Read more about September’s business and international news
Hong Kong city, US top list of multimillionaires
Numbers of millionaire and multimillionaire have increased worldwide by 58% to over 13 million and by 71% to 495,000 in a decade. An individual with net assets of $1 million is considered a millionaire and the one with $10 million a multimillionaire, according New World Wealth. Hong Kong is the city with the largest number of multi-millionaires (15,400) followed by New York (14,300), London (9,700), Moscow (7,600), Los Angeles (7,400) and Singapore (6,600). The United States is the top-ranking country with 183,500 millionaires followed by China (26,600), Germany (25,400), UK (21,700), Japan (21,000), Switzerland (18,300), and Hong Kong (15,400).
Revenue earning failure cause for concerns
Disruption in business activities due to political turmoil during the last winter was a major reason for the government’s failure to achieve the targeted revenue. The National Board of Revenue, responsible for major portion of revenue, mostly tax, collected Tk 1,20,513 crore, far short of the original target of Tk 1,36,090 crore and below the revised target of Tk 1,25,000 crore in 2013-14 financial year. Large companies and private banks reportedly failed to pay taxes to the expected level. The target for the current fiscal year has been fixed at Tk 1,49,720 crore.
Move to create more new entrepreneurs
The central bank has signed a participatory contract with 32 commercial banks and financial institutions to support development of new entrepreneurs. Fresh entrepreneurs aged between 18 and 45 years would be entitled to this loan. Each of them will be given the highest Tk 10 lakh collateral-free loan and Tk 25 lakh with collateral. Bangladesh Bank governor Atiur Rahman called for diverting the banks’ investment focus to new entrepreneurs in view of repayment records of small and medium enterprises. Dhaka Chamber of Commerce and Industry has earlier taken an initiative to promote 2,000 new entrepreneurs.
China exposed to US rate hike
Once shielded by a surge in domestic bank lending and capital controls, overseas borrowings are leaving China vulnerable to a rise in US interest rates. This may create funding problems for some companies. Authorities have allowed more foreign capital into China to drive growth. In first quarter of 2014, foreign loans into China rose 38% to $800 billion, a fourfold increase since 2010. Its increasing integration with the global economy is causing leaks in capital controls. Chinese companies and banks have sold a record $57 billion in dollar-denominated bonds so far this year.
Doubts over BB monetary policy targets
The monetary policy may fail to check inflation or ensure flow of private loans, cautions a research organisation. The central bank’s policy statement set the targets of bringing down inflation to 6.5% and attaining credit growth at 16.5%. Unnayan Onneshan says the higher cash reserve requirement to absorb banking liquidity and higher policy rate may not be efficacious in containing inflation and may adversely affect the credit flow. In the past three years, inflation, estimated at 7.35%, 7.35% and 8.05%, exceeded the targets and private credit growth rates, recorded at 15.7%, 11.1% and 11.4%,were much below the targets.
A bleak prospect of gains from financial assets?
Investment environment may be challenging over the next decade given the modest growth outlook for many developed economies. Singapore’s sovereign-wealth fund GIC says it sees greater investment opportunities in emerging economies compared with some advanced markets. GIC president Lim Chow Kiat points out that with economies normalising their monetary policies and interest rates rising, financial assets will see diminished returns. Its latest annual report shows it has had to cut its exposure to developed stock markets to 29% from 36% last year, while boosting exposure to 19% from 17% in emerging-market stocks.
Pakistan female entrepreneur at Wall Street firm
Shama Zehra started business with a clothing company from a rack in the corner of their apartment in Pakistan. She works in male-dominated world of finance where just 13% of brokers and advisors are female. She is founder and CEO of newly-launched Aligned Independent Advisors, a boutique independent advisory firm on Wall Street. Zehra proves to be serial entrepreneur – engineer, business-owner, pilot and banker. She built the number one wealth management business at Standard Chartered Bank in Pakistan before emigrating to the US to become one of the largest producers at Goldman Sachs and Morgan Stanley MS-0.88%.
Bangladesh investment summit to attract FDI
Dhaka is going to host an investment summit on 17 September to attract foreign direct investment in the country. It is going to offer incentives for investments in special economic zones and agro-based sector, says an official at Board of Investment, the focal point. Over 500 investors from home and countries of the region are expected to attend the meeting. Another meeting titled ‘The 2nd Bangladesh Investment Summit’ is scheduled to be held in Singapore on 4 September to discuss the country’s investment climate and investment opportunities for Asia-based asset managers, private banks, family offices, private equity firms and corporations into Bangladesh’s emerging market.
Infrastructure boom shifting to emerging markets
Emerging Asia’s share of global infrastructure spending may rise from 30% in 2012 to 40% in 2018, and 48% by 2025.The Asia Pacific region needs to invest $8 trillion in infrastructure between 2010 and 2020 to maintain growth rates. Such spending is expected to shrink in developed economies but more than double in the Middle East from $207billion in 2011 to $510 billion in 2025. A growing middle class in emerging markets will increase demand for consumer goods and better roads. However, CEOs worry almost a possible slow there, according to PricewaterhouseCoopers.
Nepal builds highway to Everest to boost tourism
Snow-capped peaks of the world’s highest mountain dominate the skyline of Nepal, drawing tens of thousands of tourists to the region each year. The Nepalese government has announced plans to develop the first road leading to the Everest region. While this would boost the tourism industry, experts are concerned that the country’s natural heritage could suffer. The 100-kilometre road will link Jiri, a town which serves as the trailhead for many Everest trekking routes, with Surkhe village, a couple of hours walk from the Tenzig-Hillary Airport in Lukla.
