Monthly Business Review - January 2016

Volume 12 l Issue 01 l January 2016
CONTENTS
this issue
ECONOMY
Bangladesh to be second best performer in 2016

Bangladesh economy shows flexibility
COVER STORY
24
24
Monetary Policy Statement Jan-Jun 2016

Review: Embracing expansionary policy to
stimulate investment
TRADE
Export earning booms in 2015
Capital machinery import records substantial rise
26
26
BUSINESS
Mobile cash transfer inclines 54% in November 2015
SMEs drive economy to advanced growth
28
28
02
Monetary Policy Statement (MPS) H2 FY 16 has

made a shift from the monetary stance of last
couple of years, with a larger focus on growth
by rate cut and increase in money supply. In
our observation, inflation may drop further and
growth target is attainable due to improved
political calm. Overall, the policy stance can be
outlined as Step towards Expansionary.
SPOTLIGHT ON STARTUP
SOLshare: Lets Share the Sun
REGULATORY NEWS
USD 200 million project to automate state banks

BTRC to monitor internet service costs
30
30
INTERNATIONAL
Oil prices extend rise above USD 32
China economic growth slowest in 25 years
32
32
20
IDLC NEWS
Design & Printing: nymphea l www.nymphea-bd.com
IDLC Spreading Warmth in winter
MARKET ROUNDUP
Commodity Market Roundup
Currency Market Roundup
34
35
CAPITAL MARKET REVIEW

Market Commentary
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other means without written permission from the publisher.
40
38
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IDLC MONTHLY BUSINESS REVIEW
Cover Story
Monetary Policy Statement Jan-Jun 2016 Review

Embracing expansionary policy to stimulate investment
onetary policy rests on the relationship between the rates of interest in an economy, that is the
price at which money can be borrowed, and the total supply of money. Monetary policy uses
a variety of tools to control one or both of these, to influence outcomes like economic growth,
inflation, exchange rates with other currencies and unemployment. Where currency is under a
monopoly of issuance, or where there is a regulated system of issuing currency through banks which are tied
to a central bank, the monetary authority has the ability to alter the money supply and thus influence the
interest rate (in order to achieve policy goals). The beginning of monetary policy as such comes from the late
19th century, where it was used to maintain the gold standard.
New monetary
policy 2016
(January to June)
of Bangladesh has
been designed
to boost the
investment of the
country as well as
boost the economy.
New monetary policy 2016 (January to June) of Bangladesh has been designed to boost the investment of
the country as well as boost the economy. To ensure the objective, Bangladesh Bank has declined the repo
and reverse repo rate by 50 basis point at 6.75% and 4.75% respectively. The repo and reverse repo rate were
7.25% and 5.25% respectively since 2013. As the repo rate has been declined, it enables banks and FIs getting
fund from Bangladesh Bank at lower rate which simultaneously enable them to lend at lower rate to the
business units which finally helps to accelerate the growth of the economy.
Private sector credit growth has been forecasted 14.8% in current MPS which was 15% in previous MPS and
the actual rate was 13.7% till November 2015. Bangladesh Bank has also ensured that if the demand from
credit exceeds the expected growth, it has preparation to meet up the excess demand.
It is obvious that the current policy has been made to accelerate the growth though there are some factors
which is challenging the monetary policy towards growth. Though the economic indicators are doing well,
the investment has not been made in expected level. Banks are liquid (around BDT 120,000 crore) enough to
fund the business whereas the businessmen argue that it is difficult to do business with double digit rate of
financing. Prominent bankers opined that though policy is favorable, the policy makers must concern about
the investment climate to accelerate the credit growth which will multiply the economic activities towards
growth. Price mismatch between international fuel market and domestic fuel market is another challenge for
Bangladesh GDP
Growth Rate
the real economy which intensifies the operating cost of the industry and create obstacles towards industrial
6.8%
The primary tool of monetary policy is open market operations. This entails managing the quantity of money
6.5%
in circulation through the buying and selling of various credit instruments, foreign currencies or commodities.
growth though it is a fiscal issue which should also be taken care of by the respective authority.
All of these purchases or sales result in more or less base currency entering or leaving market circulation.
2014
2016 E
2012
2010
2008
2006
2004
2002
2000
1998
1996
1994
There are some factors which have been considered by central bank in developing monetary policy:
Source: Bangladesh Bank
short term interest rates
long term interest rates
velocity of money through the economy
exchange rates
credit quality
bonds and equities (corporate ownership and debt)
government versus private sector spending/savings
international capital flows of money on large scales
Financial derivatives such as options, swaps, futures contracts, etc.
Role of Monetary Policy
Broad Money (M2)

Growth Rate
22.4%
The central bank is the sole issuer of banknotes and bank reserves. That means it is the monopoly supplier
of the monetary base. By virtue of this monopoly, it can set the conditions at which banks borrow from the
central bank. Therefore it can also influence the conditions at which banks trade with each other in the money
market.
17.1%
15.0%
2015-16 E
2014-15
2013-14
2012-13
2011-12
2010-11
2009-10
2008-09
2007-08
2006-07
2005-06
2004-05
12.4%
In the short run, a change in money market interest rates induced by the central bank sets in motion a
number of mechanisms and actions by economic agents. Ultimately the change will influence developments
in economic variables such as output or prices. This process is also known as the monetary transmission
mechanism and it is highly complex. While its broad features are understood, there is no consensus on its
detailed functioning.
Long-run neutrality of money
It is widely agreed that in the long run, after all adjustments in the economy have worked through a change
in the quantity of money in the economy will be reflected in a change in the general level of prices. But
it will not induce permanent changes in real variables such as real output or unemployment. This general
principle, referred to as the long-run neutrality of money, underlies all standard macroeconomic thinking.
Real income or the level of employment are, in the long term, essentially determined by real factors, such as
technology, population growth or the preferences of economic agents.
Inflation - a monetary phenomenon
General Inflation %
7.28
7.22
6.87
6.84
monetary growth. While other factors (such as variations in aggregate demand, technological changes or
commodity price shocks) can influence price developments over shorter horizons, over time their effects can
be offset by a change in monetary policy.
7.10
7.04
Inflation is a monetary phenomenon. Prolonged periods of high inflation are typically associated with high
Monetary Policy Framework
6.66
6.60
6.46
6.27
6.21
Since monetary policy goals cannot be influenced directly, like most central banks, BB uses a set of indirect
6.24
6.20
6.10
6.19
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Jan-15
Feb-15
Mar-15
Apr-15
May-15
Jun-15
Jul-15
Aug-15
Sep-15
Oct-15
Nov-15
Dec-15
6.04
6.35
6.19 6.36
12 Month Avgerage
Point to Point
instruments. As noted above, the Bangladesh Bank pursues its monetary policy within a framework of
monetary targeting with reserve money as the operating target, and broad money as an intermediate target.
The Flow Chart in the following page on the Monetary Policy Framework provides a simple illustration.
The broad money (M) can be influenced indirectly by changes in policy instruments that target and monitor
the reserve money (RM) via the money multiplier (m). The primary mechanism employed for this purpose
is the direct control of liquidity on a day-to-day basis achieved by the ratio, reverse-ratio and the weekly
Flow Chart: Monetary Policy

Framework of Bangladesh Bank
Policy Instruments
* Repo & Reserve Repo
Auction
* Various T-bill auctions
* Setting SLR & CRR
* Bank Rate
Targets
Inflation Trend %
7.10
6.66
6.46
5.64
overnight transactions. While adjusting the excess liquidity in the banking system by this mechanism, BB
6.35
6.3 6.41
6.21 6.19
6.08
6.22
5.93
A Glimpse of Monetary Policy Statement Jan-Jun 2016

Bangladesh Bank has shown all intentions of spurring the economy which is aiming a trajectory towards 7%
Nov-15
Jul-15
Sep-15
Jan-15
May-15
GDP growth. The central bank, after a long period of time, has reduced the policy rates by 50 basis points.
Mar-15
Nov-14
Jul-14
Sep-14
5.41 5.34 5.47
T-bill auctions. The latter instruments would in turn have an impact on the inter-bank call money rate for
simultaneously resets the ratio and reverse ratio rates on a daily basis.
6.87
5.78
** Price Stability
** Economic Growth
Information Variables:
. Foreign Reserve
. Short Term Interest
rate
. Liquidity
. Domestic Credit
. Inflation & Exchange
rate
Policy Decision based on

market information and
judgment of the policy maker
7.28 7.22
Goals
1. Operating Target
* Reserve Money
2. Intermediate Target
* Broad Money
General, 12 Month Avgerage
Higher growth rate has been targeted for Broad Money, Domestic Credit, Public Sector Credit and Private
Sector Credit in June 2016 compared to the actual growth achieved in Dec 2015. Inflation is expected to
reduce to 6.07% by June 2016 from 6.2% in Dec 2015 mainly due to low fuel and commodity prices globally,
Non-Food, 12 Month Avgerage
even after pay scale revision in the Government sector. This investment stimulating monetary policy focuses
on financial inclusion through selective easing for different productive sectors, strategic move in loan
disbursements to green and budding projects in the backdrop of excess liquidity in the banking system.
15-Jun
Particulars
Repo and Reverse

Repo Rate %
7.75
7.25
7.25
6.75
5.75
5.25
Oct-15
Jun-15
Oct-14
Feb-15
Jun-14
Feb-14
Jun-13
4.75
Oct-13
Oct-12
Feb-13
5.25
Inflation- General
Target
6.50%
Actual
6.40%
15-Dec
-1.70%
13.10%
15.50%
13.60%
15.50%
8.00%
10.40%
Private sector credit growth
16.50%
14.20%
17.40%
-2.70%
10.90%
15.00%
Domestic credit growth
25.30%
14.30%
6.20%
16.50%
Public sector credit growth
16.00%
15.40%
12.60%
Actual
15.90%
16.50%
Revised Target
in Jan-Jun
2016 MPS
Target
Reserve Money growth

Broad money growth
16-Jun
Target in
Jul-Dec
2015 MPS
14.30%
13.80%
6.20%
15.60%
23.70%
15.00%
6.10%
15.00%
18.70%
14.80%
GDP Growth rate

The GDP growth rate of Bangladesh was 6.1% in 2014 which has been consistently around 6% for the last few
years. A recent study of World Bank has shown that for each percentage point increase in growth of India,
growth of Bangladesh increases by 0.4 percentage points and growth rate of India recently exceeded its
Yield on Treasuries %
8.2
7.7
8.0
7.6 7.4
7.4
6.8 6.9 6.8
8.2
8.1
7.7
7.5 7.6 7.3
6.7
6.4
6.3
5.9
5.4
5.4
growth of 6.8% in FY16 for Bangladesh seems achievable if the economic and political environment remain
5.5
5.2
4.1
3.7
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Jan-15
Feb-15
Mar-15
Apr-15
May-15
Jun-15
Jul-15
Aug-15
Sep-15
Oct-15
Nov-15
Dec-15
3.3
3.0 2.9
91 Day
182 Day
developing nations will face a growth of 4.7% in 2016. IMF projected growth rate of Bangladesh to be almost
double of that of global GDP growth and also more than that of China. In line with this forecast, the targeted
7.3 7.2
6.2
previous levels to a projected level of 7.5% in 2016. As per the world economic outlook of IMF, emerging and
364 Day
conducive. BB forecast based on ARMA model and sector wise 10 years average growth reaffirms a possible
GDP growth rate of 6.8%-6.9% which is very close to the 7% growth target of the Government.
Broad Money
Broad Money (M2) growth has been targeted at 15% for FY16 which was at 12.4% in 2014-15. The target
has been set after taking the public and private sector credit growth into consideration. M2 is adequate to
support the growth and inflation target of BB.
Targeted Credit Growth
Call Money Rate %

8.6
8.2
7.9
8.4
15%. BB has revised down its June 2016 target mentioned in its MPS of June 2015 to an achievable level. BB
6.4
5.8
5.6
targets domestic credit growth rate of 15.5%, public sector credit growth of 18.7% and private sector credit
5.6
growth target of 14.8% for June 2016.
Nov-15
Jul-15
Sep-15
May-15
Jan-15
Mar-15
Nov-14
Jul-14
3.7
Sep-14
was 1.7% compared to the target of 8% while private sector credit growth was 13.8% compared to the
target of 14.3% for Dec 2015. As a result, total domestic credit growth was 14.2% compared to the target of
7.6
6.9
6.7
Both public and private sectors credit growth undershot the targets for Dec 2015. Public sector credit growth
Foreign Reserves
Bangladeshs current FX reserve stands at USD 27.5 billion which is sufficient to meet more than 7 months
of import payment. However, BB estimates the export and import to grow by 8.5% in FY16 and remittance
to increase by 5% for the next fiscal year. This will put pressure on the foreign exchange reserve. However,
lower fuel import cost will benefit countries like ours. On the other hand, the number of people going
abroad for jobs is rising and it is expected that the remittance will remain stable amid ongoing crisis in the
Middle East. BB projects current account balance to be USD 955 million and BOP to be USD 2.28 billion in
2015-16.
Inflation
Inflation has been well managed in the recent years the general inflation dropped from above 7% of mid-
Domestic Credit
Growth
12.3%
11.2%
10.3%
fuel price. Moreover, the food component occupies about 60% of our consumption basket and the price of
food is falling all over the world. However, the nonfood inflation is in an upward trend since Oct 2014 and may
cause BB to be a bit cautious. The pay rise in the Government sector is likely to push up prices but expected
fuel price adjustment in the country may pull it down again.
9.9%
Policy Rate
9.6%
Jun-15
Apr-15
Feb-15
Dec-14
Oct-14
9.8%
Aug-14
Apr-14
Jun-14
10.1%
Oct-15
10.7%
10.9%
10.6%
10.8%
Aug-15
11.1%
Dec-15
11.6%
10.9%
2014 to 6.1% in Dec 2015. The decline can be attributed to depressed global commodity market and falling
Repo rate of 7.25% has been reduced to 6.75% and reverse repo rate of 5.25% has been lowered to 4.75%. BB
expects to stimulate investment in the economy to achieve the higher GDP growth target in the upcoming
fiscal year. Meanwhile, yields on T-bill and T-bond are falling followed by call money rate because of excess
liquidity in the economy.
In January 2012, the repo and reverse repo were revised upwards by 50 bps from 7.25% to 7.75% and 5.25%
Public Sector
Credit Growth
12.7%
2.5%
Oct-15
Dec-15
Aug-15
-0.5%
-1.4% -1.7%
-2.6%
-2.6%
-3.0%
-2.5%
Feb-15
Dec-14
Oct-14
Aug-14
Jun-14
Apr-14
1.4%
Jun-15
5.3%
remained same for almost three years. Finally, they have been revised downwards again to support the
expansionary monetary policy.
The challenges facing monetary policy
10.3%
5.5%
Apr-15
7.5%
to 5.75% respectively. After that, both the rates were revised downwards by 50 bps in Feb 2013 where they
Monetary policy faces a number of challenges, linked particularly to the interaction between the development
of the real economy and the turbulence in the financial markets. This has forced central banks to operate not
only by way of conventional measures, in particular the key interest rate at which liquidity is injected into the
system, but also via unconventional measures, designed to bypass the malfunctioning that has arisen in the
financial system.
Private sector credit

growth (excluding
overseas loans)
19.9%
18.9%
14.8%
11.4%
18.4%
12.2%
11.1%
11.4%
11.1%
13.6% 13.8%
12.9%
13.3%
Assessing the economic situation

A major challenge for central bank concerns the assessment of the current economic situation, in terms of the
relative strength of the economy. Making projections is always difficult and the political instability as well as
other non-economic factors make it impossible to some extent.
One such indicator is the unemployment rate. In economic models the level and rate of potential growth
December
May
2014
September
January
May
2013
September
January
May
2012
September
January
May
September
January
correspond to an equilibrium unemployment rate. Given the difficulty of measuring the output gap, some
2015
Foreign Reserve
USD Billion
27.5
27.1
26.4
26.2 26.4
economists have proposed replacing it with a measure of the employment or unemployment gap. An
expansionary monetary policy would be thus justified as long as unemployment did not begin to decline
significantly toward its long-run level.
Note: The unemployment rate measures the number of people actively looking for a job as a percentage of
the labor force.
Forecasting inflationary pressures

The second challenge, related to the first, concerns the difficulty in estimating inflationary pressures and in
forecasting them. Another aspect has emerged, linked to the global inflation, tied to the commodity markets
25.5
25.0
and products imported from emerging countries. Managing low-level of inflation while expediting growth is
24.1
23.7
a challenge as we know the inflation and growth are positively correlated.
23.0 23.1
22.3 22.3
22.1
22.0
21.8
21.6
21.4
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Jan-15
Feb-15
Mar-15
Apr-15
May-15
Jun-15
Jul-15
Aug-15
Sep-15
Oct-15
Nov-15
Dec-15
The recent pay rise in the government sector is likely to raise prices at least through expectations and the fuel
price adjustment by the government, if executed as committed, is likely to pull prices downward. No one is
sure about its net effect. When Europe, Japan and China weaken and global oil prices foresee a further slide,
Bangladesh may remain less comprehensive about inflation right now.
Complex Financial Framework

