking a stark relationship to our above theory. Still we believe further
analysis is required to address this issue before heading to conclusions.
Ready-made garment exports which accounts for about 81.3% of total export earnings, grew by only 2.9% in the first 10
months of FY2015, significantly down from 17% growth in the first 10 months of FY2014. Among the other major export
drops during the period was from agriculture products (-6.5%), raw jute (-10.5%), frozen foods (-8.1%), tea (-15.0%),
Leather (-20.6%). Apart from RMG the other sectors that outshined last year figures were petroleum products (+17.2%), jute
goods (+9.6%), and engineering and electrical products by 32.2%. Given the current trend of exports receipts, attaining the
annual export target of USD 33.2 billion for FY2015 (10.0% higher than actual exports in FY2014) is infeasible. The worst
effected sectors because of EURO crash are Ready made garments, Home Textiles, Leather goods, and frozen food. Although
efforts are ongoing to promote exports, including increasing the size of the Export Development Fund, the weak EURO outlook
poses threats to export prospects especially under the recent strong appreciation of local currency in context of the neighboring
competitors. Other challenges, includes improving power supply, transport infrastructure, logistics including port facilities, and
urban services; and developing skills need to be addressed to enhance market access and boost exports.
%
50
40
30
20
10
0
FY2010 FY11 FY12 FY13 FY14 Jul-Jan Jul-Jan
FY14 FY14
Source: Export Promotion Bureau, 2015. Export Performance for the Month of
January 2015.
Import payments (recorded by customs) rose strongly by 12.2% to USD 33.1billion in July–March 2015 over the corresponding
period of 2014, with stronger imports of consumer goods (+19%) driven by higher imports on rice and wheat, and imports of
capital machinery (+21%) of which more importantly a very healthy (+34%) growth in textile and garment industry machinery
import was recorded indicating a revival in business activity. Though the graph below indicates significantly higher petroleum
(refined) import till December 2014, the overall petroleum and petro products import figure witnessed de-growth during the
period July-March 2015 due to de-growth in crude petroleum imports.
Earnings from remittance inflows increased by 7.1% to USD 12.56 billion during July–April FY2015 over the corresponding
period of FY2014 which totaled USD 11.73 billion. Remittance inflows from Top 5 countries for FY15 constitutes over 71% of
total inward remittance, and all but one posted growth signs for the first 10 months of the current fiscal. The growth in remittance
from top five countries and their respective market share are as follows: Saudi Arabia +6.1% (21.8%), UAE +5.7% (18.6%),
USA +0.4% (15.4%), Malaysia +29.8% (8.9%), and Kuwait -3.0% (7.1%).
20
Among others countries we view Qatar and Iran to have larger prospects on both remittance and export basket. However
attention is needed on both developments of workers’ skills and on the foreign policy side. Out-of-country jobs for Bangladeshi
workers rose by 11.3% during July–April FY2015 with the majority of the growth coming in the last half, indicating a likely
rise in remittance inflows in the upcoming fiscal. A total of 371,251 Bangladeshis found jobs outside the country during the
period, compared with 333,592 in the corresponding period of FY2014. Remittances are expected to remain healthy because of
resumed recruitment of Bangladeshi workers by Saudi Arabia and Qatar. However higher attention is required in out of country
employment to compensate the dimmer prospects in FDI (discussed later in the report).
Growth in Remittances
%
15 13.4 12.6
10.2
10 8.7
6.0
5
0
-1.6
-5
-10 -8.0
FY2010 FY11 FY12 FY13 FY14 Jul-Jan Jul-Jan
Fy14 Fy15
While net foreign direct investment (FDI), and net receipts of foreign aid inflows rose marginally. Net FDI was USD 754.3
million in July–December 2014, up from USD 666.1 million in the corresponding period of 2013. However political uncertainty,
land and infrastructure shortages, skills deficit, and a weak business climate gives a very dim picture on further progress in FDI
over the next few years. The government need to address unplanned urban sprawl and high population pressure long delays
and the high cost of property registration, weak land ownership data, the lack of automation in land records, and poor zoning
laws. Also automating the administration of the judicial system to expedite the enforcement of contracts, computerizing the trade
processing to speed cross-border trade, and addressing the inadequate and unreliable energy and power supply appear to be the
most binding constraints on the country’s competitiveness to attract FDI despite having a key geographical location. The cost
of power outages has been estimated to equal 0.5% of GDP while supply remains irregular and overly reliant on natural gas.
