Stocks
BB Seeks Development of Bond Market
Governor Abdur Rouf Talukder has expressed the desire to develop the bond market in Bangladesh’s stock market. He made this announcement during the Monetary Policy Announcement Ceremony for the first half of the fiscal year 2023-24, held on Sunday, June 18, 2023.
Governor Talukder stated that there are two components in our capital market: the equity market and the bond market. We have been discussing the equity market extensively, but now we want to focus on developing the bond market with the help of the central bank. Under the new banking company law, we have separated the bond market so that banks can invest more in this sector.
He further mentioned that the recent monetary policy aims to reduce the demand for money by increasing the policy rate. The cap on the interest rate for loans, which was previously at 9%, has also been lifted.
Abdur Rouf Talukder has stated that currently, there are four types of inflation-targeting monetary policies being practiced globally. These include interest rate targeting, price level targeting, monetary supply targeting, and exchange rate targeting. The Bangladesh Bank has been adopting the “price level targeting” monetary policy for some time now. However, a new monetary policy called “interest rate targeting” has now been announced, signifying a framework shift.
The new interest rate arrangement is referred to as a “smart” or short-term moving average rate. It will have a capped corridor of 3% above the average interest rate on the government treasury bills with a maturity of 182 days, which spans over six months. Currently, the average interest rate on treasury bills remains below 7%. This means that customers can expect a reduction in loan interest rates by approximately 10 decimal points, or around 10%.
In the new monetary policy, the policy rate has been revised upwards by 50 basis points, resulting in an increase of 6.5% points. This means that commercial banks will have to pay additional interest when borrowing funds from the central bank in times of urgency.
Simultaneously, the reverse repo rate has been increased from 25 basis points to 50 basis points. This implies that banks will now receive higher interest rates when depositing money with the central bank compared to the previous rate of 25%.
Furthermore, changes have been introduced in the policy rates and commercial bank rates. The special repo rate will now be referred to as the Standard Lending Facility (SLF), while the policy rate and reverse repo rate will be known as the Standard Deposit Facility (SDF).
In addition, it has been announced that banks will no longer sell dollars at the discount rate as part of the new monetary policy.
The adoption of monetary policy by the central bank aims to maintain the balance between inflation control and desired economic growth. Monetary policy plays a crucial role in managing the country’s economy. It is a means to control domestic borrowing, money supply, internal assets, and foreign assets, determining to what extent they increase or decrease.
The government has set a target of 6% inflation and 7% GDP growth in the upcoming fiscal year. However, the Bangladesh Bank has emphasized controlling inflation over achieving growth targets.
Officials from the Bangladesh Bank, including Deputy Governor Ahmed Jamal, Kazi Sayedur Rahman, Abu Farah Md Nasser, A.K.M. Sajedur Rahman Khan, Masud Biswas, Chief Economist Dr. Habibur Rahman, Executive Director and Spokesperson Abu Syed Al Mahmudul Islam, along with other relevant officials from the research department, attended the program.
One of the Listed companies, National Polymer Limited has recommended 10.50% Cash Dividend for the year ended June 30, 2024.
It has reported Consolidated EPS of Tk 2.27 paisa, and Consolidated NAV per share of Tk 30.63 for the year ended March 31, 2024.
The Annual General Meeting (AGM) of the company will be held on December 18, through the digital platform. The record date for this has been fixed at October 22.
The Company also discloses its financial reports for the second quarter, (April – June 24).
As per the company’s consolidated life revenue account for April to June 2024, the excess of total income over total expenses, including claims (surplus), stood at Tk 1,394.24 million. This marks a significant increase from the surplus of Tk 823.68 million during the same period in 2023.
For the first half of 2024, from January to June, the company reported a surplus of Tk 2,177.57 million, compared to Tk 1,290.39 million in the corresponding period of the previous year.
Additionally, the Life Insurance Fund balance as of June 30, 2024, reached Tk 55,188.62 million, showing a net increase of Tk 5,892.25 million from Tk 49,296.37 million on June 30, 2023.
One of the Listed companies, Beacon Pharmaceuticals PLC has recommended 20% Cash dividend and 10% Cash Dividend to Sponsor Shareholder and Directors for the year ended June 30, 2024.
It has reported EPS of Tk 2.26 paisa, and NAV per share of Tk. 26.37 for the year ended June 30, 2024.
The Annual General Meeting (AGM) of the company will be held on December 23, through the digital platform. The record date for this has been fixed at October 27.
The Bangladesh Securities and Exchange Commission (BSEC) has removed three audit firms from its panel for their failure to secure enlistment with the Financial Reporting Council (FRC), according to a notice issued today.
The firms—A Hoque & Company, FAMES & R, and SK Barua & Company Chartered Accountants—were delisted following the FRC’s request. In December last year, the FRC published a list of enlisted audit firms and subsequently, in February, requested the BSEC to remove any firms that were not included on that list.
BSEC regulations mandate that financial statements signed by auditors outside its approved panel will not be accepted. With the removal of these three firms, the total number of audit firms on the BSEC panel has been reduced from 48 to 45.
Sources from the FRC revealed that 15-20 audit firms failed to secure enlistment last year, and approximately 45 chartered accountants are currently under restrictions imposed by the Institute of Chartered Accountants.
Although the delisted firms can no longer audit issuer companies or listed securities, they are allowed to complete audit and assurance services that were initiated before their removal, the BSEC clarified.