The financial crisis has emerged due to the excessive financial leverage that has fuelled excessive consumption
and speculative bubbles on different markets, particularly real estate. The return to a sustainable equilibrium
depends on the restructuring of these excesses. This restructuring cannot be immediate, nor should it last too
long. It is important how the central bank should deal with asset-market bubbles.
The adjustment cannot be immediate because a too rapid reduction in the leverage risks causing an
Export and Import

Forecast USD Billion
50.0
45.0
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
-
44.1
40.7
33.9
31.2
excessive contraction of the assets and liabilities of financial institutions, with an impact on real activity. In
this adjustment process, monetary policy plays a decisive role, via conventional measures and exceptional
ones. Other than these three, there are many economic, non-economic factors by which monetary policy has
been challenged.
When the BB cuts its policy rates to reduce spread, interest rate is still higher in sanchaypatra rates that
Export
Import
2015-16 E
2014-15
2013-14
2012-13
2011-12
2010-11
2009-10
2008-09
2007-08
2006-07
2005-06
supposedly impede banking deposit rates from falling. However, the average lending rate fell from 12.84% in
Export Forecast
Import Forecast
July 2014 to 11.27% in November 2015, while the average deposit rate fell from 7.71% to 6.46%. Again 6%+
inflation rate is a big question of real return to the depositor. But the concern over the excess liquidity will not
end soon, so the role of the BB is crucial.
The central bank has sustained its pressure on all banks to reduce its spread by lowering NPLs and enhancing
efficiency. But, current NPL in banking industry is still double digit which also partially blocks the opportunity
Remittance USD Billion

16.1
will not be the only catalyst for investment stimulation.
Macro Factors
15.3
14.5
to reduce lending interest rate as well as boost investment. If the results are summed up, lower lending rates
To increase the investment, components of production and proper distribution of products in the market
14.2
and to maintain the stability in price level, the economic infrastructure such as roads, railway and naval
system, electricity and telecommunication system play a vital role. The government has taken various steps
2015-16 E
2014-15
2013-14
2012-13
to improve these infrastructures. Constructing Padma Bridge, safe naval system, development of electricity
sector and setting up modern telecommunication system through the establishment second submarine
cable are some important projects taken by the government. Education, training, research, public health,
cultural development, ethical views play an important role in the development of human resources.
Bangladeshis
Going Abroad for
Jobs (Thousand)
51
45 4546 47
45 43
42
4343
37
38
38
37 38
32
34 34 33
30 31
28 29 29
35
35
28
July
September
November
January
March
May
July
September
November
January
March
May
July
September
37
2013
2014
2015
Instead of significant turn down of commodity & fuel price in international market, our local investors didnt
get any favor in their production cost, which ultimately actuate them into unfair competition in global market.
Even average inflation rate of our local economy didnt bring down significantly from last few years, huge
low cost foreign investment (loan on very cheap interest rate) was injected in private sectors, but significant
result in outcome is yet to be observed. Political stability & sustainable pricing of petroleum products play
pivotal role in propelling up investment as well as achieving GDP growth. Interest rate is not the only factor in
boosting investment, rather attaining investment friendly environment, fixing up political stability, ensuring
utility, policy & physical infrastructure are the obvious factors to boost benefit of interest rate cut.
MPS H2 FY 16
MPS H2 FY 16 was furnished with the following Policy Instruments, Policy Goals and Intermediate Targets:
Policy Instruments
Current Account
Balance and Balance
of Payment USD
Million
5,128
Liquidity support for banks through applicable policy instruments
Policy interest rates
5,483
Policy Goals
4,373
2,388
2,279
1,995
1,406
955
494
GDP growth estimate of 6.8% - 6.9%

g
(447)
2011-12 2012-13 2013-14 2014-15 2015-16 E
Current account balance
Balance of Payment
Weighted Average
Spread %
5.31
July
September
November
January
March
May
July
September
November
January
March
May
July
September
November
4.81
2014-15
2015-16
Unemployment Rate
in Bangladesh
Pay raise for government service-holders might increase consumption and additional demand
might play against the benefit attributed from oil price adjustment.
Intermediate Targets
g
Broad money growth target is set at 15.0%, which was 15.6% in last MPS
Reserve money growth target is set at 14.3%, which was 16.0% in last MPS
Domestic credit growth target is set at 15.5%, which was 16.5% in last MPS
Private sector credit growth target is set at 14.8%, which was 15.0% in last MPS
Public sector credit is targeted to grow by 18.7%, which was 23.7% in last MPS
Observations
g
2005
g
2006
2007
2008
2009
2010
2011
2012
2013
4.25
In line with decline in commodity price in the global market, government might adjust local price
of oil downward, which will ease the inflation pressure further.
Target Adjustments in MPS
5.02
4.00
BBs estimate is slightly lower than that set in the previous MPS of 7.0%. Timely implementation of
ADP along with low fuel cost and infrastructure support to business community will be key to attain
the target.
Curbing inflation to 6.07%
2013-14
Policy interest rates have been revised for the first time in last 3 years. Repo Rate and Reverse Repo
Rate both were slashed by 50 basis points to stand at 6.75% and 4.75%, respectively.
4.50
4.75
Monetary policy stance of H2 FY 16 appears a step towards expansionary stance of BB in contrast

to the previous MPS. While global scenario would largely assist to attain inflation target, growth
remains the major focus.
Relative calm in political front and consequent revival of investment and consumer confidence
would be required to attain growth target of 6.8%-6.9%.
Policy rate cut signals an amicable stand for private sector investment which would drive the
growth engine of the country.
Persistence in foreign exchange reserve would help to maintain stability in exchange rate.
BB might take stronger stand on loan delinquencies by increasing supervisory vigilance.
5.00
(The cover story was prepared by Research Team IDLC Securities Limited and IDLC Investment Limited)
In conversation with
Dr. Biru Paksha Paul

Chief Economist, Bangladesh Bank
If the bank is efficient, then a person can spend less and earn more, so the
main point is efficiency. Efficiency is earned via digitalization. BB is directing
or pursuing others to go for digitalization. Widespread use of digitalization
help reducing the lending rate .
MBR: Policy rate cut is surely a signal for the Banks and FIs (to reduce lending rate), but considering the
contrarys overall investment environment & certainty does it guarantee the same? Can Bangladesh Bank
take any direct interventions in this regard?
- Dr. Biru Paksha Paul: Not directly, but indirectly, BB is trying hard & LPL can reduce already. Another
thing is spread, actually gives income to the bank. If the bank is efficient, then a person can spend less
and earn more, so the main point is efficiency. Efficiency is earned via digitalization. BB is directing or
pursuing others to go for digitalization. Widespread use of digitalization help reducing the lending
rate .
MBR: Along with political uncertainty and the scarcity of utilities (i.e. gas, electricity and other inputs),
do you think it is possible to boost the countrys aggregate investment by implementing the recently
published MPS?
- Dr. Biru Paksha Paul: MPS does not fully guarantee the possibility of the investment. It has reduced
the policy rate. It has increased public and private credit. MPS actually gives some signals. On the
other side utilities like gas, electricity etc. are a responsibility of the government. However, at this
moment MPS has some limitations.
MBR: The private sectors credit growth target was set at 15% in the last announced MPS (In June 2015), in
spite of policy rate cut the target is set at 14.8%, whereas the actual growth rate is around 13.72%? Do you
think the revised target is achievable?
- Dr. Biru Paksha Paul: I think it is easily achievable . In December, credit growth rate was 13.8%. Within
6 months, we have achieved 14.8%. So I think it will be easily achieved.
MBR: Do you think our country has enough investment opportunity to utilize the excess liquidity to its
fullest (which is around BDT 131,000 Crore)?
- Dr. Biru Paksha Paul: Actually the total money is not kept idle. However, this is not the real picture. Idle
money is much less than that, but still there is some liquidity and at the same time, we try to boost
investment in a particular sector in last quarter, so liquidity will be absorbed.
MBR: Our food inflation decreased to 6.05% whereas the non-food inflation increased to 6.41% in
December. As recent pay raise in the government sector is likely to raise the expected price level, do you
think that it will be a challenge for Bangladesh Bank to keep inflation at desired rate by June 2016?
- Dr. Biru Paksha Paul: Yes, I think so. It will be challenging because of the raised price. At the same time,
we had the downward pressure, like to reduce commodity price. We will be able to control inflation
in future because we have the capacity to control inflation.
MBR: Would you please give your opinion regarding non-economic factors i.e. strikes or political instability
which restrict to implement monetary policy and to have expected results of policy implementation.
- Dr. Biru Paksha Paul: Well, I think if there is strike, it will affect total supply. Commodities cannot
come from the countryside. Sufficient supply will reduce the price. Strike or political instability will be
difficult to achieve the monetary policy target. We had some political disturbances during the last 3rd
quarter in the fiscal year 2015, but it still cannot block the entire flow of the economy.
MBR: Can we expect that our interest rate will come to single digit in near future?
The only way

to absorb
unemployed
people is
searching for
private sector
jobs. Government
employment
opportunity is
limited.
- Dr. Biru Paksha Paul: Yes. The interest rate has already come to single digit in some particular spaces.
I believe that the lending rate will come to single digit. There are two ways to bring it down. One way
is by reducing inflation, and another way is by reducing spread. Actually now average lending rate is
11 point something. If we can reduce the spread, the inflation can also be reduced.
MBR: We know that the final objective of monetary policy or any economic decision is to create more
employment which can be hardly quantified. Thus the growth is considered as proxy. Furthermore,
growth of Bangladesh is quite admirable but still we have a huge number of unemployed people which
includes graduates too. What do you have to say regarding this issue?
- Dr. Biru Paksha Paul: The only way to absorb unemployed people is searching for private sector jobs.
Government employment opportunity is limited. So private sector gives the main hope. On the other
hand, it is difficult for the government to increase employment opportunity in a short time.
MBR: Please say something about your first time in a banking fair in Bangladesh?
- Dr. Biru Paksha Paul: First of all, Id like to give thanks to my honorable governor for this fair. It was
just the beginning but every bank and non bank financial institution should gather in this fair. From
this fair, everybody will be able to know the facilities of the banking activities. I think people should
expect banking fair every year.
In conversation with
Professor Dr. Gour Gobinda Goswami

Vice Chancellor, North South University
I expect actual growth rate to be slightly lower than 7%. The global recovery
will be slower this time due to Non-India BRICKS growth downturn. However,
South Asia led by India and Bangladesh will turn out to be growth champion.
MBR: Do you think that the recently published MPS is solely enough to boost the countrys investment or
which aspects the government needs to closely focus to achieve the target?
- Dr. Goswami: The main objective of MPS is to deal with price stability. Governments annual budget
mostly deals with growth. But these two documents are interlinked in the sense that either one is not
enough to deal with this paradox. The paradox is that high growth comes at the cost of high inflation
all the time. The MPS made attempt to encourage investment by lowering the REPO and REVERSE
REPO by 50 basis points. The attempt is good but practical aspect is to be understood properly. Our
interbank call money rate is already too low and banks are having huge amount of idle money in their
hand. In this context, MPS is not enough to boost investment. I think infrastructure, power, gas etc.
are the main deterrents to domestic investment at this stage. Political stability is also needed to gain
consumers confidence. FDI is supposed to be depending more on perception about a country rather
than the actual governance structure of the receiving country.
MBR: As we know the food inflation in Bangladesh is strongly correlated with that in India which is rising.
Do you think it might affect our government to achieve the goal?
- Dr. Goswami: There is weak link between Bangladesh and Indias inflation through import channel.
World Bank has projected less then proportional transmission of Indian growth to Bangladesh in its
Global Economic Prospect 2016. However, the inflation transmission will be lessened because we
are still going through the regime of global oil price and commodity price decline. The wage hike
I think
international
agencies have
some set criteria
to ensure
governance of
FIs. We have not
yet complied
with all of them.
The reasons
are twofold:
noncompliance,
and lack of
accountability.
in public sector might cause private sector wage adjustment and the cumulative effect would be
higher. But MPS forecast that the downward force to be stronger than the upward pressure, which is
kind of reasonable assumption at this stage.
MBR: In last few years, several scam were occurred in many of our Banks (Including private and state
owned), that was eventually one of the prime reasons of slow credit growth. Do you think preventive
measures taken by the government and respective authorities are enough? In which aspect the authorities
should give more emphasis to ensure good governance in the FIs?
- Dr. Goswami: I think international agencies have some set criteria to ensure governance of FIs.
We have not yet complied with all of them. The reasons are twofold: noncompliance, and lack
of accountability. These areas need improvement and the conditions imposed by international
regulatory agencies must be maintained properly. We should follow the international best practices.
MBR: All of the three credit growth targets (Domestic, Public and Private) have been reduced in the newly
published MPS from the previous MPS. Historically, it is observed that the actual growths are always a little
less than that of the target. In this scenario, do you think we can achieve 7% GDP growth with this newly
curtailed (Projected) credit growth?
- Dr. Goswami: I think it all depends on whether we are going to face repeated hartals or blockades. MPS
will only work as a guideline. I think the public sector credit growth assumption is based on Padma
Bridge borrowing which is reasonable. I expect actual growth rate to be slightly lower than 7%. The
global recovery will be slower this time due to Non-India BRICKS growth downturn. However, South
Asia led by India and Bangladesh will turn out to be growth champion. Planned borrowing through
national savings certificate has become dysfunctional already. To maintain a targeted pattern in
public borrowing Government has to rely more on market based instruments like bond, which is not
developing properly. Its primary market is very defective and secondary market does not exist.
MBR: Along with the decreased lending rate the deposit rate offered by the commercial banks are also
decreased. Is there any chance that the savers unit get demotivated and investment in unproductive
sectors may be increased?
- Dr. Goswami: I think the interest rate will always move with inflation rate. Commercial banks are
bound to adjust it based on market development. Savers and investors are not the same group of
people. Savers will be forced to save because they have no other alternative. I think unproductive
consumption will be encouraged like developed countries. Investment will be less affected.
MBR: Managing low-level of inflation while expediting growth is a challenge as we know that inflation and
growth are positively correlated. Would you please give us your opinion regarding this issue?
- Dr. Goswami: I agree 100%. I expect moderate growth and moderate inflation in year 2016 for
Bangladesh. That means that paradox still remains.
MBR: Our economic indicators are improving but what about Gini coefficient which indicates income
inequality. We know equality promotes sustainable growth. Would you please give your opinion
regarding this issue?
- Dr. Goswami: I have some reservation about Gini coefficient because it is calculated with long interval
in HIES. The fact is that income inequality is increasing. This is the ultimate fate of any market-based
development. Growth comes at the cost of environment and equality. Governments social safety
net programs will be helpful in mitigating it. But the existing programs are not enough for a huge
country like Bangladesh.
MBR: How should the central bank deal with asset-market bubbles?
- Dr. Goswami: This can be ensured through proper compliance to regulatory guidelines. Now market
efficiency has improved substantially than it was in the past but still market fundamentals are not the
dominant determinants of asset price in Bangladesh. Expectations play major role.
10
Entrepreneurs Corner
Dream Touch Beauty Parlour

Ms. Sadia Tajmin Dola started her business in 2008 under the banner
of Dream Touch Beauty Parlour in a rented premise. Her business
is mainly committed to provide beauty care services like hair
treatment, facial, pedicure, manicure, yoga, spa etc.
Managing Director
: Ms. Sadia Tajmin Dola
Year of Establishment
: 2008
Website
: -
Main Product
Number of Outlet
: 2
Space
: 2900 sqf
Number of Employees
: 15
Hair treatment, facial, pedicure,

manicure, yoga, spa etc.
MBR: Tell us briefly about yourself.

