The central bank has raised the ceiling of foreign currency for Bangladesh nationals allowing them to spend more while travelling abroad.
The Bangladesh Bank (BB) issued a circular in this regard yesterday.
In case of travelling to the Saarc countries and Myanmar, the limit on taking foreign currency has been fixed at $1,500. Earlier the ceiling was $1,000 for travelling by air and $500 by road.
For other countries, a Bangladeshi traveller now can take $5,000, which was $3,000 earlier.
BB officials said the move has been taken as the foreign exchange reserve has crossed a satisfactory $10 billion mark.
The central bank in another circular said it would pay 10 percent of the losses incurred by banks for disbursing farm loans at lower interest rates.
The BB will pay the amount within one month of disbursement, while the rest amount will be paid after necessary review.
>> The Daily Star, December 09,2009
December 10, 2009
December 09, 2009
HSBC launches first taka-dollar derivative in Bangladesh
HSBC has launched the first taka-dollar option in Bangladesh to help customers manage the risks of future foreign exchange in a volatile market.
The foreign bank has already transacted two US dollar-taka options for Viyellatex, one of the largest garment exporters, and Coats Bangladesh, a leading supplier of yarn and raw materials.
This derivative helps exporters and importers hedge their forex exposures effectively, Tarique I Khan, head of global markets of HSBC, Bangladesh, told reporters at the launch of the product at Dhaka Sheraton Hotel yesterday.
Futures, swaps, forwards and options are examples of a derivative, a financial arrangement that has its value determined on the price of an asset or rate.
“In some cases, an option is better than a forward deal," Khan said.
An option deal is a future agreement where the seller (bank) is obliged for a certain period, but the buyer or customer has an option, not an obligation. In a forward deal, both the buyer and the seller are obliged.
There is a range of prices of the taka against the dollar quoted in the two option deals, HSBC declined to disclose the prices.
“If the dollar moves beyond the rate a customer has hedged, he can exercise his right. If the rate moves in favour of the underlying forex exposure, the customer can only benefit up to a certain level,” he said.
Khan cited an example saying that if a customer is an exporter, he is vulnerable to the depreciation of the dollar against the taka. So an exporter will want to protect him from a falling USD/BDT rate, but is likely to benefit from appreciation.
Similarly, a bank quotes a lower rate accepted by a customer in an option deal, Khan said.
An importer who is to buy in future will also face the risks of a rising dollar, but will benefit from depreciation.
Earlier, HSBC had launched some non-BDT forward deals, such as USD/JPY, EUR/USD and some commodity hedges (cotton and wheat).
“So it is not difficult for us to offer these products after the local regulation allows it,” Khan said.
Customers also sounded upbeat about the benefits of the new product.
“We think the option will be helpful for us,” said Rahmotullah Khondoker, chief financial officer of Viyellatex that exported over $100 million worth of garment products last year.
Bishnu Pada Saha, management accounting manager of Coats Bangladesh that imports on an average $2-3 million worth of goods, echoed him.
“We expect this trade will create a positive impression among potential foreign investors,” said Mohammad Wahiduzzaman, head of corporate sales, global markets of HSBC, Bangladesh.
>> The Daily Star, December 09, 2009
The foreign bank has already transacted two US dollar-taka options for Viyellatex, one of the largest garment exporters, and Coats Bangladesh, a leading supplier of yarn and raw materials.
This derivative helps exporters and importers hedge their forex exposures effectively, Tarique I Khan, head of global markets of HSBC, Bangladesh, told reporters at the launch of the product at Dhaka Sheraton Hotel yesterday.
Futures, swaps, forwards and options are examples of a derivative, a financial arrangement that has its value determined on the price of an asset or rate.
“In some cases, an option is better than a forward deal," Khan said.
An option deal is a future agreement where the seller (bank) is obliged for a certain period, but the buyer or customer has an option, not an obligation. In a forward deal, both the buyer and the seller are obliged.
There is a range of prices of the taka against the dollar quoted in the two option deals, HSBC declined to disclose the prices.
“If the dollar moves beyond the rate a customer has hedged, he can exercise his right. If the rate moves in favour of the underlying forex exposure, the customer can only benefit up to a certain level,” he said.
Khan cited an example saying that if a customer is an exporter, he is vulnerable to the depreciation of the dollar against the taka. So an exporter will want to protect him from a falling USD/BDT rate, but is likely to benefit from appreciation.
Similarly, a bank quotes a lower rate accepted by a customer in an option deal, Khan said.
An importer who is to buy in future will also face the risks of a rising dollar, but will benefit from depreciation.
Earlier, HSBC had launched some non-BDT forward deals, such as USD/JPY, EUR/USD and some commodity hedges (cotton and wheat).
“So it is not difficult for us to offer these products after the local regulation allows it,” Khan said.
Customers also sounded upbeat about the benefits of the new product.
“We think the option will be helpful for us,” said Rahmotullah Khondoker, chief financial officer of Viyellatex that exported over $100 million worth of garment products last year.