In addition Myanmar lately opening up its economy with a probable base of massive gas supply on-shore further downgrades
prospects of higher FDI in Bangladesh.
100
50
0
Chittagong Dhaka EPZ Mongla EPZ Comilla EPZ Uttara EPZ Ishwardi EPZ Adamjee EPZ Karnaphully
EPZ EPZ
The net receipt of foreign aid (loans and grants) inflows was USD 1.6 billion during July–March 2015, up from USD 1.3
billion in the same period of 2014. The trade deficit widened largely to USD 7.2 billion in July–March 2015, from USD 4.6
billion in July–March 2014, as the growth in export receipts was much slower than for import payments. Despite the higher
receipts from workers’ remittances, larger deficits in the trade, services, and primary income accounts compared with a year earlier
pushed the current account balance to a deficit of USD 1.2 billion in the first 9 months of FY2015, from a surplus of USD
1.7 billion, the year earlier.
3_
5-year moving average
2_
1_
0_
-1_
-2_
2010 2011 2012 2013 2014 2015 2016
Forecast
Bangladesh Bank’s gross foreign exchange reserves rose sharply to USD 24 billion (nearly 7 months of imports) at the end of
April 2015 from USD 20.4 billion a year earlier. Bangladesh Bank accumulated a large amount of foreign exchange through
purchases from commercial banks to prevent the taka from appreciating and eroding the country’s export competitiveness. Also,
the strong rise in remittance inflows contributed to the large reserve accumulation.
21000 5.5
19500
18000 5.0
16500
15000 4.5
Apr.14
May.14
Jun.14
July14
Aug.14
Sep.14
Nov.14
Dec.14
Jan.15
Feb.15
Mar.15
Apr.15
Oct.14
23
Given the limited information available as regards to private investment, a limited perception survey of knowledgeable informants
was carried out for this study, to get some insights as regards to investment situation in the country. Interviews were carried
out between March to May (2015) to understand assessment of entrepreneurs and businessmen regarding the current state of
investment, major determinants and possible future directions. 26 institutions was contacted and interviewed in various sectors
across Banks, NBFIs, Textiles, Power, Engineering, Airlines, Telecommunication, Pharmaceuticals, IT, Plastic, Construction,
and Consumer Good. About 36% of them have made new investment/service during FY2015. While some continue to have
uncertainty as regards to business environment, a high majority was very positive on the upcoming fiscal (FY2015-16). The share
of new investment is ranged between 12% to 34%, of the existing investment which indicate different level of prospect across
sectors. Incremental investment among the participants was mostly externally sourced. Responses regarding growth of production/
business was moderate in FY2015, with only 22% of the respondents mentioned about satisfactory rise in production/business,
while a massive 69% mentioned low to zero growth in production levels; the rest 9% of the respondents mentioned decline in
production. Interestingly when asked about the business outlook for the upcoming fiscal a massive 96% of the respondent was
highly positive with majority of the respondents expecting the thrust coming from the very first quarter (July-September) of FY
2015-16.
In the backdrop of political instability private investment was low to modest in FY2015. Leading institutions who took part in
the interview pointed out to lack of adequate supply of gas, electricity, dearth of skilled manpower and high rate of interest on
bank borrowing as bottlenecks. On a sectoral perspective slow progress in establishment of API park and high tariff for raw
materials in pharmaceutical industry, demand for an industrial park for engineering industry, poor ICT infrastructure, lack of
free and fair tender for the construction sector are hindering expected growth levels. The business community however praised
the government’s target to rise in electricity production to 24,000 MW, continuation of work on building digital Bangladesh,
completion of construction of the Padma Bridge, nuclear power plant, metro rail, deep-sea port and constructing a liquefied
natural gas (LNG) terminal.
Spread still remains high at almost 5% with high lending rates streaming from structural weakness in the financial system. Capital
inadequacy and high non-performing loan (NPL) stimulates interest in keeping the spreads high. Without alternative sources of
finance, such as the opportunity for equity finance through a developed capital market, banks will tend to lend at a high rate.
Though historically correlation between interest rate and investment was not significant as we keep growing high spreads in the
financial sector is one of the biggest hindrance that needs to be immediately addressed to achieve higher efficiency in the system.