Ms. Sadia: I completed my studies and then I took some courses
in beautification from abroad. When I returned from there I grew
this idea in my mind of opening a parlor. The first outlet which is in
Jhigatala started in early 2008, the second outlet opened from July
2015; however some of the interior works are still in progress.
MBR: What made you want to get involved in this venture, what
was your inspiration?
Ms. Sadia: Basically, I have seen most of my family members giving
service to different organizations. However, this type of work didnt
seem appealing to me. I wanted to do something on my own, which
perhaps led to the initiative of an entrepreneurship. During that time
I observed that the women were much cautious about beautifying
themselves. As a result, I got myself enrolled in a formal training of
beautification and then started my parlor business on a small scale.
MBR: Do you have plans to open more outlets?
Ms. Sadia: Yes, I do have plans to expand to more outlets even
outside Dhaka.
MBR: What kind of barriers did you face while starting this
business in Dhaka?
Ms. Sadia: I faced some hurdles from my family. When I told them
about doing business as our background consists of jobholders so
they were quite reluctant at first.
MBR: How much investment does an aspiring entrepreneur
require in terms of capital?
Ms. Sadia: I didnt face many problems financially. I invested my
own capital so it all started like this. Initially, an entrepreneur needs
at least BDT 5 lac before starting a parlor; however, they must have
knowledge and expertise about the industry.
MBR: What are the initiatives that you are taking to ensure
customers satisfaction level?
Ms. Sadia: Our biggest attraction is our clients as they are much
aware of what they need regarding their skin so we help them know
better about skin products and treatments. This is one of attractions,
thus the customers rely upon us.
MBR: How are you marketing your venture to the consumers?
Ms. Sadia: Currently, Im not advertising that much. When I started
I used to hold henna festivals in schools, free haircuts etc. that way
I came across many clients and I used this as an advantage when
those same clients started visiting my parlor and soon word spread,
but I havent advertised in newspapers yet.
MBR: Being a successful business person, how do you balance the
family and business commitment?
Ms. Sadia: We have to balance both our families and business. My
family supports me and they are aware of my schedules. Sometimes
there might be an imbalance but I can manage it.
MBR: What will you suggest for someone who wants to set up an
outlet similar to yours?
Ms. Sadia: My advice would be to fully have the support of your
family, without it doing business is a tough job.
MBR: What is your opinion about doing business with the help of
social networking sites and do you have any thought of using it?
Ms. Sadia: Yes we are using social networking site like Facebook to
promote, and we run a page. The responses and feedbacks we are
getting are quite positive.
11
Research in Focus
Global Risks 2016

Central Asia
including Russia
Europe
Unemploument or
underemployment
Fiscal crisis
Large-scale
involuntary
migration
Data fraud
or theft
Cyber attacks
North America
Profound
social
instability
Extreme
weather
events
Water crises
Middle East
and North Africa
Faiture of
national
govermance
Profound
social
instability
Latin America
and the Caribbean
Energy
price
shock
Unemployment or
underemployment
Unemployment or
underemployment
Failure of
national
govermance
Extreme
weather
events
Unemployment
or underemployment
Natural
catastrophes
Failure of
national
govermance
Unemployment or
underemployment
Sub-Saharan
Africa
Failure of national
govemance
East Asia
and the Pacific
Water crises
South Asia
Extreme
weather
events
Failuar of critical
infrastructure
3rd
Risk category
Economic
Environmental
Failure of national
govemance
Interstate
conflict
Geopolitical
Societal
Technological
Ranking position
in each region
st
2nd
he Global Risks Report 2016 focuses on the ways that global risks could be minimized in the next ten
years. This year marks a forceful departure from past findings, as the risks about which the report has
been warning over the past decade are starting to manifest themselves in new, unexpected ways and
cause damage to the people, institutions and economies. Global Risk is an insight report published by
the World Bank Group members World Economic Forum.
The Study
Global risks still exist because of their combined impact and likelihood, and involve some economic risks,
including fiscal crises in key economies and high structural unemployment and underemployment. These
are triggered by cyber-attacks as well as profound social instability. Their assessment reflects the potentially
profound impact of the Fourth Industrial Revolution on the economy and society and emphasizes the need
for safeguarding future benefits.
Global risks still

exist because of
their combined Three reasons emerged strongly: the potential for climate change to exacerbate water crises, with impacts
impact and including conflicts and more forced migration, calling for improved water governance to adapt to climate
likelihood, and change and accommodate a growing population and economic development; the need to address the global
involve some refugee crisis, adding emphasis to policies that can build resilience in addition to responding to the immediate
crisis; and the risks of failing to fully understand the risks around the Fourth Industrial Revolution and how this
economic risks, transition will impact countries, economies and people at a time of persistently sluggish growth.
including fiscal
crises in key Risks in focus
economies and The Global Risks Report describes a world filled with rapid advances in technologies, coupled with ever
high structural growing cyber fragilities and persistent unemployment and underemployment.
unemployment Food security risk
and The changing weather patterns could harm food security and agricultural production across geographic
underemployment. boundaries. The most climate vulnerable countries often heavily rely on agricultural productivity to sustain
economic growth and development.
12
Three risks
interconnection
clusters stand out:
climate change in
relation to water
and food crises; the
growing challenges
of the rising number
of displaced
people worldwide;
and what the
Fourth Industrial
Revolution means in
an era of economic
risks.
Ebola crisis
The outbreak of a global disease named Ebola warns the population growth, rapid urbanization and
increasing transnational flows of commodities, people and animals. It intensifies the risk of infectious
transmission across geographies while equally diminishing the ability to respond; all at a time of growing
resistance of micro organisms to todays most effective medicines.
Technology Risk
Technology makes it easier for the citizens to find information and socialize with those citizens who feel
disenfranchised by distant elites. It attempts to discover the risk of social instability if both governments
and business embark on either repressive actions or non-action out of uncertainty about how to deal with
a more informed, connected and demanding citizenry, which could lead to an escalating downward spiral
of broken trust and harsher response on either side.
Methodology of the Global Risks Report

The Global Risks Report interprets the difference in risk perceptions over different time frames and the
perceived interconnections among risks, as visualized in the Global Risks Landscape 2016. It is all based
on the Global Risks Perception Survey, which combines the views of different stakeholders. Three risks
interconnection clusters stand out: climate change in relation to water and food crises; the growing
challenges of the rising number of displaced people worldwide; and what the Fourth Industrial Revolution
means in an era of economic risks.
Transition to the New Normal Pathways to Resilience: Effective

Global risks identify that there are no geographic boundaries. However, the Global Agenda Council (GAC)
on Risk and Resilience advocates four key activities for companies, organizations and governments to
build resilience at national and global levels.
g
Delegate roles and responsibilities. During a crisis, it is difficult to have clearly delineated and
understood senior official and c-suite executive roles and responsibilities for risk and incident
management.
Generate Crisis Leadership Characteristics. Organizations that successfully build their base, respond
to and recover from major events also consistently have effective leadership the qualities and actions
of those with authority and influence can empower their entities to be resilient.
Relevant leverage expertise. When confronted with an unforeseen emergency, strategic crisis
managers must be able to quickly identify and mobilize the most relevant and trustworthy expertise
to help understand and respond to the crisis.
Build an environment of integrated risk management and multi stakeholder partnerships. Another
necessary institutional value is the recognition of the scope of global risks and the need for
partnerships to address them.
Number of Economies in which a Risk Appears as the Risk of Highest Concern for Doing Business Risk
Number
g
Unemployment or underemployment
Energy price shock
Failure of national governance
Asset bubble
Fiscal crises
Cyber attack
Deep-Dives into Five Global Risks

There are two reasons that account for the global risks of most concern for doing business in half of
the 140 economies covered: unemployment or underemployment and energy price shock. Then comes
the reason for the failure of national governance, which affects businesses in many ways, including the
failure to stamp out illicit trade. The below deep-dives into the implications for business also explore asset
bubbles, fourth on the global list, and cyber-attacks, among the top three risks in 18 economies.
13
Unemployment or Underemployment
Unemployment or underemployment is viewed as the global risk of highest concern for doing business
in 41 countries, and is among the top five global risks in 92 countries. Unemployment affects business in
multiple ways, from holding back economic growth to threatening social stability. With a growing mismatch
between the skills demanded by a fast-changing jobs market and those possessed by unemployed
workers, businesses are struggling to recruit workers with the capabilities they need. Expected job growth
is concentrated in occupations for which todays workers are inadequately prepared. Following three main
reforms are needed.
g
First, the education systems must be redesigned to concentrate on learning and collaboration. As
technology will handle all the knowledge based work, we need to educate future generations in skills
where humans can still be expected to outperform machines.
Second, while the organizations must work with experts, educators and governments to help education
systems keep up with the needs of the labor market, companies must also fundamentally rethink their
role as consumers of ready-made human capital, obtaining pre-trained talent from schools, universities
and other companies.
Third, governments must extend the education system to restructure the broader enabling environment
for talent. Human capital development depends on a series of interventions across a persons lifetime,
including hiring and firing practices, womens integration, retirement policies, visa regulations, social
safety nets, and, in particular, regulatory support for entrepreneurship and small and medium-sized
enterprises.
Energy Price Shocks to the Global Economy

The term Price shocks can refer to either sudden increases or decreases in the price of energy, whether in
the form of electricity, oil, natural gas or liquid fuels derived from these sources. From 2010 until June 2014,
world oil prices were fairly stable, at around USD 110 a barrel for Brent crude; since then they have ranged
between around USD 45 to USD 60, a plunge that surprised many. Natural gas prices, often indexed to oil,
have followed a similar trajectory. This has resulted in significant shifts of wealth from oil and gas producers
to consumers, meaning lower input costs for industry, lower inflation and more money available to spend
in other sectors.
There is no certainty for oil prices. On the supply side, one key factor is whether or not the Organization of
the Petroleum Exporting Countries (OPEC) and in particular Saudi Arabia will continue with its strategy of
not curtailing production despite price declines. Another factor is the extent to which investment will fall in
response to low prices, leading to a potential rise in unemployment rate of oil-exporting countries. Key oil
and gas producers are estimated to have cut over USD 200 billion in capital expenditure on new projects,
deferring oil and gas projects with reserves equating to 20 billion barrels of oil equivalent.
Failure of National Governance
The outbreak of
asset bubbles
hits businesses
across the
whole economy
particularly where
leverage induces
contagion through
the banking
system.
14
Failure of national governance is viewed as the highest risk to doing business by the executives. This risk
captures the inability to efficiently govern a nation, which is caused by or results in factors such as weak rule
of law, corruption, illicit trade, organized crime, impunity, and political deadlock. Weak national government
is not the result only of poor governance; governance is a multi-faceted phenomenon in which business,
civil society and the general public also play roles.
The national governance creates space for organized criminals and terrorists to profit from illegal trading in
humans, weapons, counterfeit goods, and so on. The cross-sector and transnational nature of these illegal
activities means they pose a risk to all, creating economic, social, and environmental damage at regional
and global levels. Businesses face additional risks as well as costs from operating in countries affected by
poor governance. Both the risks and the costs arise from the difficulties of working in an unpredictable
environment and complying with international standards when fragile governments do not themselves
adhere to international regulatory regimes. These costs can be serious enough to become unsustainable
in the long run.
Asset Bubble
The outbreak of asset bubbles hits businesses across the whole economy particularly where leverage
induces contagion through the banking system. As business confidence falls, so does consumption,
As the price of the

government bonds
increases, its yield
decreases. This
drives investors
into higher-yield
corporate bonds,
raising the risk of a
bubble here, too.
incomes and investment, which can lead to a prolonged recession. The trigger for the global financial crisis,
to take one example, was a widespread default on US subprime mortgages and loss of value of related
securities.
Apparent global economic developments have increased both the likelihood and potential impact of
bubbles. However, as post-recession growth proved elusive, easy monetary policy was maintained or even
stepped up. Low interest rates sent investors on a search for yield, creating an environment that is highly
conducive to bubbles. The impact of another bubble bursting now in a major economy would be especially
damaging because the weakness of the recovery and high levels of government debt mean there would be
little remaining policy space for further stimulus. Asset bubbles can never be identified with certainty while
they are building up, as there is always a narrative of this time is different. Nonetheless, when attempting
to evaluate the risk of a bubble bursting, three types of potential bubbles can be distinguished:
-Equity bubbles: They often have an adverse effect of low interest rates, as investors look to stock markets
for higher yields than they can get from fixed income assets. Companies can use their highly-valued stock
to make cross-border acquisitions. However, when the bubble bursts, they can in turn become takeover
targets for companies in other countries.
-Real estate bubbles: They are not usually a major concern for companies while they are inflating, though
they make office and factory space more expensive. However, because banks play a major role in real
estate finance, the bursting of a real estate bubble can have catastrophic impacts on business finance, as
seen recently in Ireland: with banks struggling, credit can dry up completely and companies find it hard to
finance their operations.
-Government bond bubbles: Central banks might purchase the government bonds in bulk and new
liquidity requirements increasing demand among private sector banks. As the price of the government
bonds increases, its yield decreases. This drives investors into higher-yield corporate bonds, raising the
risk of a bubble here, too. In the short term, this can be good news for corporate issuers, but the ending of
quantitative easing programs could rapidly make it harder for businesses to raise capital. Some observers
have raised concerns about whether current market structures can deal with the resulting large swings in
demand for bonds, potentially triggering severe volatility in the financial system.
Cyberattacks
All the business operations national infrastructure, public and private services and amenities, and personal
finances are increasingly managed via some form of computer network and are consequently prone to
attack. The Internet of Things is a growing reality, introducing new efficiencies as well as new vulnerabilities
and interconnected consequences. Recent technological advances have been beneficial in many respects,
but have also opened the door to a growing wave of cyber-attacks including economic espionage,
cybercrime, and even state-sponsored exploits, that are increasingly perpetrated against businesses.
Attempts to detect and address attacks are made harder by their constantly evolving nature, as perpetrators
quickly find new ways of executing them. Businesses trying to match this speed in their development of
prevention and response methods are sometimes constrained by a poor understanding of the risk, a lack
of technical talent, and inadequate security capabilities. Defining clear roles and responsibilities for cyber
risk is crucial. Outdated laws and regulations inhibit governments ability to capture criminals but also to
expedite the often lengthy procedure of elaborating and implementing legal and regulatory frameworks
to reflect evolving realities. The sophisticated threats of government-sponsored economic espionage also
exceed the defensive capabilities of many commercial enterprises, which are more and more frequently
looking to other governments to intervene.
Individual businesses must think beyond their horizon in order to address global risks. Businesses should
stand strong to ensure continued operation and survival in the face of risks. At the same time, the clear
role for collaboration among public and private sector actors becomes evident, for example, to develop
better cybercrime prevention methods, to establish cybersecurity norms for both governments and
industry, and to align international approaches to enforcement and establish industry norms. Above
all, it is in the key interest of businesses to find new ways to partner with governments to address
global risks. Many risks, ranging from energy security to unemployment, can only be addressed
through diverse stakeholders recognizing the need for joint action. Such collaboration requires the
identification of key risks and related interests and strong alignment and robust agreement among
business and other stakeholders on the need to address them.
15
Exclusive Feature
By 2020 Produce 200 Startups with 10 Companies

Having 20 Million U.S. Dollar Valuation
Mustafiz R Khan
CEO, SD ASIA
ur journey started about three years ago when we started asking ourselves what we can do to build
the startup community. Few of the enthusiastic people from the community gathered and started
a conversation about startups. The community came up with an idea to host a 6 day startup event
called Startup Bash in 2013 which was followed by a documentary called Startup Dhaka.
Now few years later, we feel that collectively we should have a roadmap to build for the longer term.
General public tend to critique the government, but in last few years we have seen that they actually have
gotten heavily involved now in promoting tech entrepreneurship. It has laid down few ambitious goals and
took major initiatives to drive digital eco-system in Bangladesh.
Building a thriving ecosystem requires close collaboration between the public and private sectors. As we
move along this path, we predict that we will develop a closer working relationship between the public
and private sector. While we both have common interest in developing the startup community, perhaps
the best way forward would be to establish a common goal. We are proposing a vision statement of by
2020, we want to produce 200 startups with 10 companies having 20 million U.S dollar valuation. It is not
enough to just announce ambition statement; we must have proper action behind it. We are proposing few
suggestions that can help translate this ambition to a meaningful engagement.
Tax Incentives
We propose Tax incentives to encourage investors to risk their money in startups. Since access to startup
funding is an issue, tax incentive to encourage people with considerable risk appetite can be a good
alternative for the local market.
Matching Government Grant for Fund Raised by Startups
Singapore government has launched initiative like Business Angels Scheme (BAS), which matches any
investment up to SGD 2 million (USD 1.32 million) that a startup raises from a business angel investor
through its investment arm SPRING SEEDS Capital Pte Ltd. Bangladesh government has similar grant for
technology companies called Innovation Fund, which is really not promoted among the community. This
16
fund could be easily be used to match with fund raised by local startups to provide financial backing that
the startups require so desperately.
Regional Connectivity
India, Singapore, Vietnam, Malaysia, Thailand, Indonesia and Philippines have a growing startup community.
Privately a lot of local startups are connecting regionally, but from government level we need to connect
as well. These markets have policy frameworks that we can use and best practices that we can implement.
We need to bridge the stakeholders from the regional startup community for idea sharing to better support
the eco-system. The government can also provide subsidies to participate in the regional tech events to
the startups.
Bridge the Academia with Entrepreneurship
The
Telecommunications,
Payment providers,
logistics, Service
companies and
Government (ICT
Ministry) should
support the common
goal of helping to
build 200 startups
in next 5 years with
total valuation of 20
million U.S. dollars.
The mindset of young founders needs to change when they are learning at schools and universities.
Government education policy needs to align with their vision of digital ecosystem so that there is a pipeline
for talents in the private sector. Its a long term process but in the short term there has to be a way to
make the education system more relevant for the ICT sector. One way the government can encourage
students to get more relevant job experience in early stages is by subsidizing paid internship programs in
Tech companies. This way both students and tech companies benefit from developing talent that is more
prepared for the future.
Contribution from Most Important Stakeholders
The Telecommunications, Payment providers, logistics, Service companies and Government (ICT Ministry)
should support the common goal of helping to build 200 startups in next 5 years with total valuation of 20
million U.S. dollars. The 5 parties are integral parts in the making the machine move in the right direction.
The telecommunications, need to make the data service cheaper, payment providers need to make online
payment secured and seamless, logistics services need to be reliable and designed to support cash on
delivery system, which is a dominant payment solution in South East Asia, service companies need to start
solving real problems that is affecting the bottom of the pyramid, and ICT ministry needs to work with all
the parties so that real change can happen.
17
New Initiatives
in Market
eCourier: Bangladeshs First Bicycle-Based