Bishnu Pada Saha, management accounting manager of Coats Bangladesh that imports on an average $2-3 million worth of goods, echoed him.
“We expect this trade will create a positive impression among potential foreign investors,” said Mohammad Wahiduzzaman, head of corporate sales, global markets of HSBC, Bangladesh.
>> The Daily Star, December 09, 2009
Bangladesh Development Bank starts Journey from January 3, 2010
Bangladesh Development Bank Ltd (BDBL), which was shaped up by a merger between Bangladesh Shilpa Bank and Bangladesh Shilpa Rin Sangstha, will start its full-fledged operations across the country from January 3.
The maiden board meeting of the BDBL approved yesterday the merger and took the decision on starting operations.
The authorised capital of the new bank is Tk 1,000 crore, while its paid-up capital is Tk 400 crore, a BDBL statement said.
Before the start of the banking operations, a vendor agreement will be signed between the government and the BDBL as a legal compliance.
For long, both the Bangladesh Shilpa Bank and Bangladesh Shilpa Rin Sangstha had been facing crisis in their respective operations as a huge amount of loans disbursed by them remained unrealised.
At one stage, the government was thinking about privatising the two enterprises. But the Awami League government turned the duo into a new bank through the merger.
However, it is not known yet whether the BDBL will operate as a commercial bank or a specialised one.
BDBL Chairman Nazem Ahmed Chowdhury presided over the first board meeting, attended by directors Shanti Narayan Ghosh, Dewan Nazrul Islam, Niaz Rahman, Amalendu Mukharjee, Humayun Kabir, Khalilur Rahman Siddiqui, Ishak Bhuiyan, Salima Ahmed and Managing Director Mizanur Rahman.
The chairman of the bank said the government recently formed the BDBL through the merger of the two entities to promote the country's industrial sector.
>> The Daily Star, December 09, 2009
The maiden board meeting of the BDBL approved yesterday the merger and took the decision on starting operations.
The authorised capital of the new bank is Tk 1,000 crore, while its paid-up capital is Tk 400 crore, a BDBL statement said.
Before the start of the banking operations, a vendor agreement will be signed between the government and the BDBL as a legal compliance.
For long, both the Bangladesh Shilpa Bank and Bangladesh Shilpa Rin Sangstha had been facing crisis in their respective operations as a huge amount of loans disbursed by them remained unrealised.
At one stage, the government was thinking about privatising the two enterprises. But the Awami League government turned the duo into a new bank through the merger.
However, it is not known yet whether the BDBL will operate as a commercial bank or a specialised one.
BDBL Chairman Nazem Ahmed Chowdhury presided over the first board meeting, attended by directors Shanti Narayan Ghosh, Dewan Nazrul Islam, Niaz Rahman, Amalendu Mukharjee, Humayun Kabir, Khalilur Rahman Siddiqui, Ishak Bhuiyan, Salima Ahmed and Managing Director Mizanur Rahman.
The chairman of the bank said the government recently formed the BDBL through the merger of the two entities to promote the country's industrial sector.
>> The Daily Star, December 09, 2009
December 06, 2009
GP emerges as new market mover
Grameenphone (GP) has been the new market mover since its November 16 debut on bourses.
The first and lone listed telecom company can impact the market capitalisation if its share price goes up or down, the price indices are set in line with this.
Before GP stepped in, banking, fuel and power sectors besides non-bank financial institutions had been on the forefront.
On November 24, GP alone led the market to finish in the black offsetting the fall in banking sector, considered a prime mover. On the day, shares of the mobile operator advanced 3.74 percent or 90 points, which was enough to cover a 2.54 percent fall in the banking sector.
Market observers point to the company's capital and share base for being a market mover. It joined the stock market as the largest-ever issue having 135 crore ordinary shares of Tk 10 each.
The company, however, floated 13 crore shares to general public and institutions before joining the market. For the public the offer price was Tk 70, including Tk 60 as premium, while the price was Tk 74 for institutions, including Tk 64 as premium.
“Entry of GP was a milestone for Bangladesh capital market. And the company as telecom sector accounts for a huge portion of the total market capitalisation, which many other sectors with a number of companies do not,” Arif Khan, deputy managing director of IDLC Finance, told The Daily Star.
He also pointed out: “If GP share prices fall or up by Tk 1 on a single trading day, the indices will decline or increase by 4 points.”
He however said it does not send any bad signal for the market. “Rather inclusion of a largest corporate body like GP will have a positive impact. It will encourage other big companies to be listed on the market.”
As of last Thursday, GP's market capitalisation was Tk 23,441.21 crore, or 12.5 percent of the total market capitalisation of Tk 1,86,488.19 crore. The banking sector's market capitalisation was Tk 40,640.57 crore, or around 22 percent of the total market capitalisation.
Norway's telecom giant Telenor owns GP's 55.80 percent stakes, while local Grameen Telecom owns 34.20 percent and the rest 10 percent is held by general public and institutions.
GP is the most profitable mobile phone operator in the country, with its revenue expecting to hit billion dollars mark by the year-end.
>> Source: The Daily Star, December 6, 2009
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