SwissPro | Frankfurt, 28.02.2016.
Sales of savings instruments soar
Sales of savings instruments rose 18.86% year-on-year in the first six months of the fiscal year due to higher interest rates than banks and a dull stock market. The government sold BDT 23,024 crore of savings instruments between July and December. Although seven months have passed in the fiscal year, the government is yet to borrow any fund from the banking system, which is the cost-effective option.
From July 1 to January 26, the government repaid Tk 9,477 crore in loans. In the same period last year, it borrowed Tk 2,899 crore, according to central bank statistics. As the investment demand was low, there was pressure on banks to cut the lending rates, so all lenders obliged. The average deposit rate in December stood at 6.34 percent — down about 1 percentage point in a year — which is close to the current inflation rate.
Outflow of skilled manpower marks rise by 44% last year
The outflow of skilled manpower has marked a rise by 44 per cent in the last calendar year due to joint efforts from the government and private sector, helping the country in receiving an increased volume of remittance. The number of professionals and semi-skilled outbound workers has also increased in the last year. Some 214,328 skilled workers travelled abroad for jobs in 2015 while the figure was 148,766 in 2014. Unskilled workers are still taking the major share of the country’s outbound job sector. Some 243,929 less-skilled workers got employment in different destination countries in the last calendar year.
Wealth tax collection registers 22% growth
Payment of wealth tax registered a 22% growth in the last fiscal year over the previous mark, belying a common belief that the number of wealthy people is on a rather faster rise in the country. Some 10,931 well-off people put their wealth above board and paid the tax, known as wealth surcharge, worth Tk 2.54 billion in FY 2014-15. In FY 2013-14, the NBR received Tk 2.08 billion in wealth tax from 10,152 people. An individual taxpayer having net asset above Tk 22.5 million is required to pay 10% surcharge on their wealth. In the current budget for FY 2015-16 the government has slapped a minimum amount of surcharge worth Tk 3,000 for the well-off section of people.
NPL rise in 2015 despite loan restructuring, reschuling
The amount of non-performing loans (NPLs) increased by 2.42% in the last calendar year despite rescheduling and large loan restructuring by the central bank to tackle the problem. The volume of NPLs rose to Tk 513.71 billion as on December 31 from Tk 501.66 billion a year before. However, stronger recovery drives by the banks and the rescheduling of loans pushed the volume of non-performing loans in the banking system onto a downslide towards the year end. The official statistics of the NPLs in the fourth quarter (Q4) from October to December 2015 showed the amount having dropped by over 6.0 per cent to Tk 513.71 billion. The climb-down in the last quarter of the last calendar year was from Tk 547.08 billion in the preceding quarter. It was Tk 525.19 billion in Q2. The share of NPLs also came down to 8.79% during the period under review from 9.89 per cent three months back. It was 9.67% in the Q2 of the past year.
2G, 3G spectrum auction: base price at USD 25m
The finance ministry has approved the telecom regulator’s proposal to set the base price at $25 million for the auction of the remaining spectrum of 2G and 3G bands. The Bangladesh Telecommunication Regulatory Commission was set to hold the auction of 2G (1800MHz) and 3G (2100MHz) spectrum in April last year but failed to do so because of lack of participation of mobile phone operators and delay in government approval in the amendment to the auction guidelines. The proposed merger of two telecom operators, Robi and Airtel, and the possibility of the government allowing technology neutrality would change the spectrum demand for the market.
Have a successful start to the week and best regards
Christian Forthuber
Managing Director SwissPro Invest (BD) Ltd.
Walther-von-Cronberg-Platz 13
60594 Frankfurt, Germany
Direct: +49 69 380 97 52 97
cforthuber@swissproinvest.com
www.frontier-markets-asia.com