Courier Service
ets take a deeper look at eCourier, Bangladeshs first bicycle-based courier service. It is no lie that the
modern world has a preference for greener methods, and eCourier excels at it. The companys main
service is to delivery documents, files or small parcels for e-Commerce sites. E-commerce is their primary
group of customers and the prime targets, but non-e-commerce customers are served as well.
The environmentfriendly startup,

eCourier,
also provides
a premium
specialized postal
service with digital
tracking system.
The companys mission is to provide a convenient delivery service for its customers and clients. The
environment-friendly startup, eCourier, also provides a premium specialized postal service with digital
tracking system. This premium track and trace software will enable the customers of eCourier to track their
parcels real-time location from their computers, android application, or via text messaging. The company
also provides a same day delivery, and they have invested heavily to make sure of it too. Their employees
work in two shifts to make sure that they are true to their promise of same-day delivery. Thats not the end; the
company has a door-to-door service as well. eCouriers door-to-door service might be something customers
yearn for in the midst of the intensifying Dhaka traffic.
eCouriers service is not only green; it is efficient as well as customer satisfying. Apart from their real-time
tracking, one-day delivery, environment-friendly delivery, cell-phone notification, free Android application,
and reasonable price, they also follow up on customers after the product has been delivered. They also have
a 24-hour support system that answers any queries made by the customers via email or their hotline. eCourier
has been very active both environmentally and commercially; eCourier was Gold Sponsor of Uddokta Hat
2013, the company provides professional product delivery service to Click BD, BeautyShop BD, eBiponon,
and T-Zone.
In a nutshell, eCourier is a growing startup and their vision is to increase their client base by 50% every year
and develop into a profitable startup business within the first two years of operation.
(This article was originally published by SD ASIA. SD ASIA is a content and event platform for startups,
entrepreneurs and investors.)
18
Entrepreneurs
Assistance Tool
Jewelry Business
he jewelry business runs under the Gold (Procurement, Storage

and Distribution) Order, 1987.
SL. No.
Category
License fee (in taka)
1. Dealer: dealer means a person who, directly or
500.00
300.00
200.00
otherwise, carries on the business of procuring, storing,

distributing, making, melting, refining, processing, converting,
gold or lending against gold and includes-
A company, bank, society registered under the societies Registration

Act, 1860 (XXI of 1860), co-operative society incorporated under any
law with respect to co-operative societies, firm, money-lender or
other association of persons which carries on such business, or-
1,000.00
(2) All applications for renewal of license shall be made in Form B to

the Director-General at least thirty days prior to the expiry of the
validity period;
(a) buys or accepts gold for the purpose of making ornaments, or
(3) The renewal fee shall be the same as that of license fee.
(b) makes, manufactures, prepares, repairs or polishes ornaments, or
(4) The license fee and the renewal fee shall be deposited in the
(c) process, melts or converts gold for the purpose of making
Bangladesh Bank or Government treasury or sub-treasury
ornaments, or
(d) sells, supplies, or distributes ornaments or other gold for the
purpose of making ornaments, to its members;
(e) gold means gold, including its alloy (whether as ingot, melted
or remelted, wrought or unwrought), in any shape or form, of
a purity of not less than nine carats and includes article and
ornament, whether plain or engraved with pearl, real or imitation
stone;
(1) No dealer shall commence, or carry on, business or lend against
gold unless a license is obtained from the Director-General under
paragraph 5.
(2) A dealer shall not, without the prior permission in writing of the
Director-General, carry on business in any premises other than
the premises specified in his license.
(3) Every dealer shall stamp every piece of article or ornament made,
manufactured or prepared by him indicating the name or mark
of the dealer.
2. Grant or renewal of license and license fee(1) An application for a license shall be made in Form A to the
through challan under the Head 42- Trade and Commercelicense fee for Distribution of Gold and one copy of the challan
shall be submitted along with the application form.
(5) All licenses, unless suspended or cancelled, shall remain valid
during the financial year, expiring on the thirtieth day of June
every year.
3. Declaration and returns-(1) every dealer shall make a monthly
declaration in Form D.
4. Display of license - Every dealer shall display his license at
a conspicuous place of the premises in which he carries on
business.
5. Cash Memorandum(1) Every dealer shall, at the time of making any transaction like
buying, selling making, repairing, polishing of gold, ornament
or article, issue a cash memorandum in duplicate containing
particulars of the transaction including description, weight and
Director-General who may, after making such enquiry as he
value of the gold, ornament or article, as the case may be, name,
deems fit, grant a license in Form C on payment of the fees in the
address and signature of the buyer or seller, as the case may be,
following categories-
and the duplicate copy of the cash memorandum shall be kept
(a) Category A- Dealers having annual transactions exceeding 100

kg. (1,00,000 grams) of gold;
(b) Category B- Dealers having annual transactions exceeding 50
kg. (50,000 grams) but not exceeding 100 kg. Of gold;
(c) Category C- Dealers having annual transactions exceeding 20
kg. (20,000 grams) but not exceeding 50 kg. Of gold;
(d) Category D- Dealers having annual transactions exceeding 20
kg. (20,000 grams) of gold.
by the dealer.
(2) The cash memorandum shall also indicate separately the ratio of
pure gold (Tejabi), alloy (Khad) inlays (Meena), fillings (Panmora),
stones, if any, duties and taxes, if any, and making or servicing
charges.
6. Price to be exhibited by the dealer - The dealer shall exhibit in
a conspicuous place of premises the price of gold.
19
Spotlight on
Startup
SOLshare: Lets Share the Sun
haka-based ME SOLshare Ltd. provides improved electricity access to low-income people living in
rural Bangladesh. Through an e-interview, Sebastian Groh, the current director of SOLshare, told us
about this great initiative to help Bangladesh achieve affordable electricity. Here are his responses:
1) Tell us a bit about yourself.

Sebastian is living and working in Bangladesh as the director of two newly founded companies, ME
SOLshare Ltd. and ME Fosera BD Ltd. He is further project manager at MicroEnergy International (MEI) since
2009, a Berlin-based consulting company focusing on the linkage between microfinance and sustainable
energy supply. Along his professional work, Sebastian is currently pursuing his PhD on the role of energy in
development processes, energy poverty, and technical innovations.
Previous to his work at MEI, Sebastian worked on the trading floor at Commerz bank in Frankfurt, at
ProCredit in El Salvador and Planet Finance in India. Sebastian holds a Bachelor in Economics from University
of Mannheim (Germany) and Universidad Carlos III de Madrid (Spain) as well as a Masters in International
Economics from the University of Goettingen (Germany), University of Pune (India) and Universidad Jos
Matas Delgado (El Salvador).
Sebastian received an executive training on strategic leadership for microfinance from Harvard Business
School and is a Stanford Ignite Fellow of 2013 from Stanford Graduate School of Business.
2) Tell us a bit about your company.
MESOLshare is a Dhaka-based company founded in 2014. SOLshare is a platform provider for improved
electricity access to low-income people in rural Bangladesh. Our box can interconnect new and existing
solar systems to form microgrids. It specifically targets Bangladeshi households and small businesses in
densely populated off-grid villages. These communities need flexible, stable, and sufficient electricity supply
20
Nearly, 4 million
solar home
systems have
been installed in
Bangladesh. These
systems, however,
do not reach the
poorer segments
of the rural areas
mostly for reasons
of affordability.
for lighting, phone charging, entertainment and business generating activities at an affordable price point.
Nearly, 4 million solar home systems have been installed in Bangladesh. These systems, however, do not
reach the poorer segments of the rural areas mostly for reasons of affordability. Also, each of these systems
produces surplus power that goes completely unused due to system design and the advent of super
efficient direct current appliances. At the same time, people do not have enough energy for productive use
engagements.
3) What inspired you to undertake such an initiative?
After having worked for a couple of years in a Berlin-based consultancy, MicroEnergy International, on
the inter-linkage of microfinance and decentralized energy supply, in 2013, Sebastian participated in the
Stanford Ignite Program- Powering Innovation and Entrepreneurship, where his idea behind SOLshare was
selected and developed into a business model. After receiving very positive feedback from a panel of judges
at the end of the program, he pursued SOLshare and flew to Bangladesh to set-up the company.
4) Could you tell us a bit about the services of ME SOLshare?
MESOLshare has developed a smart grid concept that is targeted for the Global South and has been tailored
to the Bangladeshi market: a smart DC microgrid that manages and meters power flows between rural
households and businesses. Solar panels and decentralized storage systems are added incrementally in a
step by step manner so that supply is guaranteed while avoiding sunk costs of earlier investment. In addition
to technological reasons for leapfrogging, market models that accompanied the mobile phone revolution
such as sharing phones may serve as a precedent for these kinds of smart grids. The integration of productive
use is just one of many logical steps of the post-installation development of every SOLshare smart nano-grid.
5) Whats the future for your project? What do you hope to achieve with your business? Are you currently
looking for funding?
By 2019, 550,000 people can borrow electricity at an affordable cost, 2.2 million people can create additional
income sources, 2.75 million people can live with less indoor smoke, and 10,000 tons reduction in CO2
emissions have been achieved.
SOLshare was recognized internationally and awarded as a finalist in the 2014 Best Climate Practices Contest
on Energy Poverty Alleviation by the International Center for Climate Governance.
(This article was originally published by SD ASIA. SD ASIA is a content and event platform for startups,
entrepreneurs and investors.)
21
16%
2058
11%
8%
11%
6194
10%
38%
11%
916
38%
16%
7336
Sector-wise import as of July-November 15 (%)
Monetary and credit developments as of November 2015 (in Billions of BDT)
2%
42%
40%
2%
3.10
2.60
2.10
1.60
1.18
1.34
1.30
1.32
1.44
1.39
1.35
1.20
1.10
1.10
0.60
0.10
0.00
Feb
1.17
1.29
Mar
1.23
Apr
1.22
May
1.29
Jun
1.49
Jul
1.17
Aug
1.34
Sep
1.02
Oct
Remittance increased by USD 0.17 billion in December'15 compared to November'15
22
Category-wise breakdown of exports July-December 2015
14%
0%
5.17
9%
5.21
State owned Banks
12%
5.06
5.04
37%
4.87
4.84 4.83
4.87
4.79
4.77
4.82
4.77
42%
Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 April-15 May-15June-15July-15 Aug-15 Sep-15 Oct-15
7.05%
6.37%
6.20%
6.48%
6.23%
6.07%
6.01%
6.11%
6.12%
6.08%
6.14%
6.80%
6.32%
6.07%
6.15%
6.67%
6.35%
54.2%
6.56%
6.73%
6.06%
5.92%
In November 2015, the

transaction through
mobile banking
channels reached BDT
14,915.59 crore a
whopping 54.2%
year-on-year
5.89%
5.72%
5.48%
Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15
Aug-15 Sep-15 Oct-15 Nov-15 Dec-15
Inflation rate in December 2015 inclines as non-food inflation increases
23
Economy
Bangladesh is
on track to log in
the second best
economic growth
figure this year out
of 93 countries,
forecasted
Bloomberg.
Bangladesh to be second best performer in 2016 l

According to American news organization Bloomberg, Bangladeshs economy will grow at 6.6% in 2016, a joint
second rank with Vietnam. The rate is the second fastest pace after India, which is expected to clock in 7.4%
growth. Bangladesh is on track to log in the second best economic growth figure this year out of 93 countries,
forecasted Bloomberg.
The forecasts are the median estimates from each countrys latest survey conducted between October and
December 2015. China came in fourth with its 6.5% growth forecast. Deflation-pained Japan is projected to
grow 1% this year, lagging behind many of its neighbors. For the worlds worst-performing economies, no good
will come from New Years resolutions to do better.
For many, 2016 will only bring more disappointment, said the economists surveyed by Bloomberg. The forecast
by Bloomberg, which is calendar-year based, is similar to the World Banks recent forecast of 6.6% growth for
Bangladesh in 2016. The government, however, has set the growth target of 7% for fiscal 2015-16, against the
WB and the International Monetary Funds forecast of 6.5%. The strong forecast comes at a time when the global
economy is going through a recession.
Bangladesh economy shows flexibility l

Economic fundamentals signify impressive growth prospects for Bangladesh claimed by the banking giant Citi in
its annual market update. Showing resilience, the Bangladesh economy grew 6.51% in fiscal 2014-15, despite the
political front presenting tough challenges at the beginning of 2015. The services sector contributed the most 3%
followed by the industrial and agricultural sector with 2.7% and 0.5% respectively.
EXPORT PERFORMANCE
(IN BILLION OF USD)
2015
2014
Dec
Nov
Oct
Sep
Aug
Jul
Jun
May
Apr
Mar
Feb
Jan
1.95
2.41
2.37
2.84
2.74
3.2
2.37
2.55
2.76
2.16
2.62
2.98
3.06
2.81
2.84
2.72
2.4
2.41
2.59
2.41
2.51
2.39
2.88
2.75
Source: Export Promotion Bureau
According to Citi, the country has already achieved growth in excess of 6% over the last five years. However,
the focus has now shifted towards moving to the next level and stepping up the growth rate to 8% by 2020 as
envisaged under the countrys seventh five-year plan. Annual average inflation decreased to 6.2% at the end of
2015, the lowest level since February 2013; point-to-point inflation hovered between 6 % and 6.4% throughout
the year before closing at 6.1% in December.
Food inflation slowed to 5.48% in December 2015 from 5.86% a year ago, whereas non-food inflation rose to
7.05% from 6.48% over the same period. The statistics showing rising import of capital machinery orders provide
an indication of growing investments and an expansion of production capacity. However as import growth
outstripped export growth by a significant margin in fiscal 2014-15, the country posted a trade deficit of over USD
10 billion.
Citi claimed that most Bangladeshi workers are employed in the Middle Eastern and Asian countries, the currencies
of which have depreciated against the US dollar, whereas the taka held strong, which resulted in workers sending
home lower amounts in remittance. Foreign exchange reserves climbed to a record USD 27.45 billion at the end of
2015; marking an 18.7% year-on-year increase and 8.8% increase from the beginning of fiscal 2015-16.
Remittance growth slackens in 2015 l

The remittances inflow recorded a slow growth in the just-concluded calendar year despite a significant rise in
outbound jobs taken up by Bangladeshi nationals. According to Bangladesh Bank (BB), Bangladeshi expatriate
remitted USD 15.31 billion in 2015, marking a 2.47% growth comparing to that of the previous calendar year.
Some 538,667 Bangladeshi workers went abroad with jobs as of December 23, 2015, reflecting a 30% growth,
according to the Refugee and Migratory Movements Research Unit (RMMRU) report. The number was 35%
higher than that of 2013. Remittances from Bangladeshi nationals working abroad were estimated at USD
1.31 billion in December last, up by USD 165.31 million than that of the previous month. In November 2015,
remittance was USD 1.14 billion, according to BB data. Currently, 34 exchange houses are operating across
the globe and have set up 1123 drawing arrangements abroad to expedite the remittance inflow, according
to the central banker.
24
The project also

includes USD 2
million in technical
assistance from
Japan Fund for
Poverty Reduction
to help establish
incubation facilities
at educational
institutions
to promote
entrepreneurship
and support
entrepreneurs
development units
at Bangladesh Bank.
The amount of inward remittance in terms of US dollar showed a downward trend in 2015 mainly due to
appreciation of Bangladesh Taka against the US currency. For this reason, workers also got discouraged in
sending their hard-earned money through legal channel, the RMMRU stated. Bangladeshs foreign exchange
reserves hit a record USD 27.49 billion at the end of December; the central bank said on Sunday, fuelled by
steady exports and remittances, as per the statement by Reuters. The slower pace of import growth, on the
back of a fall in global commodities prices, also helped boost reserves about 23% over the corresponding
period of last year.
ADB to provide USD 200 million loans for SMEs in rural area l
The Asian Development Bank (ADB) will provide USD 200 million in loans to small and medium-sized enterprises
in rural Bangladesh. The credit facility will particularly target firms run by women, especially those engaged in
subsistence trade and retail activities and are typically less educated and have less access to SME finance than
men, stated by the Manila-based bank. According to the principal financial sector specialist at the ADBs South Asia
Regional Department, rural firms and firms run by women struggle to get loans from banks. As a result, both they
and the Bangladesh economy lose out.
ADB wants to help cottage industries and SMEs to expand and flourish, including those operated by women. The
small firms outside the metropolitan areas of Dhaka and Chittagong will be targeted by the initiative; with at least
15% allocated for women entrepreneurs. There are about 7.2 million SMEs in Bangladesh, which account for 90%
of all companies and employ 70-80% of the countrys non-agricultural workforce. In 2014, SMEs accounted for 25%
of Bangladeshs gross domestic product and 40% of the manufacturing output.
The project also includes USD 2 million in technical assistance from Japan Fund for Poverty Reduction to help
establish incubation facilities at educational institutions to promote entrepreneurship and support entrepreneurs
development units at Bangladesh Bank. It will also help set up dedicated womens desks in financial institutions,
and strengthen women entrepreneurs ability to access available credit through financial and legal literacy, as well
as managing their enterprises.
Excess liquidity cuts call money rate in 2015 l