The capacity of banking to finance large projects and to provide sufficient trade finance is limited. Discipline in the banking
system needs to be strengthened by effective competition, efficient management, high credit standards, and enhanced supervision
and corporate governance, especially in state-owned commercial banks. Progress has been made in strengthening prudential
24
regulations, enhancing central bank capacity, and allowing more competition through the entry of new private banks.
NPL in state-owned commercial banks are way above the private commercial banks and foreign banks leading to capital shortfalls
in the state owned banks. Bangladesh Bank’s flexible loan-rescheduling policy adopted in December 2013 worsened the situation.
Under the rule banks rescheduled BDT 186 billion, 36% of total classified loan until June 2014. Eight state and specialized
banks accounted for about half of the total rescheduled amount. SOBs large volume of loans (almost 40% of total loans) to state
owned enterprises (SOEs) has also contributed to high classified loans. The ratio of gross NPLs to total loans in the banking
system rose to 9.7% at the end of December 2014 from 8.9% at the end of December 2013. The gross NPL ratio for state-
owned commercial banks (SCBs) increased to 22.2% at the end of December 2014 from 19.8% at the end of December 2013,
the gross NPL ratio for private commercial banks rose to 5.0% from 4.5%, and for specialized banks to 32.8% from 26.8%.
The gross NPL ratio for foreign banks also increased to 7.3% from 5.5% during the same period. The net NPL ratios for all
banks rose to 2.7% at the end of December 2014 from 2.0% at the end of December 2013. The net NPL ratios for SCBs
and specialized banks remained higher than the sector average. Although the regulatory capital position of banking improved in
general, in terms of the risk-weighted capital–asset ratio, SCBs are short (by 1.3%) of meeting the regulatory requirement of
10.0%, while specialized banks had a larger shortfall.
The banking sector’s net profit dropped around 17% Y-O-Y in 2014 to BDT 60 billion on the back of mounting bad loans
which necessitated large provisioning. Operational profit however was BDT 213 billion, of which BDT 90billion was deducted
as tax and another BDT 62 billion was provisioned against bad loans, according to central bank statistics. Of the 56 scheduled
banks, UK-based Standard Chartered Bank recorded the highest profits last year with operating profit of BDT 17billion and net
profit of BDT 11 billion. The 48 private banks altogether clocked in operating profits of BDT 149 billion, of which BDT 64
billion was taken off as tax while BDT 29billion was for provisioning resulting in net profit of BDT 57billion. On the market
share side PCBs control the largest stake with over 66%, followed by 18% on SOBs, while the rest is almost equally divided
amongst FCBs and Specialized Banks.
(Tk. in crore)
Banks/NBFIs
Types of State Owned Non-Bank Fin.
Private Banks Foreign Banks Spcialised banks Total
Loans Banks Ins.
Quarter Ending
Total Loans 84039.84 315328.57 23853.26 31213.60 31449.30 485884.57
December, 2013 SME Loans 15445.43 85333.22 2265.08 9269.20 357194 115884.87
(18.38) (27.06) (9.50) (29.70) (11.36) (23.85)
Total Loans 85026.41 321208.64 23069.07 31454.54 32547.88 493306.54
March, 2014 SME Loans 15401.65 83873.33 2061.31 9435.39 3811.82 114583.50
(18.11) (26.11) (8.94) (30.00) (11.71) (23.23)
Total Loans 84885.27 336184.11 22999.33 33368.21 33870.38 511307.30
June, 2014 SME Loans 15697.79 88863.76 2070.17 9810.41 4064.89 120507.02
(18.49) (26.43) (9.00) (29.40) (12.00) (23.57)
Total Loans 86946.01 349968.23 23378.29 33461.24 35653.91 529407.68
September, 2014 SME Loans 16576.43 92906.81 1904.64 9905.67 4321.22 125614.77
(19.07) (26.55) (8.15) (29.60) (12.12) (23.73)
Total Loans 102392.55 369934.52 23384.70 22125.69 36797.80 554635.26
December SME Loans 27215.48 101978.15 1814.57 760.27 4380.03 136148.50
(26.58) (27.57) (7.76) (3.44) (11.90) (24.55)
% changes of SME loans at the
76.20 19.51 -19.89 -91.80 22.62 17.49
end of Dec, 2014 over Dec, 2013
Source: SME & Special Programmes Department, Note: Figures in brackets indicate SME loans as percentage of total loans.