The inter-bank call money rate has fallen sharply in 2015, as liquidity soared in the banks, according to the USbased Citibank NA Bangladesh statement. All through the year, the banks deployed the excess liquidity with
the Bangladesh Bank (BB) through reverse repo operations. With low demand for domestic credit as many
corporates resorted to foreign borrowing due to lower interest rates, the inter-bank money market volumes
remained low, and interest rate dipped, as liquidity soared in banks, as per the foreign bank.
The weighted average call money rate, which was at 8.57% in January 2015, plunged to 3.69% by the end of
the last calendar year, according to the update. Meanwhile, the overall excess liquidity with the commercial
banks stood at around BDT 1.20 trillion as of December 10; however a major portion of the funds has been
invested in the risk-free government securities.
The excess reserve, generally known as excess over daily minimum cash reserve requirement (CRR) with the
central bank, stood at around BDT 37 billion. From mid-October, the BB squeezed acceptance of reverse repo
bids, and suspended it altogether from November 16, 2015. The central bank changed its mode of absorbing
excess liquidity by stepping up 30-day BB bills bid acceptance, which however, yields a lower rate compared
to reverse-repo rate of 5.25%, putting more pressure on the call money rate, according to the update.
Selected Economic Indicators l

Item
Foreign Exchange Reserve (USD)
Workers Remittances (USD)
Revenue Collection (BDT)
Broad Money (M2) (BDT)
Reserve Money (RM) (BDT)
Total Domestic Credit (BDT)
Credit to Private Sector (BDT)
Period/As of
Jan'16
Dec'15
Oct'15
Nov'15
Nov'15
Nov'15
Nov'15
Value/ bn
27.15
1.31
112.29
8251.82
1576.51
7302.76
6039.23
Period/ As of
Dec'15
Nov'15
Sep'15
Oct'15
Oct'15
Oct'15
Oct'15
Value/ bn
27.35
1.14
127.92
8202.57
1640.00
7234.53
5946.77
+/(-)%
-0.73%
14.97%
-12.22%
0.60%
-3.87%
0.94%
1.55%
Source: January 2016, Selected Economic Indicators, Bangladesh Bank
25
Trade
Export earning booms in 2015 l
EXPORT EARNINGS (IN

BILLION OF USD)
33
32.37
32.5
32
31.5
31
30.5
30.41
30
29.5
29
2014
2015
The total export earnings in 2015 stood at USD 32.37 billion which was USD 30.41 billion in 2014, according to
the Export Promotion Bureau (EPB). Bangladesh registered a modest 6.4% growth in just concluded calendar
year, 2015, over the previous year, 2014. Due to the enhanced performance of apparel sector, exports earnings
recorded higher growth during the first half (H1) of the current fiscal year FY 2015-16, according to the
regulatory body.
The earnings also surpassed the target for the period by 1.38%. The earnings from knitwear items rose by 6.11%
to USD 6.43 billion in H1 of the current fiscal year compared to the corresponding period of FY 15. In December
exports of the apparel products, knit and woven, recorded the highest amount worth USD 2.67 billion in single
month during the last two years. On the other hand, earnings from exports of home textile in the first six months
of this fiscal increased by 16.68% to USD 348.43 million during the same period of last fiscal.
As per EPB statement the regulatory body hoped that the positive growth would continue in the coming
months, and the country would be able to achieve the targeted export earnings. Bangladesh Garment
Manufacturers and Exporters Association (BGMEA), attributed the ongoing safety initiatives, entrepreneurs
efforts to look beyond the traditional markets, and manufacturing apparel products with more value addition
for such export growth.
Apparel export climbed in 2015 l

In 2015, the readymade garment (RMG) sector of Bangladesh confronted its highest ever export earnings,
even though it faced twin industrial disasters of Rana Plaza collapse and Tazreen Fashions fire previously.
From January to November, garment exports raked in USD 26.26 billion, which is already the highest figure
recorded by the sector at any given time, according to data from the Export Promotion Bureau (EPB). In
2014, the sector had its revenue of USD 24.53 billion in exports. Exports grew phenomenally in the months
of October and November this year by 18.40% and 14.74% respectively. In the year ending on July 31, 2016,
Bangladesh may import a record 5.75 million bales (each bale weighs 480 pounds or 218 kilograms) of the
fiber, up 6.5% from a year earlier, according to the United States Department of Agriculture. The garment
makers were also heartened by the demand from new destinations this year, which accounted for about USD
5.5 billion of the export earnings.
The slide in major

currencies like
the euro and the
US dollar in 2015
also impacted
Bangladeshs
earnings from
garment exports.
The garment manufacturers are now optimistic regarding this years export revenue. Their confidence
was boosted by three main following factors shifting of garment business from China to Bangladesh, the
historically low price of cotton and the gaining back the confidence of the international retailers regarding the
structural soundness of Bangladeshi garment factories. Two factory inspection agencies, engineers of Accord
and Alliance, found less than 2% of the factories to be risky. Bangladesh Garment Manufacturers and Exporters
Association (BGMEA) stated that it can be expected that 2016 will be better than 2015 as all the factories have
already been inspected and are safer now.
Of the new export destinations, Australia, Japan, South Korea, Russia, Brazil, Chile, China, India, Turkey, Mexico
and South Africa are among the most promising countries for Bangladesh. The slide in major currencies like
the euro and the US dollar in 2015 also impacted Bangladeshs earnings from garment exports. Bangladesh
earned nearly USD 3 billion less from exports in 2015 due to a steep fall of the Euro.
Capital machinery import records substantial rise l

The import of capital machinery sustained a hefty growth in the first five months of the current fiscal year (FY),
2015-16, amid a marginal growth in the countrys overall imports. The actual import in terms of settlement of
letters of credit (LCs) grew by 2.48% to USD 16.60 billion during the July-November period of FY 16, from USD
16.20 billion in the same period of the FY 15, according to the central banks latest statistics.
On the other hand, opening of LCs, generally known as import orders, dropped by 1.46% to USD 17.48 billion
26
in the first five months of FY 16, from USD 17.74 billion in the same period of FY 15. The existing trend of
overall imports may continue in the coming months also, if the downward price of essential commodities,
including petroleum products, persists in the international market.
Import of capital machinery or industrial equipment used for productions rose by 20.10% to USD 1.38 billion
during the first five months of the current FY, against USD 1.15 billion of the same periods of FY 15. Higher
imports for power and energy, food processing, garment, pharmaceuticals, plastic, printing, packing and
telecom industries have contributed to raise the overall capital machinery imports during the period under
review, according to the central bank.
Australian ban on air cargo detriments Bangladesh business l

GARMENT EXPORT
TO AUSTRALIA
(IN MILLION OF USD)
600
533.63
500
428.44
430.76
Bangladesh uses the seaways to send most of the consignments to Australia, stated Bangladesh Garment
Manufacturers and Exporters Association (BGMEA). The restrictions apply equally to cargo carried on
passenger and freight aircraft, Australias Department of Infrastructure and Regional Development stated on
December.
BGMEA leaders sat with Australian retailer Kmart, and two other clothing companies Woolworths and Target
that have outlets in Australia. The members of the BGMEA have forged good business relations with the
Australian retailers and have to send export samples regularly. There is no problem in sending cargo by ship,
but sending samples by air has become an issue for exporters.
400
307.54
300
200
100
0
Australias embargo on air freight from Bangladesh is hurting business activity as Australia banned air cargo
from Bangladesh, Syria, Egypt, Yemen and Somalia as a preventive security measure from December 19. The
embargo, which bans anything heavier than 500g, will remain in force until further notice.
2011-12 2012-13 2013-14 2014-15
Last fiscal year, Bangladesh exported products worth USD 606.88 million to Australia, with apparel items
accounting for 88% of the total, according to the Export Promotion Bureau (EPB). At present, Bangladeshi
garment enjoys zero-duty access to Australia, one of the emerging markets for local exporters.
Apparel exports to US remain flexible l
GARMENT EXPORTS TO
DIFFERENT REGIONS IN
2015 (IN BILLIONS OF USD)
18
16
14
12
10
8
6
4
2
0
15.9
5.66
4.06
0.97
EU
US
0.11
11 new
Canada
Rest of
destinations
the world
The US continues to be the single largest export destination for Bangladeshs garment items, accounting
for 21.28% of the shipments in 2015. The shipments to the American market fetched USD 5.66 billion of the
sectors USD 26.6 billion export earnings last year, according to data from the Export Promotion Bureau.
Garment exports to the US rose 13% year-on-year in 2015. The European Union, the trade bloc of 28 nations,
accounted for 59.73% of the shipments last year, raking in USD 15.9 billion.
Countrywise in the EU, garment exports to Germany brought in USD 4.36 billion, the UK USD 3.32 billion, Spain
USD 1.73 billion, France USD 1.63 billion, and Italy USD 1.24 billion, among others. Apparel export growth to
non-traditional markets was also noticeable in 2015. The share of non-traditional markets in the garment
sectors export earnings now stands at 15.29%, which was only 7% in 2009. In 2015, garment products worth
USD 4.07 billion were sent to the non-traditional markets.
Exports to Australia have also grown significantly, 32.09% year-on-year. According to Bangladesh Garment
Manufacturers and Exporters Association, the second half of 2015 was good for the sector. Although 2015
started on a dismal note, an 8.21% export growth was registered in the end, while the devaluation of the euro
negatively impacted earnings.
27
Business
Mobile cash transfer inclines 54% in November 2015 l
In November 2015, the transaction through mobile banking channels reached BDT 14,915.59 crore a
whopping 54.2% year-on-year, meaning the use of mobile financial services is rising fast, as people are
becoming increasingly comfortable with the banking platform, according to data from Bangladesh Bank.
MFS TRANSACTIONS (IN

CRORE OF USD)
16000
14915.59
14000
12000
10000
9674.46
8000
6000
4000
2000
0
2014
2015
As the market size is huge and mostly untapped, the figures would grow much higher if proper rules are
implemented in the industry, according to industry experts. The daily average transactions during the
month stood at BDT 497.19 crore in contrast to BDT 322.48 crore a year earlier. In November 2015 number of
transactions was 11.09 crore from 6.09 crore in November 2014. Since 2009, 28 banks had taken permission
from the central bank to roll out this service, of which 20 banks have already launched the service.
At present, there are 3.12 crore registered mobile financial service clients in Bangladesh, with 1.25 crore of
them being active users. The highest growth came in the salary disbursement segment. Salaries amounting
to BDT 140.91 crore were disbursed through the platform in November 2015, which is more than double from
a year earlier. Person-to-person transactions are increasing in popularity too. It increased 43.41% year-on-year
to BDT 2,579.55 crore in November 2015. Utility bill payment saw 79.91% year-on-year growth in November.
SMEs drive economy to advanced growth l

The number of economic units has doubled between 2003 and 2013 riding on the fast expanding nonfarm activities across Bangladesh, according to the governments latest census. In 2003, the number of
economic units was 37.08 lakh. It swelled to 78.18 lakh in 2013, according to the Economic Census of 2013.
The economic units have increased 71% since 1986, when the first economic census in the country took
place. The census conducted between March 31 and May 31 of 2013, was released by the Bangladesh
Bureau of Statistics in Dhaka.
More women are engaged in economic activities. It has given a clear picture of the employment situation in
the non-agricultural sector. Non-agricultural employment rose 6% on an average every year between 2001
and 2013, whereas permanent establishments went up 4%. It has been cleared that the micro, small and
medium enterprises are the main forces of the economy.
Unlike in the past, rural families are no longer engaged in farm-based economic activities alone. As a result,
the division between the rural and the urban settings is diminishing. Microcredit has played a role to this
effect. So, all necessary assistance should be provided to them so they can flourish.
Costlier jute sacks enhances rice price l

A sack costs BDT
60-70 per piece,
which means an
extra expenditure
of BDT 1.2-1.4 a
kg, according to
Bangladesh Auto
Major Husking
Mill Owners
Association
(BAMHMOA).
28
In recent times, the government has made it mandatory for millers to use biodegradable jute sacks for
packaging rice in a bid to curb invasion by polythene. Hence, the prices of the rice varieties of the Boro
season began heating up at mill gates for supply crunch of such paddy and a mandatory packaging switch.
A sack costs BDT 60-70 per piece, which means an extra expenditure of BDT 1.2-1.4 a kg, according to
Bangladesh Auto Major Husking Mill Owners Association (BAMHMOA).
The prices of rice varieties like Brridhan-28 and 29, Miniket, Ratna, Parijat and Nayanmoni increased by BDT
1.00-3.00 per kilogram at mill gates and the heat started to be felt in the cities also, as per industry experts.
Better-quality Miniket is selling at BDT 2200 per 50-kg bag at mill gates from BDT 2050, he said. Normal
Miniket costs BDT 1900-1940 per sack.
Badamtoli O Babu Bazar Chaul Arat Malik Samity, an association of rice wholesalers in the city, stated that
the prices at retail level might increase within few days when the older stock would come to an end. Rice
production in the country was the highest-ever 34.7 million tonnes in the financial year 2014-15 against
a demand for 31.0 million tonnes, according to the Bangladesh Bureau of Statistics and the Directorate
General of Food (DGoF).
Mobile banking consumers cross 30 million mark l

NUMBER OF MFS
REGISTERED CLIENTS
(IN MILLION OF BDT)
Nov 15
3.12
Oct 15
Dec 14
2.51
Sep 14
Mar 14
1.5
Nov 13
Apr 13
0.5
0
0.5
1.5
2.5
3.5
The number of clients under Mobile Financial Services (MFS) crossed 30,000,000 in 2015 with a sign of
growing popularity among the mass people. The banks are now focusing on expansion of mobile banking
services as it costs less than setting up branches to reach mass people, resulting in rapid growth of clients
and transaction amount. As the mobile banking business is flourishing rapidly, countrys telecom industry is
also expressing its interest to involve with this business. Bangladesh Bank drafted a new guideline offering
telecom companies to make a new MFS platform associating with banks to make the business more viable.
The new guideline has now become a much-talked about issue among the bankers and the telecom
companies as both parties are not happy with the proposed shareholding structure. Telecom companies
are demanding a telecom-led guideline instead of the proposed bank-led while most of the banks are
strongly opposing the entrance of mobile operators into the business. Although return from mobile
banking business is not so high right now, it has the bright potentiality to become a profitable business,
engaging highest number of clients according to a private bank.
29
Regulatory
News
USD 200 million project to automate state banks l

The government is set to take up a massive automation program with financial assistance from the World
Bank for nine state-owned banks to facilitate the central banks monitoring. The estimated cost for the
program is USD 200 million, of which the WB will provide USD 150 million and the banks the remaining
amount. The approval for the USD 150 million from the WB board is likely to come by March, according to
experts. For modern banking, three-layer software is required. The main component is the core banking
solution (CBS), using which all branches will be integrated online.
The state banks are still in a nascent stage with regards to automation, and the International Monetary
Fund (IMF) has been putting pressure on the government to accelerate the process. The government
has already made a commitment to the IMF that it will complete automation of at least four state-owned
commercial banks by December this year. It would not be possible to complete the automation of the state
banks before the end of 2017 as per the banking sector.
BTRC to monitor internet service costs l

Bangladesh Telecommunication Regulatory Commission (BTRC) is going to inspect the cost components in
providing internet services to determine a pricing guideline for the providers. There is a huge pricing gap
between different operators. To intervene in the market, the regulator must first conduct an analysis of the
pricing process, stated BTRC. The regulator wants to get the correct information which will help to offer the
best possible prices to the subscribers. The regulatory body recently decided to purchase expertise from
InCyte Consulting, a globally recognized company on telecommunication services and regulation, for a
contract of BDT 30 lac.
To intervene in
the market, the
regulator must
first conduct an
analysis of the
pricing process,
stated BTRC.
In 2013, BTRC had approached International Telecommunication Union (ITU), the highest body of global
telecommunication services, to receive consultation for free. However, ITU recommended InCyte Consulting
for this service. BTRC also recommended the government to appoint a consultant for cost modeling of
voice services, short and multimedia messaging, video calls and value-added services.
BTRC negotiates to lower the prices based on all the proposals given by the telecom companies, on
condition of anonymity. The company claimed that the government reduced the internet bandwidth price
to as low as BDT 625 per megabyte last year, which was BDT 72,000 about seven years ago. However, the
operators continued to charge higher rates from the subscribers. The internet service providers claimed
that bandwidth is not the only pricing component, and they have other costs as well. The BTRC launched
the cost modeling study where the real picture can be learnt and packages can be approved based on the
reports findings. Hence, cost modeling study on voice services was run in 2008.
Move to make listed treasury bonds transferable l

The premier bourse has taken a move to make the listed treasury bonds transferable removing the
existing obstacles. Dhaka Stock Exchange (DSE) along with the Bangladesh Bank (BB) to solve the existing
complexities several times, hindering the transactions of treasury bonds. The premier bourse will submit a
formal proposal to the BB soon seeking their support for transactions of bonds.
Presently, the listed bonds are not tradable in absence of any depository institute like Central Depository
Bangladesh Limited (CDBL). The data of all listed tradable securities, other than bonds, are stored by the
CDBL. On the other hand, the BBs MI Module is the only depository system for all kinds of bonds.
That is why the premier bourse is working to ensure the MI Modules connectivity for conducting
the transactions of listed treasury bonds. The MI Module has live settlement system, whereas the post
settlement system is applicable for tradable listed securities. The live or post settlement system for treasury
bonds can be accepted. After submitting the formal proposal, the premier bourse would sit with the central
bank and DP (Depository Participant) Banks. At present, there are 221 treasury bonds listed with the DSE.
The market capitalization of those bonds is above BDT 550 billion, which is around 16% of total market
capitalization of the premier bourse.
30
Industrialists
are likely to get
loans for water
conservation and
management,
waste
management,
resources
efficiency
and recycling,
renewable energy
and energy
efficiency.
BB incorporates USD 200 million green funds for textile and

leather makers l
Bangladesh Bank (BB) is set to form a USD 200 million fund to provide low-cost loans to textile and leather
industries for switching to environment-friendly production. The move comes to help the export-oriented
industries that take advantage of the current proclivity towards green products in the western world.
Textile and leather sectors will initially enjoy low-cost loans from the Green Transformation Fund, which
will be made open to the other sectors later.
Industrialists are likely to get loans for water conservation and management, waste management, resources
efficiency and recycling, renewable energy and energy efficiency. These are only small initial steps, with lots
more to do in our intended countrywide transition to environmentally sustainable output practices and
lifestyles, according to BB.
Earlier in 2009, the BB set up a revolving fund of BDT 200 crore for disbursing low-interest loans by the
banks and other financial institutions on using solar energy, biogas and effluent treatment plants. The
central bank has so far identified nearly 50 green products that are eligible for the green refinance line
available at the BB. The move comes at a time when Bangladesh is making efforts to generate more energy
through renewable sources.
Bangladesh has a capacity to generate 230 megawatts of solar electricity, with a big portion coming from
solar home systems, of which there are over 40 lakhs of them at present, according to a publication by
Bangladesh Solar and Renewable Energy Association (BSREA).
31
International
NYMEX Crude Oil
Futures Close
(Front Month)
Close
65
60
55
50
Oil prices extended their rally in Asia by hopes of extra stimulus measures in the Eurozone and Japan that
could help boost demand in the face of a global supply glut. Prices ended on a buoyant note January 22,
2016, with the US benchmark West Texas Intermediate (WTI) for March delivery soaring 9% to USD 32.19
a barrel, while Brent soared 10% to USD 32.18.
45
40
35
32.19
30
25
The upward momentum continued in Asia on January 25, 2016, with WTI up 46 cents, or 1.43%, at USD
Jan 2016
Nov 2015
Jul 2015
Sep 2015
May 2015
32.65 and Brent 56 cents, or 1.74%, higher at USD 32.74. According to the chief market strategist at CMC
Mar 2015
Jan 2015
Oil prices extend rise above USD 32 l
January 2, 2015 - January 22, 2016
Source: WTRG Economics
Markets Australia, a report showing that private sector business activity in the Eurozone continued to
expand in January boosted hopes for oil demand catching up with the oversupply. Data monitoring
company closely watched composite Purchasing Managers Index (PMI) fell to 53.5 points in January from
54.3 in December. While the figure was an 11-month low it was still well above the 50-point level that
separates growth and contraction in the 19-nation bloc.
China economic growth slowest in 25 years l

Chinas economy grew by 6.9% in 2015, compared with 7.3% a year earlier, marking its slowest growth in a
quarter of a century. Chinas growth, seen as a driver of the global economy, is a major concern for investors
around the world. The International Monetary Fund expected Chinas economy to grow by 6.3% this year
and 6% in 2017. Beijing had set an official growth target of about 7%.
Weaker growth would be acceptable as long as enough new jobs were created. However, some observers
predicted its growth is actually much weaker than official data. Experts stated that any growth below 6.8%
would likely fuel calls for further economic stimulus. Economic growth in the final quarter of 2015 edged
down to 6.8%, according to the countrys national bureau of statistics.
After experiencing rapid growth for more than a decade, Chinas economy has experienced a painful
slowdown in the last two years. It has come as the central government wants to move towards an economy
led by consumption and services, rather than one driven by exports and investment. Some argue that
Chinas GDP growth rate

%, inflation-adjusted
Chinas focus on creating an economy driven by consumption is misplaced. They say as the country
attempts to rebalance its economy, it should focus on productivity in order to sustain high growth.
16
Chinas headline annual economic growth numbers are important to the rest of the world. However other
14
12
monthly economic data as they can provide a more in-depth look at the economy and where it is heading.
10
8
6
Monthly industrial production (IP) and retail sales numbers for China were also released on Tuesday, with
both December numbers coming in just slightly worse than expected. Industrial production or factory
2
0
1980 1985 1990 1995 2000 2005 2010 2015
Source: National Bureau of Statistics of China
32
output expanded 5.9% in December, down from 6% in November. Retail sales grew 11.1%, down from
11.3% in November.
33
Market Roundup
Commodity Market Roundup
Global food price resumed its fall in November after a spike in
October Global Food Price plunging by nearly 19% for 2015 l
245
220
195
170
145
Source: Food and Agricultural Organization
International palm
oil quotations
dropped, as
sluggish global
import demand
coincided with
larger than
anticipated
production in
South East Asia.
The global food price index averaged 154.1 points in December 2015, down 1.5 points (1%) from its revised
November value. Over the full year, the index has averaged 164.1 points, nearly 19% less than in 2014, marking
the fourth consecutive annual decline. Abundant supplies in the face of a timid world demand and an
appreciating US dollar are the main reasons for the general weakness that has dominated food prices in 2015.
Cereal Price averaged 151.6 points in December, down almost 2 points (1.3%) from November. Compared to
2014, the cereal price index shed 29 points, or 15.4%, in 2015.
Price of oils & fats averaged 141.1 points in December, up 2.9 points (2.1%) from November. For 2015 as a whole,
the Index averaged 147 points, down 19% from 2014 and representing a 9-year low.
Dairy products averaged 149.5 points in December, down 1.6 points (1%) from November. The decline stemmed
from a fall in prices for milk powders, as those for butter rose and those for cheese were unchanged. The Dairy
Index averaged 160.3 points in 2015, down 63.8 points or 28.5% compared to 2014, marking its lowest annual
average since 2009.
Meat Price averaged 152.1 points in December, down 3.5 points (2.2%) from its November revised value. For
2015 as a whole, the Meat Index averaged 168.4 points, down 29.9 points or 15.1% compared to 2014 (a record
year), and its lowest annual average since 2010.
The price of sugar averaged 207.8 points in December, up 1.3 points (0.6%) from November. Overall, the FAO
Sugar Price Index in 2015 averaged 190.7 points, 21% lower than in 2014.
Global oil market - Monthly Overview l

OPEC BASKET CRUDE
OIL PRICE (USD/
BARREL)
70
60
50
40
30
20
10
0
62.16
56.14
54.06 57.30
45.02
33.99
45.46
Jan 16
Dec 15
Oct 15
Nov 15
Sep 15
Jul 15
Aug 15
Jun 15
Apr 15
May 15
Feb 15
Mar 15
27.73
Source: OPEC
34
Organization of the Petroleum Exporting Countries (OPEC) published its Monthly Oil Market Report on
December 10, 2015. The OPEC Reference Basket (ORB) plunged by almost 17% in December, and its yearly
value almost halved, as persistent oversupply in the oil market coupled with increasing signs of slowdown in
the Chinese economy to exert pressure on the oil markets. In addition, oil prices were being driven downward
by the appreciation of the US dollar and a fall in equity markets.
Less-than-expected seasonal demand due to warmer weather also weighed on prices. M-o-m, the ORB
dropped USD 6.86 to USD 33.64/b, while y-o-y, it was down 48.6% at USD 49.49/b. Crude oil futures declined
significantly for the month and the year. ICE Brent ended December down USD 7.03 to stand at USD 38.90/b,
while Nymex WTI fell by USD 5.60 to settle at USD 37.33/b. On a yearly average basis, both dropped double
digits and for a second straight year, with ICE Brent averaging 2015 down at USD 53.64/b compared to USD
99.51/b in 2014. Nymex WTI plunged by USD 44.20 to settle at USD 48.80/b from USD 93/b in 2014.
Currency Market Roundup

(November, 2015)
Money Market l
The Bangladesh interbank call money rate was around 2.0% 3.0% on January 27, 2016.
Foreign Market l
Local: The USD/BDT market was steady and was range bound as on January 27, 2016.
International: The dollar struggled to gain traction on Wednesday as investors awaited the outcome of a
Federal Reserve meeting for clues on whether bets on a single U.S. interest rate rise in 2016 are justified.
With investors largely in wait-and-see mode before the Fed, Australias dollar was the biggest mover,
hitting a three-week high after a measure of domestic inflation came in slightly higher than expected.
Most markets were choppy, with Asian bourses closing up on the day but European stock markets falling
alongside oil prices. Though the Aussie was up around 0.6% against its U.S. counterpart, other currencies
seen as risky struggled.
The Swiss franc fell to its lowest level since the Swiss National Bank removed the cap on its currency just
over a year ago, trading at 1.1063 francs per euro. Analysts said 1.10 francs had been an important level for
the currency to break through. The dollar index inched down 0.1% to 98.976, nursing a 0.3% loss recorded
on Tuesday and staying well below a seven-week high of 99.799 set last Thursday. The euro was flat at USD
1.0874, while the yen crawled up 0.1% to 118.31 against the greenback.
Treasury Bill/Bond Auction Information l

Auction Date
24-Dec-15
28-Dec-15
28-Dec-15
21-Dec-15
2-Dec-15
9-Dec-15
17-Dec-15
23-Dec-15
23-Dec-15
Tenure & Name of the Securities

30-day BB Bill
91 days T.Bill
182 days T.Bill
364 days T.Bill
2 yrT.Bond
5yr T.Bond
10yr T.Bond
15yr T.Bond
20yr T.Bond
Sale Value (in BDT mn)

8577.404
5955.288
3576.917
6709.258
4200
3709.4
2000
675
3000
Weighted Average Yield (%)

3.25
3.10
4.20
4.50
6.00
6.44
7.39
7.87
8.99
* Sale value not applicable, Face Value used.
Financial Sector Prices l

The spread of weighted average lending and deposit rate increased slightly and stood at 4.81% in
November 2015 from 4.77% in October, 2015
The weighted average call money rate in the interbank market rose to 3.97% in January 2016 from
3.69% in December 2015 due to adequate liquidity in the money market
Bangladesh Bank has changed repo and reverse repo rate at 6.75% and 4.75% respectively, following
a declining revision by 50 basis points effective from January 14, 2016.
Exchange and Forward Rates l (As of January, 2016)

Major Currency Exchange Rates
Major Currency Exchange Rates
BC Sell
BDT
79.00
87.25
114.55
56.70
0.68
79.41
9.38
BC Sell
BDT
57.18
10.36
56.21
21.85
21.50
11.66
264.23
Currency
USD
EUR
GBP
AUD
JPY
CHF
SEK
TT Buy
BDT
78.00
83.25
110.55
53.95
0.65
75.63
8.92
Currency
CAD
HKD
SGD
AED
SAR
DKK
KWD
TT Buy
BDT
54.40
9.86
53.46
20.78
20.45
11.09
251.31
Exchange Rate of Some Currencies

Currency
INR
PKR
LKR
THB
MYR
Currency Per
USD
67.98
104.93
144.05
35.84
4.26
BDT per
Currency
1.15
0.75
0.54
2.19
18.45
Source: Standard Chartered Bank.
35
Insight Analysis l
New passenger-car registrations
2015, % change in registrations* on a year earlier
1.0
1.6
2.0 13.7
21.1 1.9
2.6 17.5
3.2
4.2
2.1
1.6
* Sales for China, India,

Russia & United States,
Includes light vehicles
Includes light
commercial vehicles
Russia
Total, m
Source: ACEA; AEB;

ANFAVEA; Autodara;
Haver Analytics; JAMA;
SIAM
20
10
0
-10
-20
-30
Brazil
Japan
Germany
United
States
Britain
France
China
European
Union
India
Italy
Spain
-40
Growth in the global car market was solid, if not spectacular, during 2015. There was strong demand
in both Britain and America, in part because of low interest rates and improving consumer confidence.
Although volumes are still below their pre-crisis levels, the EU had its best year for new car registrations
since 2009, spurred on by good results in Italy and Spain. China, however, is experiencing a slowdown: the
worlds biggest car market grew at its slowest pace in three years with luxury cars hit particularly hard due
to a corruption crackdown and worries about growth. The falling number of new registrations in Brazil and
Russia is no surprise given the abysmal state of their economies.
International Commodity Prices l

Commodity
Unit
Crude Oil
Gold
Silver
Nickel
Tin
Lead
Aluminium
Zinc
Copper
Barrel
Ounce
Ounce
Tonne
Tonne
Tonne
Tonne
Tonne
Tonne
Price January 22, 2016

(USD/unit)
32.19
1096.25
14.17
8505.00
13400.00
1615.50
1470.00
1473.00
4376.00
Price December 24, 2015

(USD/unit)
38.10
1071.90
14.20
8590.00
14650.00
1747.00
1610.00
1535.50
4665.50
Change +/(-)
-15.51%
2.27%
-0.21%
-0.99%
-8.53%
-7.53%
-8.70%
-4.07%
-6.21%
Source: LBMA; Worldal; WTRG
Management Change l
Banks, NBFIs and Other Organizations
Name
Md Rezaul Haque
Position
Chairman
Organization
Social Islami Bank
Mushtaque Ahmed
Directors
Bangladesh Development Bank Ltd
Md Abu Hanif Khan
Directors
Bangladesh Development Bank Ltd
SM Nurul Hoque
President
Bangladesh Myanmar Chamber of

Commerce and Industry
Senior Vice-President
Bangladesh Myanmar Chamber of

Commerce and Industry
Sheikh Md Abdus Sohhan

Kazi Masihur Rahman
Abhijit Chakravorty
Khawja Manzer Nadeem
36
Managing Director
Mercantile Bank
Country Head
State Bank of India's
Chief Executive Officer
Paramount Insurance
Md Shafiqur Rahman
Managing Director
Social Islami Bank
Mahmudul Alam
Managing Director
Union Capital (UCL).
International Economic Forecast

Year on year percentage
change
2015
GDP
2016
2017
2015
CPI
2016
2017
Global (PPP Weight)
2.9%
3.0%
3.4%
3.3%
3.1%
3.6%
Advanced Economies
2.0%
2.0%
2.3%
20.0%
1.1%
1.9%
Euro Zone
1.5%
1.9%
2.2%
0.0%
80.0%
1.4%
Developing Economies
3.8%
3.9%
4.4%
6.1%
5.1%
5.3%
Forecast as of January, 2016.

Source: Wells Fargo Securities, LLC
International Market Movement l

% Change on
Markets
Index Jan 20th
Dec 31st, 2014
One Week
In Local currency
In USD
United States (DJIA)
15766.7
-2.4
-11.5
-11.5
United States (S&P 500)
1859.3
-1.6
-9.7
-9.7
United States (NAScomp)
4471.7
-1.2
-5.6
-5.6
China (SSEA)
3115.3
0.9
-8.1
-13.3
Japan (Nikkei 225)
16416.0
-7.3
-5.9
-3.0
Britain (FTSE 100)
5673.6
-4.8
-13.6
-21.4
Canada (S&P TSX)
11843.1
-2.7
-19.1
-36.0
Germany (DAX)
9391.6
-5.7
-4.2
-13.7
Hong Kong (Hang Seng)
18886.3
-5.3
-20.0
-20.7
India ( BSE)
24062.0
-3.2
-12.5
-18.8
Pakistan (KSE)
30766.0
-4.3
-4.2
-8.2
Singapore (STI)
2559.8
-5.1
-23.9
-30.0
Source: The Economist
Selected Economic & Financial Indicators l

Global domestic product
Country
Latest
% change on year-on-year
Consumer prices
qtr
2016
latest
2015
Current account balance

Unemployment
Latest 12
rate, %
months, USD
in billion
% of GDP
2015
Interest rates,
% 10-year govt
bonds, latest
United States
2.1
2.4
0.7
0.2
5.0
-456.6
-2.5
2.04
China
6.8
6.6
6.4
1.6
1.5
4.1
275.9
3.0
2.68
0.22
Japan
1.6
1.1
0.3
0.7
3.3
131.5
3.3
Britain
2.1
1.8
2.2
0.2
0.1
5.1
-134.2
-4.4
1.80
Canada
1.2
2.3
1.9
1.4
1.2
7.1
-54.1
-3.3
1.16
France
1.1
1.4
0.2
0.1
10.1
3.5
-0.3
0.87
Germany
1.7
1.3
1.7
0.3
0.2
6.3
279.0
8.1
0.49
Russia
-4.1
0.0
-0.3
12.9
15.3
5.8
65.8
5.2
10.80
Hong Kong
2.3
3.5
2.1
2.4
3.1
3.3
9.3
2.8
1.74
India
7.4
11.9
7.5
5.6
5.0
4.9
-22.7
-1.1
7.76
Singapore
2.0
5.7
3.0
-0.8
0.2
2.0
68.6
21.2
2.38
Brazil
-4.5
-6.7
-2.6
10.7
9.6
7.5
-68.0
-3.7
16.6
Mexico
2.6
3.0
2.8
2.1
2.7
4.1
-29.9
-2.6
*% change on previous quarter, annual rate.