Bangladesh Shop Owners’ Association (BSOA) that represents 2.5 million retailers in the country said their average sales
dropped to around BDT 9 billion from BDT 30 billion a day. On the ground retailers mentioned consumers mostly buying
essentials especially perishable commodities while the sales of relatively nonessential items such as personal, home care and
lifestyle products have slumped severely. Attacks on goods-carrying vehicles have severely disrupted the supply chain and affected
almost all major sectors and stakeholders. Wholesale and retail trade accounts for 14% of the country’s GDP. The sector grows
by more than 6 percent a year. With falling sales, shop owners and retailers struggle to bear operational costs, including space
rent and utility bills, which amount to around BDT 1.5 billion a day, according to the association. The association collectively
employs 7.5 million people, according to BSOA. The three month blockade on Q3 FY2015 have badly hit farm incomes,
disrupted inter-district road and rail transport, weakened buyers’ confidence on the exporters’ ability to deliver on time and halted
the rebuilding of investor and consumer confidence. According to a study by a leading chamber FBCCI the nation counts about
BDT 20 billion in economic losses a day, due to the blockade and strikes.
The economic affairs committee of the cabinet very recently approved the Bibiyana phase three 450-megawatt power project that
remained stalled for the last two years due to problems with its lead bidder. The committee also approved Petrobangla’s signing
of production sharing contracts (PSCs) with a US-Norwegian joint venture for oil and gas exploration in three deep sea blocks.
The 450MW gas-fired Bibiyana 3 power project, which would approximately cost USD 342 million, was supposed to come
into full operation from mid-2015 and provide cheap power to the national grid.
26
US company ConocoPhillips and Norwegian Statoil had jointly proposed to explore deep sea blocks number 12, 16 and 21 in
the off-shore block bidding round floated in 2012. The joint venture had proposed to conduct line seismic survey of between 775
kilometres to 872km and drill at least one exploration well in the first five years of the contract period. Signing of new PSCs
with Statoil and ConocoPhillips would bring back activities to the Bay of Bengal from next winter when the Bay is calm and
favourable. Of these three blocks, block 12 and 21 had structural similarity with Myanmar’s offshore Shew gas field that has
proven 9 trillion cubic feet gas reserve. Both ConocoPhillips and Statoil stated that these two blocks have lesser exploration risk.
Nearly half of the internet users who access internet through laptops, tablets and desktops say they would transition to the 3G
technology by June this year, while 44% in the segment did not know the advantages of using it. There are 43.42 million internet
users in Bangladesh which is just a little over a third of the total mobile subscribers, according to Bangladesh Telecommunication
Regulatory Commission.
Mobile internet users took the largest share with 41.96 million subscribers, while the rest accessed internet through WiMAX,
internet service providers and public switched telephone network (PSTN). At the end of last year, 35% mobile internet users
were smartphone-based, with the potential to go up to 55% by the first half of 2015, the Ericsson report said. Also the 14%
mobile internet users based on laptops, tablets and desktops could increase to 41% by the middle of the year, according to the
survey.
The survey found that 30% subscribers are using internet through smartphones, while 3% are using tablets. Operator-wise,
Airtel tops the chart of subscribers using smartphones and tablets. 41% subscribers of the fourth-ranked operator are using
smartphones while 5% use tablets. Robi, third in the market otherwise, came in second position with 33% of its subscribers
using smartphones and 2% using tablets. About 30% subscribers of Grameenphone are using smartphones, the market leader
and the only listed mobile service provider of the country, while 3% are using tablets. However at 57%, Grameenphone has
the highest number of subscribers using internet through smartphones, while 45% of Airtel subscribers, and 34% of Robi
subscribers use internet through smartphones.
The global pharma market stands at USD 1.3 trillion, of which 25% is accounted for by biological medicines. A number of
local companies are developing biological medicines at the moment. For instance, Incepta Pharma has invested around BDT 2
billion so far to develop biological medicines, according to company data.
Pharmaceutical sales in the domestic market rose 10.8% year-on-year to BDT 113 billion last year (BDT 102 billion in 2013)
on the back of increased medical coverage of the population and easy access to health care services. The medical coverage of
people is increasing in both urban and rural areas, through rise in the number of hospitals and clinics mostly in the private sector.