** The Economist poll or Economist Intelligent Unit estimate/forecast.
6.26
Source: The Economist.
37
IDLC News
IDLC Investments Acts as an Issue Manager for Energypac
Power Generation Limiteds Initial Public Offering (IPO) l
Bangladesh Securities and Exchange Commission (BSEC) has approved the Initial Public Offer (IPO) of Energypac
Power Generation Limited in its 563rd Commission Meeting held on January 05, 2016. The company will raise
BDT 418,255,000 through issuance of 16,730,200 ordinary shares at an issue price of BDT 25 each including a
premium of BDT 15 per share from the capital market of Bangladesh. IDLC Investments Limited is acting as
manager to the issue of the IPO of Energypac Power Generation Limited.
Energypac Power Generation Limited (EPGL) was incorporated as a private limited company on July 15, 1995.
The company is engaged in several diversified businesses including supply of standby and base load generators,
low voltage electrical accessories, busbar trucking systems and luminaries; and JAC brand automobiles
and construction machinery. The company is also engaged in installing power plants under engineering,
procurement and construction (EPC) contracts, operation and installation of CNG refueling station and
conversion kits and providing installation and maintenance services to power plants.
During 2015 and 2014 the revenue of the company was BDT 3,132 million and BDT 4,271 million respectively
and net profit was BDT 235 million and BDT 430 million respectively. EPS of the company is BDT 1.57 for the year
ended June 30, 2015 and Net Asset Value per share is BDT 31.13 as on June 30, 2015.
Energypac Power Generation Limited plans to repay its term loan and to invest in inventory of trading business
with the IPO Proceeds.
IDLC Spreading Warmth in winter l
IDLC as part of its extended responsibilities distributed blankets to selected regions in North Bengal with the
help of the Bogra IDLC team.
The blankets were distributed among underprivileged villagers of Bogra, Nilfamari, Gaibandha including
Sherpur, Noskuripar, Shazapur, Darail Bazar, Gabtoli, Nizgram, Maloyinagar, which included children and elderly
and different orphanages of these locations. The distribution was initiated during the first week of January 2016.
Another set of blankets were distributed to by Dishari Foundation to school children of Mokhshedpur, Gopalganj.
38
IDLC Participated at BARVIDA Car Expo 2016 l
As a part of our marketing strategy, IDLC Finance Limited successfully partaken in BARVIDA Car Expo 2016,
which was a three day event organized by Bangladesh Reconditioned Vehicles Importers and Dealers Association
(BARVIDA). The expo was held at the International Convention City Bashundhara (ICCB), Dhaka during 22nd to
24th January 2016.
Mr. Shajahan Khan, MP, Honorable Shipping Minister of Bangladesh Government, was present as the Chief Guest
in the Inaugural Session. Renowned reconditioned vehicle Importers & Dealers, Financial Institutions, Insurance
companies, CNG conversion service providers, car accessories & parts sellers, car security service providers and
other relevant stakeholders participated in the fair. Md Abdul Hamid Sharif, President, BARVIDA along with state
bodies like the National Board of Revenue (NBR) and Bangladesh Road Transport Authority (BRTA) were also
present at the event, interacted with the visitors & provided them with necessary information.
Consumer Division successfully promoted its Car Loan products throughout the fair period and received almost
200 prospective client database, who paid a visit to our stall and placed queries regarding car loan. A good
number of loan applications have already been submitted & some are in process of submission, which were
sourced through the fair.
We firmly believe that our participation in the fair has facilitated us with a distinct branding regarding our
product features. We hope it would take us one step ahead towards maintaining our position as one of the
major market leaders in Car Loan industry of the country.
A developed nation is a
prosperous nation.
At IDLC, we help you
contribute
to
this
process.
We are in the business
of financing happiness.
39
Capital Market
Review
The first month of 2016 started with fresh enthusiasm as DSEX accumulated a total of 46.4 points during
the first week. But, the zeal could not spread any further, as only seven sessions out of twenty-one closed
in positive territory, exhibiting the cautious investment mindset of the investors. During the month, market
participants opted for booking profit that they accumulated during the last two months. In the meantime,
optimistic macro updates flowed in the market like export beating its target in HY 2016, rising by 7.8% YoY
and capital machinery import soaring by over 20% YoY in first 5 months of this FY and 2.5% YoY growth in
remittance during last December. Though these optimistic cues spurred positivity among investors for the
time being, the effect could not sustain throughout the month. Volatility remained prevalent during the
month as DSEX crossed 4,700.0 points psychological level during intra-session, while investors were trying
to earn some spreads from short-term positioning and repositioning. During mid-January, Bangladesh
Bank published the Monetary Policy Statement for H2 FY 15-16 with an expansionary tone equipped with
lower credit growth target, which was still considerably higher than the actual credit growth figure and a
rate cut. However, the MPS could not pull out the investors from meticulous investment sentiment and
market lost 154.1 points after the publication till the month end. During the latter part of the month, some
earnings driven movements were observed in some scrips, as the quarterly disclosures of companies began
to flow in the market. In January, ITC, SEMLLECMF and VAMLBDMF1 made their debut in the market at an
offer price of BDT 10.0. While ITC and SEMLLECMF postedgain of 612.0% and 5.0% respectively over their
offer price since their debut till month end, VAMLBDMF1 closed flat.
By the end of the month, DSEX lost a total of 88.8 points, while the blue chip index DS30 lost 31.4 points.
During December, market enthusiasm was higher than that of the last month, with an average turnover of
BDT 5.4 bn which was BDT 4.2 bn during November, a 29.8% increase. Throughout the month, Engineering
led the turnover chart followed by Textiles, capturing 17.5% and 13.9%, respectively of the months average
turnover.
This month, Ceramics (+8.8%) and Textile (+4.3%) yielded significant return, while Life Insurance (-7.9%)
and Engineering (-4.0%) faced severe erosion. Throughout the month, Micro Caps (+3.9%) satisfied the
market participants most, while Mid Caps (-2.5%) yielded disappointment.
During the month BSEC approved the IPO issue of Energypac Power Generation Limited and IPO subscription
of Bangladesh National Insurance Company Limited. It also gave consent to the right share (1R:5) issuance
of Summit Alliance Port Limited and the draft prospectus of VIPB Accelerated Income Unit Fund.
Monthly Market Statistics l

Index Movement (January, 2016)
Index Point
Advance/Decline (January, 2016)
Change
% Change
YTD change
DSEX
4,540.9
-88.8
-1.9%
-1.9%
DS30
1,719.2
-31.4
-1.8%
-1.8%
DSES
1,095.3
-11.9
-1.1%
-1.1%
Top Ten Gainers List (January, 2016)

Top Ten Gainers
31-Jan-16
31-Dec-15
% Change
ITC
71.2
10.0*
612.0%
EASTRNLUB
723.6
305.6
136.8%
ALLTEX
30.6
17.3
76.9%
TALLUSPIN
24.2
17.7
36.7%
DACCADYE
15.2
11.2
35.7%
SUNLIFEINS
35.5
27.1
31.0%
MIRACLEIND
33.1
25.5
29.8%
BDTHAI
43.0
34.1
26.1%
DAFODILCOM
24.2
19.3
25.4%
CMCKAMAL
15.2
12.2
24.6%
*offer price
40
All Category
Advanced
Declined
Unchanged
178
140
13
Top Ten Losers List (January, 2016)

Top Ten Losers
31-Jan-16
31-Dec-15
% Change
SHURWID
12.3
17.1
-28.1%
ATLASBANG
122.8
161.4
-23.9%
GQBALLPEN
67.3
85.4
-21.2%
SAPORTL
48.5
60.3
-19.6%
KDSALTD
69.7
85.0
-18.0%
NATLIFEINS
205.3
248.9
-17.5%
APEXSPINN
94.1
113.3
-16.9%
APEXTANRY
108.6
128.9
-15.7%
SPCL
104.3
122.6
-14.9%
ECABLES
113.3
131.9
-14.1%
Market Capitalization
Top Ten by Value (January, 2016)

Top Ten (Value)
31-Jan-16
31-Dec-15 % Change
140.2
8.5%
4,191.8
50,000
EMERALDOIL
60.9
65.0
BXPHARMA
86.4
84.1
-6.3%
3,638.0
40,000
2.7%
2,697.6
SQURPHARMA
258.9
30,000
253.7
2.0%
2,510.3
BEXIMCO
28.9
29.0
-0.3%
2,421.6
BDTHAI
43.0
34.1
26.1%
2,307.1
ITC
71.2
10.0*
612.0%
2,178.9
ALLTEX
30.6
17.3
76.9%
2,040.7
IFADAUTOS
93.6
92.2
1.5%
1,920.5
KDSALTD
69.7
85.0
-18.0%
1,713.1
*offer price
Lowest P/E and Lowest P/NAV ratio

Lowest P/E
20,000
10,000
Jan-13
Mar-13
Apr-13
Jun-13
Jul-13
Sep-13
Oct-13
Dec-13
Jan-14
Mar-14
Apr-14
Jun-14
Jul-14
Sep-14
Oct-14
Dec-14
Jan-15
Mar-15
Apr-15
Jun-15
Jul-15
Aug-15
Oct-15
Nov-15
Jan-16
152.1
USD in Mn
UPGDCL
USD in mn
Value
DSE Turnover and DSEX

Turnover
Lowest Price/NAV
BDT in mn
DSE Turnover (BDT Mn)
16,000
Index
DSEX
SOUTHEASTB
5.0x
POPULAR1MF
39.9%
14,000
5,000
PRIMEBANK
5.4x
PHPMF1
40.6%
12,000
4,000
TRUSTBANK
5.5x
EBL1STMF
41.4%
MTB
5.6x
1JANATAMF
41.4%
ONEBANKLTD
5.6x
EBLNRBMF
41.8%
UTTARABANK
5.8x
ABB1STMF
42.0%
2,000
UCB
5.9x
TRUSTB1MF
42.5%
APOLOISPAT
5.9x
IFIC1STMF
43.5%
STANDARINS
5.9x
GREENDELMF
43.7%
FARCHEM
6.1x
DBH1STMF
48.7%
Top Ten Market Capitalization (January, 2016)

Top Ten Mkt Cap
BDT (Billion)
GP
BATBC
SQURPHARMA
LAFSURCEML
ICB
RENATA
UPGDCL
TITASGAS
OLYMPIC
BERGERPBL
% Change
346.6
185.0
161.4
82.9
63.7
65.6
55.2
44.7
49.8
45.1
1.5%
4.5%
2.0%
-4.3%
0.4%
-5.8%
8.5%
0.9%
2.2%
-4.6%
10,000
3,000
8,000
6,000
2,000
4,000
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Jan-15
Feb-15
Mar-15
Apr-15
May-15
Jun-15
Jul-15
Aug-15
Sep-15
Oct-15
Nov-15
Dec-15
Jan-16
1,000
-
Market Cap Class wise Stock Movement

3.94%
2.12%
0.49%
Micro
Mini
Small
Large
Mid
-1.49%
-2.51%
Market Statistics (January, 2016)

Market Stat
Unit
BDT Bn
Mcap (All)
Mcap (Equity)
*Turnover
31-Jan-16
3,153.1
31-Dec-15
3,159.8
% Change
-0.2%
USD Bn
40.2
40.3
-0.2%
BDT Bn
2,565.4
2,574.2
-0.3%
USD Bn
32.7
32.8
-0.3%
BDT Mn
5,404.6
4,164.2
29.8%
USD Mn
68.8
53.0
29.8%
* Turnover indicates avg. daily trade value of respective month
Recent Corporate Declaration l

Company name
Record
date
SD*
CD**
28.03.16 10.02.16
N/A
10.0%
AGM Date
H.R. Textile Mills Limited

Marico Bangladesh Limited
Prime Finance First Mutual Fund
N/A
15.02.16
N/A
100%
Interim)
N/A
17.02.16
N/A
5.0%
*SD = Stock Dividend, **CD =Cash Dividend
41
Sector Indicators (January, 2016) l

Sectoral Indicators
Sector
Sector Performance
Return (%)
Turnover(BDT Mn)
% of Total Turnover
Industry Cap (Equity)
Annualized PE
Trailing PE
Price/BV
Pharmaceuticals & Chemicals
632.2
11.7%
15.8%
22.7x
22.5x
4.9x
0.0%
Bank
377.6
7.0%
15.5%
7.8x
6.4x
1.1x
-1.9%
Telecommunication
80.8
1.5%
14.0%
17.8x
18.7x
9.4x
1.3%
Fuel & Power
729.3
13.5%
12.8%
12.1x
11.8x
2.5x
-1.9%
Food & Allied
363.8
6.7%
9.7%
30.9x
29.6x
19.0x
3.7%
Engineering
945.5
17.5%
5.8%
18.2x
20.9x
2.9x
-4.0%
NBFI
282.6
5.2%
5.8%
19.5x
16.0x
2.1x
-0.7%
Cement
120.4
2.2%
5.5%
27.6x
27.2x
5.5x
-3.7%
Textile
751.5
13.9%
3.4%
12.1x
13.0x
1.5x
4.3%
Miscellaneous
326.6
6.0%
3.2%
27.3x
26.4x
1.5x
1.1%
-7.9%
Life Insurance
86.1
1.6%
1.7%
N/A
N/A
N/A
Mutual Funds
48.9
0.9%
N/A
N/A
N/A
0.6x
N/A
Non Life Insurance
52.5
1.0%
1.2%
10.9x
11.1x
1.2x
4.0%
Ceramics
82.3
1.5%
1.1%
30.1x
33.1x
9.8x
8.8%
Tannery
33.8
0.6%
0.9%
24.3x
23.7x
4.4x
-3.4%
Travel & Leisure
91.9
1.7%
0.8%
19.0x
20.3x
0.6x
N/A
Services & Real Estate
182.2
3.4%
0.7%
25.0x
26.4x
2.3x
-10.6%
IT
5.0%
180.8
3.3%
0.5%
21.1x
24.4x
2.6x
Corporate Bond
0.6
0.0%
N/A
N/A
N/A
N/A
N/A
Paper & Printing
28.6
0.5%
0.1%
29.3x
18.2x
1.6x
7.9%
Jute
6.7
0.1%
0.0%
N/A
N/A
45.1x
-9.0%
5,404.6
100.0%
100.0%
15.2x
14.4x
2.5x
Weekly (Jan. 24 - Jan. 28, 2016) Mutual Funds Update l

Following table exhibits the Open-End Mutual Funds (10) in order of YTD change in NAV.
Sl
No
Name of Mutual Funds
Initial Fund Re-Purchase

Size (BDT mn)
Price
Selling
Price
Effective
Date*
NAV
10.1
% Change in NAV
from last week
-1.7%
YTD Change
in NAV
4.8%
Fund
Manager
ACAML
MTB Unit Fund
1000
10.0
10.1
31-Jan-16
Rupali Life Insurance First Mutual Fund
500
9.7
10.0
3-Feb-16
10.3
0.2%
1.1%
PAMC
Shandhani Life Unit Fund
500
9.8
10.1
27-Jan-16
10.3
0.0%
0.4%
Alif AMCL
Bangladesh Fund
50000
100.0
103.0
31-Jan-16
100.0
0.0%
0.0%
ICB AMCL
ICB AMCL Islamic Unit Fund
N/A
10.0
10.3
31-Jan-16
10.3
0.0%
0.0%
ICB AMCL
ICB AMCL Converted First Unit Fund
500
10.0
10.3
31-Jan-16
10.0
0.0%
0.0%
ICB AMCL
ICB AMCL Unit Fund
100
230.0
235.0
31-Jan-16
230.0
0.0%
0.0%
ICB AMCL
ICB AMCL Pension Holders' Unit Fund
100
180.0
185.0
31-Jan-16
180.0
0.0%
0.0%
ICB AMCL
CAPM Unit Fund
100
100.0
103.0
28-Jan-16
102.9
0.2%
-0.1%
CAPM
200
97.0
100.0
3-Feb-16
100.8
0.2%
-4.2%
PAMC
10 Prime Financial First Unit Fund**
* For ICB AMCL, ACAML amd CAPM, effective date is the date from which repurchase price, selling price and NAV are applicable.
For PAMC and Alif AMCL, effective date is the date until which repurchase price, selling price and NAV are applicable.
** YTD Change in NAV is calculated on NAV effective till December 30, 2015
Following table exhibits the Closed-end Mutual Funds (41) in order of YTD change in NAV based on latest NAV/unit as on January 28, 2016.
On the basis of Price/NAV, 37 Mutual Funds out of 41 were traded below their respective NAV. POPULAR1MF and PHPMF1 had the lowest
Price/NAV and were traded at 60% and 59% discount, respectively. 6THICB and 8THICB were traded at higher multiple than others, 29%
and 24% premium, respectively. Last week, NAV of 38 Mutual Funds decreased and 3 Mutual Funds increased. On the other hand, price of
21 Mutual Funds decreased, 10 increased while 10 remained unchanged. On an average, price of Mutual Funds decreased by 1.15% while
NAV decreased by 0.9% from previous week, against a -1.81% change in DSEX over the week. In terms of price changes, 23 Mutual Funds
outperformed DSEX over last week. Among all the asset managers, VIPB outperformed most in terms of change in NAV of its funds, adding an
additional 0.08% on an average over Mutual Funds managed by it.
42
DSE Code
3RDICB
Name of Mutual Funds

3rd ICB M.F.
" Price
%Change of
YTD
Latest
%Change in NAV
Performance against Redemption
(Jan 28,
Price/NAV Price from
Change in
Year
NAV/unit
from last week
DSEX (YTD)
2016) "
last week
NAV*
310.6 379.3 81.9%
0.1%
0.7%
9.3% Outperformed
2016
Fund
Manager
ICB
7THICB
7th ICB M.F.
117.4
99.5
117.9%
0.0%
-1.3%
5.4%
Outperformed
2016
ICB
4THICB
4th ICB M.F.
222.5
248.7
89.5%
-5.3%
-0.2%
5.0%
Outperformed
2016
ICB
8THICB
8th ICB M.F.
75.2
60.7
123.9%
4.9%
-2.7%
4.3%
Outperformed
2016
ICB
1STPRIMFMF Prime Finance First Mutual Fund
10.1
10.7
94.2%
-9.8%
-0.6%
3.5%
Outperformed
2019
ICB AMCL
ICBEPMF1S1 ICB Employees Provident MF 1: Scheme 1
6.7
7.9
85.2%
6.3%
-1.3%
3.4%
Outperformed
2019
ICB AMCL
ICB1STNRB
ICB AMCL 1st NRB Mutual Fund
18.8
22.1
85.1%
0.5%
-1.3%
3.4%
Outperformed
2017
ICB AMCL
ICBAMCL2ND ICB AMCL Second Mutual Fund
4.5
8.6
52.1%
-4.3%
-1.1%
3.2%
Outperformed
2019
ICB AMCL
ICB3RDNRB
ICB AMCL Third NRB Mutual Fund
4.4
7.7
57.0%
-2.2%
-0.9%
3.1%
Outperformed
2019
ICB AMCL
6THICB
6th ICB M.F.
64.8
50.2
129.2%
-0.2%
-1.2%
3.0%
Outperformed
2016
ICB
ICB2NDNRB
ICB AMCL 2nd NRB Mutual Fund
7.9
10.8
73.2%
0.0%
-1.0%
2.8%
Outperformed
2018
ICB AMCL
PF1STMF
Phoenix Finance 1st Mutual Fund
4.4
8.0
55.3%
-2.2%
-1.1%
2.2%
Outperformed
2019
ICB AMCL
4.5
8.3
54.2%
-2.2%
-1.1%
2.1%
Outperformed
2019
ICB AMCL
6.0
8.9
67.3%
-1.6%
-0.9%
2.1%
Outperformed
2023
ICB AMCL
10.0
17.0
58.8%
0.0%
-0.7%
2.0%
Outperformed
2023
AIMS
AIMS
Prime Bank 1st ICB AMCL Mutual Fund

ICB AMCL Sonali Bank Limited 1st
ICBSONALI1
Mutual Fund
GRAMEENS2 Grameen One : Scheme Two
PRIME1ICBA
GRAMEEN1
Grameen Mutual Fund One
17.7
25.6
69.2%
-0.6%
-0.4%
1.7%
Outperformed
2015
5THICB
5th ICB M.F.
220.5
227.8
96.8%
-8.1%
-0.7%
1.6%
Outperformed
2016
ICB
IFILISLMF1
IFIL Islamic Mutual Fund-1
6.2
9.4
65.7%
-1.6%
-1.0%
1.4%
Outperformed
2019
ICB AMCL
AIMS1STMF
Aims 1st M.F.
18.8
26.6
70.7%
1.6%
-0.5%
1.2%
Outperformed
2015
AIMS
SEBL1STMF
Southeast Bank 1st Mutual Fund
9.3
12.4
74.8%
0.0%
-0.2%
1.1%
Outperformed
2021
VIPB
RACE
FBFIF
First Bangladesh Fixed Income Fund
6.5
10.9
59.5%
-1.5%
-0.3%
1.1%
Outperformed
2022
NLI1STMF
NLI First Mutual Fund
9.5
13.2
72.1%
-1.0%
-0.2%
1.0%
Outperformed
2022
VIPB
1JANATAMF
First Janata Bank Mutual Fund
4.5
10.8
41.6%
0.0%
-0.3%
0.7%
Outperformed
2020
ATCSLGF
Asian Tiger Sandhani Life Growth Fund
7.5
12.1
62.2%
2.7%
0.1%
0.5%
Outperformed
2021
RACE
ATCP
AMCL
RACE
TRUSTB1MF
Trust Bank 1st Mutual Fund
4.6
10.8
42.6%
-8.0%
-0.3%
0.4%
Outperformed
2019
RELIANCE1
RELIANCE ONE MUTUAL FUND
6.9
11.7
58.8%
-1.4%
-0.8%
0.3%
Outperformed
2021
AIMS
ABB1STMF
AB Bank 1ST Mutual Fund
4.7
11.2
42.0%
-4.1%
-0.1%
0.3%
Outperformed
2022
RACE
SEML
SEMLLECMF
SEML Lecture Equity Management Ltd. 10.5
10.1
104.5%
-6.2%
0.1%
0.2%
Outperformed
2026
PHPMF1
PHP First Mutual Fund
4.3
10.5
40.8%
-2.3%
-0.4%
0.2%
Outperformed
2020
RACE
EBLNRBMF
EBL NRB MUTUAL FUND
4.5
10.5
42.9%
-2.2%
-0.4%
0.1%
Outperformed
2021
RACE
EXIM1STMF
EXIM Bank 1st Mutual Fund
6.0
10.5
57.1%
1.7%
-0.3%
0.1%
Outperformed
2023
RACE
EBL1STMF
EBL First Mutual Fund
4.5
10.6
42.5%
0.0%
-0.3%
0.1%
Outperformed
2019
RACE
POPULAR1MF Popular Life First Mutual Fund
4.3
10.8
40.0%
-2.3%
-0.3%
0.1%
Outperformed
2020
RACE
IFIC1STMF
4.6
10.6
43.6%
0.0%
-0.1%
-0.1%
Outperformed
2019
RACE
10.8
91.4%
-3.9%
-0.3%
-0.3%
Outperformed
2026
VAML
6.5
11.3
57.5%
1.6%
-1.6%
-0.9%
Outperformed
2021
LR Global
IFIC Bank 1st Mutual Fund

VANGUARD AML BD Finance
VAMLBDMF1
Mutual Fund One
MBL1STMF
MBL 1st Mutual Fund
7.4
11.7
63.3%
1.4%
-1.4%
-1.0%
Outperformed
2021
LR Global
GREENDELMF Green Delta Mutual Fund
AIBL1STIMF
AIBL 1st Islamic Mutual Fund
4.9
10.4
47.3%
0.0%
-1.6%
-1.1%
Outperformed
2020
LR Global
LRGLOBMF1 LR Global Bangladesh Mutual Fund One
5.5
10.1
54.5%
0.0%
-2.3%
-1.7% Underperformed 2021
LR Global
NCCBLMF1
NCC Bank Mutual Fund 1
6.8
10.8 62.7%
3.0%
-3.9%
LR Global
DBH1STMF
DBH First Mutual Fund
5.5
10.4 53.1%
0.0%
-5.0%
LR Global
YTD Change in DSEX
-1.9%
* RACE, LR Global, AIMS and VIPB managed funds YTD is calculated from the NAV of Dec 24 2014. * ICB and ICB AMCL managed funds YTD is calculated from the NAV of
Dec 30 2014. * YTD of ATCL AMCL managed fund is calculated from the NAV of March 25, 2015.
43
Investment
Insight
Financials (BDT Million)**
2014
2015
HY, 2016
Revenue
Gross Profit
Operating Profit
Net Profit after Tax
Total Assets
Total Equity
2,334
454
318
317
4,959
3,843
2,029
396
301
416
5,718
4,039
968
236
164
205
6,136
3,980
2014
2015
HY, 2016
-2.6%
26.1%
-13.1%
31.0%
-6.0%
5.1%
Per share (BDT)
2014
2015
HY, 2016
Restated EPS
Restated BV Per Share
3.3
39.4
4.3
41.4
2.1
40.8
Growth (%)
Revenue
Net profit after tax
Others
2014
2015
HY, 2016
Gross Profit Margin

Operating Profit Margin
Net Profit Margin
ROA
ROE
Stock Dividend
Cash Dividend
19.5%
13.6%
13.6%
7.2%
10.4%
25.0%
19.5%
14.8%
20.5%
7.8%
10.6%
27.0%
24.4%
17.0%
21.2%
3.5%
5.1%
-
** Accounting year Jul-Jun
3 years CAGR
Revenue
NPAT
MATINSPINN SQUARETEXT
-8.2%
-4.8%
26.5%
-0.7%
Peers
MALEKSPIN
10.9%
-
SAIHAMCOT
16.4%
-3.1%
Source: Financial Statements of MATINSPINN, SQUARETEXT, MALEKSPIN, and

SAIHAMCOT; Research, IDLC Investments Limited.
Terminologies
Free Float: % of total shares not owned by Sponsors/ Directors, and Govt.
Annualized PE: Based on annualized earnings of the latest declared quarter
Trailing PE: Based on last 12 months earnings
DISCLAIMER
Jan-16
Dec-15
Oct-15
Nov-15
Sep-15
Jul-15
Aug-15
Jun-15
Apr-15
May-15
Mar-15
Jan-15
MATINSPINN
Feb-15
Dec-14
Oct-14
Nov-14
Sep-14
Jul-14
Aug-14
Jun-14
* Based on annualized earnings of HY 2016.
Apr-14
41.0
97.5
35.0%
9.7x
9.4x
12.7x
DSEX
140
130
120
110
100
90
80
70
60
50
May-14
Matin Spinning Mills Limited (DSE: MATINSPINN)

Current Price (January 28, 2016)
Total Number of Share (Million)
Free Float (%)
Annualized PE* MATINSPINN
Trailing PE MATINSPINN
Annualized PE Textile
Rebased Price
MATIN SPINNING MILLS LIMITED
Company Profile
Matin Spinning Mills Limited (DSE: MATINSPINN) is a manufacturer and
marketer of cotton and synthetic yarn. The company was incorporated in
2002. It started its commercial operation four years later in 2006. Later in 2010,
MATINSPINN was converted into a public limited company. The company
was listed both in DSE and CSE in 2014.
MATINSPINN operates as a backward linkage of garments manufacturing
units of DBL Group, which is a business group consisting of 18 different
companies. MATINSPINN has an associate company titled DBL ceramics Ltd.
Where it has 25% equity stake. The associate company is not operational yet.
Key Revenue Drivers & Company Insight

Revenue of MATINSPINN comes from producing and supplying cotton and
synthetic yarn to the fabric and apparel manufacturing counterparts within
DBL Group. Sales of MATINSPINN are considered Deemed Export, as its
product is ultimately used in export oriented garments industry.
Top line growth was negative in previous years, due to shift in customers
demand to lower price products. Besides, high capacity utilization constrained
volume growth opportunity. However, to induce business growth the
company initiated production capacity expansion. It is implementing a
project to establish a Mlange producing unit with a capacity of 10 ton yarn/
day, expected to be operational within this year. It is to be financed by the
BDT 1.3 billion worth of IPO of the company. In addition, MATINSPINN plans
to implement another expansion project of synthetic yarn with a capacity to
produce 7 ton yarn/day.
Financial Performance
Revenue of the company has been shrinking since 2012, as final product price
has been reduced. However, volume sales increased by 3.4% annually during
the same period. In coherence with product price decline, cost shrank as well,
which helped Gross Profit Margin (GPM) stay quite stable at 19.5% in 2014
and 2015. But, Operating Profit Margin (OPM) increased in 2014 to 14.8% from
13.6% in the year before. Net Profit Margin (NPM) took an even higher leap
in 2015, reaching 20.5%, resulting from interest of IPO fund kept in bank, as
well as lower financial expenditure. The interest income largely helped the
company attain 26.5% CAGR in Net profit since 2012.
In HY 2016, revenue declined further by 6.0%. But GPM boosted to 24.4%,
which in turn pushed OPM up to 17.0%. Increased Operating Profit and
continued interest income helped NPM increase to 21.2%, posting a 5.1%
YoY growth in bottom line.
Recently, the company has reported consolidated NPAT (excluding noncontrolling interests) of BDT 205.5 million with consolidated EPS of BDT 2.1
for the period of six months (Jul15 to Dec15) as against BDT 196.5 million
and BDT 2.0, respectively for the same period of the previous year.
This Document has been prepared and issued by IDLC Finance Limited on the basis of the public information available in the market, internally developed
data and other sources believed to be reliable. Whilst all reasonable care has been taken to ensure that the facts & information stated in the Document are
accurate as on the date mentioned herein. Neither IDLC Finance Limited nor any of its director, shareholder, and member of the management or employee
represents or warrants expressly or impliedly that the information or data of the sources used in the Document are genuine, accurate, complete, authentic
and correct. Moreover, none of the director, shareholder, and member of the management or employee in any way is responsible about the genuineness,
accuracy, completeness, authenticity and correctness of the contents of the sources that are publicly available to prepare the Document. It does not solicit
any action based on the materials contained herein and should not be construed as an offer or solicitation to buy sell or subscribe to any security. If any
person takes any action relying on this Document, shall be responsible solely by himself/herself/themselves for the consequences thereof and any claim or
demand for such consequences shall be rejected by IDLC Finance Limited or by any court of law.
44
ASIF SAAD BIN SHAMS
ADNAN RASHID
Phone: +88 02 8834990 ext: 102

Email: [email protected]
Phone: +88 02 9898442 ext: 153

MOHAMMAD SAMIUL ALAM

Phone: +88 02 9898442 ext: 135
FARAH MARJAN
MD. JULKER NAIM
Phone: +88 02 9898442 ext: 135

Green Finance Reasearcher

46

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Monthly Business Review - January 2016

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Volume 12 l Issue 01 l January 2016

Bangladesh to be second best performer in 2016

Monetary Policy Statement Jan-Jun 2016

Monetary Policy Statement (MPS) H2 FY 16 has

USD 200 million project to automate state banks

Design & Printing: nymphea l www.nymphea-bd.com

IDLC Spreading Warmth in winter

CAPITAL MARKET REVIEW

All rights reserved. No part of this newsletter may be

IDLC MONTHLY BUSINESS REVIEW

Monetary Policy Statement Jan-Jun 2016 Review

IDLC MONTHLY BUSINESS REVIEW

Source: Bangladesh Bank

short term interest rates

long term interest rates

velocity of money through the economy

bonds and equities (corporate ownership and debt)

government versus private sector spending/savings

international capital flows of money on large scales

Financial derivatives such as options, swaps, futures contracts, etc.

Role of Monetary Policy

Broad Money (M2)

Source: Bangladesh Bank

Monetary Policy Framework

Source: Bangladesh Bank

IDLC MONTHLY BUSINESS REVIEW

Flow Chart: Monetary Policy

A Glimpse of Monetary Policy Statement Jan-Jun 2016

5.41 5.34 5.47

Policy Decision based on

General, 12 Month Avgerage

Non-Food, 12 Month Avgerage

Source: Bangladesh Bank

Repo and Reverse

Source: Bangladesh Bank

Private sector credit growth

Domestic credit growth

Public sector credit growth

Reserve Money growth

GDP Growth rate

IDLC MONTHLY BUSINESS REVIEW

7.5 7.6 7.3

Source: Bangladesh Bank

Targeted Credit Growth

Call Money Rate %

growth target of 14.8% for June 2016.

Source: Bangladesh Bank

Source: Bangladesh Bank

The challenges facing monetary policy

Source: Bangladesh Bank

Private sector credit

Assessing the economic situation

Source: Bangladesh Bank

Forecasting inflationary pressures

a challenge as we know the inflation and growth are positively correlated.

Source: Bangladesh Bank

Complex Financial Framework

Export and Import

Source: Bangladesh Bank