27
Local companies now produce high quality medicines and meet over 98% of the local demand.
Garment exports to new destinations are increasing substantially though shipments to traditional markets have been on a
downward curve. Apparel exports to new destinations except the EU, the US and Canada, rose over 15% year-on-year to
USD 1.87 billion in the first six months (July-December) of the current fiscal year, according to Export Promotion Bureau.
The major new export destinations are Australia, Brazil, Chile, China, India, Japan, South Korea, Mexico, Russia, South Africa
and Turkey. Generally, Bangladesh’s 60% garment items are destined to the EU, 23% to the US, 6% to Canada and the
rest to other countries.
Not only in regional breakdown the RMG sector of the country has also become a hub for technical and non-traditional garment
products such as military uniforms, travel bags, backpacks, sleeping bags, tents, ski-jackets, jute slippers and other jute goods.
Also the country is quickly becoming a major source of denim products. Currently, 30 denim factories are in operations in
Bangladesh. Among the global players in the USD 60 billion denim market, Bangladesh lags behind China, USA, Italy and
some Latin American countries. The country’s share in the global denim market currently stands at about USD 1 billion. Local
denim factories produce around 20 million yards of the fabric a month, meeting half of the local consumption. The rest is
imported. Total investment in the sub-sector stands at BDT 65 billion. Currently, Bangladesh is the third largest denim exporter
to the US after Mexico and China with an 11.3 percent market share, according to the US Department of Commerce while it
is estimated that the country annually exports denim products worth more than USD 500 million to Europe.
Realtors find it challenging to build low-cost apartments in the capital due to an abnormal rise in prices of land despite drop
in prices of construction materials. Prices of apartments were slashed over 15% on average by the realtors to reinvigorate the
depressed property market. Another member of the association mentioned on working on economies of scale to cut apartment
prices, adding that his company has decided not to undertake any further small projects at the moment.
The capital city Dhaka accommodates over 600,000 people per year meaning more than 120,000 household units are required
to house the added population in Dhaka. Currently the supply of housing in the city is only around 25,000 units, of which
28
15,000 are catered by private sector players like real estate development companies. REHAB has now around 1,200 members
that build, on average, 15,000 units of apartment annually with the top 20 company holding almost 80% of the market share.
The sector now contributes around 7 percent to the country’s gross domestic product, employing around hundred thousand skilled
people and another 3.5 million in linkage industries, according to industry people. The number of new projects undertaken by
developers has declined by around 35% over the last one year, according to the association.
6. CAPITAL MARKET
Dhaka Stock Exchange Market Capitalization
and Broad Index
Market capitalization DSE broad index
Tk billion Index
4000 6000
3500 5000
3000
4000
2500
2000 3000
1500 2000
1000
1000
500
0 0
Jan Apr Jul Oct Jan Apr Jul Oct
2013 2014
The major stock market indicators improved as ongoing reform programs enriched market discipline and monitoring. As a result,
investors also injected more money into securities. The Dhaka Stock Exchange (DSE) broad index grew by 14.0% in December
2014 over December 2013, reaching 4,865.0 points. The market price–earnings ratio rose to 17.8 in December 2014 from
15.1 in December 2013, reflecting some price recovery in the market. In addition, a total of 17 new companies were listed on
the DSE in 2014. DSE market capitalization rose by 23.1% in December 2014 over December 2013. Net foreign portfolio
investment rose to USD 445.0 million in July–December 2014 from USD 273.0 million in July–December 2013.
The Dhaka Stock Exchange (DSE) broad index decreased by -10.32% in April 2015 over December 2014, reaching
4047.28611 points. The market price–earnings ratio dropped to 14.42 in April 2015 from 17.77 in December 2014. In
addition, a total of 6 new companies were listed on the DSE up to April 2015. DSE market capitalization shrank -8.8% in
April 2015 over December 2014. Net foreign portfolio investment interestingly maintained growth in the first four month of 2015
totaling USD 288 million marking over 40% of July 2014–April 2015 of USD 704 million. The recent increase in foreign
portfolio investment and increasing numbers of initial public offerings, with anticipation of lower corporate tax rates in upcoming
budget helped the market grow in May 2015. In May 2015 (single month basis) the market capitalization grew over 10% to
USD 41.3 billion from USD 38.1 billion at the end of April 2015.
Reforms such as the demutualization of stock exchanges, and enhanced surveillance of brokerage houses and merchant banks to
improve market discipline and strengthen market monitoring helped increase investor confidence. Due to lower deposit interest
rates in banks, investors are looking for higher returns from stock investment. Market confidence will need to be restored through
enhancing supply and demand for equities, upgrading accounting and auditing requirements to international standards to supervise
companies’ internal controls, and accounting policies.
29
BANK
52
NAME NET PROFIT YOY P/E
WEEKS
2012 2013 2014 2012-13 2013-14 LOW HIGH
ABBANK 1,467 1,094 1,496 -25% 37% 6.08 17.5 32.9
ALARABANK 1,694 2,050 2,083 21% 2% 16.75 10.8 18.0
BANKASIA 850 1,331 1,880 57% 41% 10.28 12.7 23.9
BRACBANK 672 1,419 2,220 111% 56% 15.56 21.4 40.5
CITYBANK 795 490 2,219 -38% 353% 7.42 15.0 24.0
DHAKABANK 789 1,982 2,098 151% 6% 11.01 13.1 22.2
DUTCHBANGL 2,314 2,001 2,206 -14% 10% 9.20 64.6 111.0
EBL 2,393 2,535 2,139 6% -16% 6.83 23.8 31.6
EXIMBANK 2,083 1,886 2,465 -9% 31% 10.22 8.7 12.5
FIRSTSBANK 762 773 975 1% 26% 11.71 8.0 14.1
ICBIBANK -1,061 -681 286.53 -36% -142% N/A 3.8 6.3
IFIC 417 1,371 2,061.11 229% 50% 6.63 17.0 29.6
ISLAMIBANK 5,617 5,055 3,961 -10% -22% 16.9 15.2 29.9
JAMUNABANK 1,110 1,145 1,352.74 3% 18% 42.92 9.7 14.4
MERCANBANK 1,368 1,975 1,175 44% -41% 64.38 10.3 19.1
MTB 328 573 1,152 75% 101% 6.25 13.0 21.4
NBL 1,431 2,086 1,328 46% -36% 12.28 8.9 13.6
NCCBANK 1,450 1,142 1,493 -21% 31% 8.71 8.6 13.2
ONEBANKLTD 1,120 1,277 1,841 14% 44% 9.44 10.7 16.3
PREMIERBAN 603 786 874 30% 11% 5.92 7.8 11.8
PRIMEBANK 2,700 2,038 2,244 -25% 10% 5.46 14.1 24.9
PUBALIBANK 1,609 2,432 3,117 51% 28% 23.25 18.7 31.6
RUPALIBANK 1,216 452 491 -63% 9% 7.77 36.0 72.5
SHAHJABANK 1,744 1,306 749 -25% -43% 10.90 9.1 14.1
SIBL 1,465 1,252 1,927 -15% 54% 6.44 11.0 16.2
SOUTHEASTB 1,649 3,376 3,833 105% 14% 5.06 15.1 21.6
STANDBANKL 1,331 1,011 1,213.40 -24% 20% 10.87 8.8 15.5
TRUSTBANK 183 322 1,298.07 76% 303% 4.79 12.0 20.8
UCBL 1,585 3,069 4,407 94% 44% 6.27 18.0 32.5
UTTARABANK 1,244 1,319 1,404.25 6% 6% 7.7 16.5 30.6
30
CEMENT
NAME SALES (USDmn) MARKET CAP ( USD mn) P/E P/S NPM
ENGINEERING
ENGINEERING SALES (USDmn) MARKET CAP ( USD mn) P/E P/S NPM
FUEL&POWER
Fuel and Power SALES (USDmn) MARKET CAP ( USD mn) P/E P/S NPM
IT SECTOR
IT SECTOR SALES (USDmn) MARKET CAP ( USD mn) P/E P/S NPM
PHARMACEUTICAL
PHARMACEUTICALS &
SALES (USDmn) MARKET CAP ( USD mn) P/E P/S NPM
CHAMICALS
ACI 352.57 214.6545973 53.38 0.61 0.011
ACIFORMULA 40.75 123.8653846 31.57 3.04 0.097
TANNERY INDUSTRIES
TANNERY INDUSTRIES SALES (USDmn) MARKET CAP ( USD mn) P/E P/S NPM
TELECOMMUNICATION
TELECOMMUNICATION SALES (USDmn) MARKET CAP ( USD mn) P/E P/S NPM
TEXTILE
TEXTILE SALES (USDmn) MARKET CAP ( USD mn) P/E P/S NPM
AL-HAJTEX 2.61 14.80 70.84 5.66 0.080
ALLTEX 22.27 16.38 12.78 0.74 0.058
ANLIMAYARN 2.86 4.01 21.17 1.40 0.066
APEXSPINN 36.27 7.39 30.09 0.20 0.007
AGRONDENIM 33.87 33.88 12.31 1.00 0.081
CMCKAMAL 9.73 17.98 11.64 1.85 0.161
CNATEX 36.38 47.57 7.74 1.31 0.169
DACCADYE 8.74 12.29 14.40 1.41 0.097
DELTASPINN 17.79 18.87 18.24 1.06 0.051
DSHGARME 5.32 3.00 47.39 0.56 0.012
DULAMIACOT 3.01 0.71 N/A 0.24 -0.101
ENVOYTEX 69.78 89.12 9.84 1.28 0.130
FAMILYTEX 39.79 56.34 4.86 1.42 0.291
FEKDIL 33.46 41.40 9.17 1.24 0.134
GENNEXT 33.71 48.51 5.63 1.44 0.189
HFL 22.96 28.02 12.43 1.22 0.119
HRTEX 13.78 6.65 23.84 0.48 0.020
HWAWELLTEX 17.68 23.33 14.01 1.32 0.094
MAKSONSPIN 23.45 26.76 27.06 1.14 0.043
MALEKSPIN 102.31 40.95 9.98 0.40 0.040
MATINSPINN 26.67 51.37 9.98 1.93 0.193
METROSPIN 10.15 7.52 27.98 0.74 0.026
MHSML 16.88 39.15 14.03 2.32 0.165
MITHUNKNIT 10.44 21.90 20.35 2.10 0.103
MODERNDYE 0.12 1.18 88.68 9.59 0.108
PRIMETEX 22.48 7.44 15.41 0.33 0.021
PTL 37.89 26.71 10.48 0.70 0.067
RAHIMTEXT 7.85 9.84 22.89 1.25 0.055
RNSPIN 22.73 61.00 43.64 2.68 0.306
SAFKOSPINN 4.46 5.76 28.44 1.29 0.088
SAIHAMCOT 35.08 30.52 12.34 0.87 0.070
SAIHAMTEX 25.75 19.33 11.08 0.75 0.068
SHASHADNIM 59.84 50.67 7.63 0.85 0.100
SONARGAON 9.93 2.71 N/A 0.27 -0.079
SQUARETEXT 100.91 156.58 15.07 1.55 0.309
STYLECRAFT 55.23 5.82 18.56 0.11 0.006
TALLUSPIN 16.92 15.51 69.84 0.92 -0.014
TUNGHAI 12.23 23.84 21.10 1.95 0.094
ZAHEENSPIN 13.61 18.11 12.39 1.33 0.081
ZAHINTEX 20.12 11.56 10.49 0.57 0.055
39
Developed By
Mohammad Reza
Head of Research & Investment
+88 02 01755506084
reza@citybrokerageltd.com
Disclaimer
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faith, but no representation or warranty, express or implied, is made as to their accuracy, completeness or correctness. All opinions and estimates contained
in the document constitute the departments judgment as of the date of this document and are subject to change without notice and are provided in good
faith but without legal responsibility.
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place undue relevance on these forward looking statements. CBL expressly disclaims any obligation to update or revise any such forward looking statements
to reflect new information, events or circumstances after the date of this publication or to reflect the occurrence of unanticipated events.
Exchange rate fluctuations may affect the return to investors. Neither the company or any of its affiliates, nor any other person, accepts any liability whatsoever
for any direct or consequential loss arising from any use of this report or the information contained therein. City Brokerage Limited, their
respective affiliate companies, associates, directors and/or employees may have investments in securities or derivatives of securities of companies mentioned in
this report, and may make investment decisions that are inconsistent with the views expressed in this report. Neither the company or any of its affiliates, nor
any other person, accepts any liability whatsoever for any direct or consequential loss arising from any use of this report or the information contained therein.