Read more about December’s business and international news
Apparel factories going to stock market
Six readymade garments companies raised funds of over Tk 381 crore from Dhaka Stock Exchange. Three more secured permission for collecting an amount of Tk 232 crore this year. Apparel entrepreneurs are turning their faces to the stock market to avoid costly lending by commercial banks. More than 15 garment factory owners submitted initial public offering (IPO) prospectus to Bangladesh Securities and Exchange Commission for getting approval for issuing shares to the public. The fundswould be used for paying off-term loans, expanding existing plants, purchasing new machinery, constructing new factory buildings, purchasing of land, in capital investment and as working capital.
Summit in joint venture for High-tech Park
Summit Group is all set to join an Indian firm named Infinity to develop a part of the planned hi-tech park on 232-acre land in Kaliakoir, Gazipur. They are likely to win a contract as recommended by Information and Communications Technology (ICT) Division. However, upon approval from the cabinet committee on economic affairs, an agreement would be signed for 40 years, keeping provision for extension by 20 years. The Indo-Bangladesh company is among seven firms that submitted proposals in April.The Bangladesh Hi-Tech Park Authority has set aside the number one of five blocks for itself.
Global brands to source jeans from Bangladesh
Retailers from different countries are showing increasing interests in Bangladesh for sourcing jeans. Representatives of a few dozen such companies visited the country as part of a denim expo in Dhaka, organised by Denim Expert Ltd based in Karnaphuli Export Processing Zone, Chittagong, recently. Participants described the country as a one-stop source for denim products. Bangladesh is the world’s second largest producer of denim apparels after China, shipping more than 185 million pieces of wears across the globe and earning around US$ 600 million a year. Currently, there are 25 denim fabric manufacturers in the country.
Companies losing in Russian business crisis
The crisis over Vladimir Putin’s policy is affecting companies beyond Russian borders. NokianRenkaatOyj, ITE Group Plc and StadaArzneimittel AG are among 29 non-Russian companies that count the country for 10% of sales. Their stocks slumped 21% this year in dollar terms, compared with a 2.3% gain in the MSCI All-Country World Index and an 8% drop in the STOXX Europe 600 Index. Investors are dumping the stocks as the ruble weakened by 22% recently against the dollar amid sanctions imposed by the US and its allies tied to the conflict in Ukraine.
Beijing opens door wider to foreign investors
China will give investors much greater access to its stock market to lure foreign capital and overhaul the economy. The programme allows global players to invest in a wide range of companies that had been largely cut off from international money. They would benefit from the shift of China’s economy from manufacturing toward consumer spending. China hopes that foreign investors would bring some order to ‘an unruly’ market. The Shanghai-Hong Kong Stock Connect programme would allow all investors to buy shares on the Shanghai Stock Exchange, while permitting wealthy investors in mainland China to buy stocks listed in Hong Kong.
Economic fallouts of Isis rise
The rise of militant Islamic State (Isis) has forced the Iraqi government to spend money on rehabilitation of refugees, besides rebuilding armed forces. Despite surplus funds, the country may run a deficit next year, given the mounting expenditures and falling oil prices. The situation is likely to lower oil production affecting revenue. This may deter the IMF and the World Bank from giving Iraq any further funds. Baghdad derives 93% of its revenues from oil. The conflict has slowed down trade between Iraq, Turkey, Syria, Lebanon and Jordan. The Isis is set to degrade economies of several states in the region.
RBI tightens rules for ‘shadow banks’
The Reserve Bank of India (RBI) has tightened rules for so-called ‘shadow banks’, raising minimum capital requirements. It restricts deposits with a set of changes that it hopes will protect consumers and the market without stifling growth. Non-banking financial companies (NBFCs) provide a variety of banking services for both firms and individuals in India. They have been lending heavily to sectors like infrastructure at a time when traditional banks are held back by, among other things, hefty bad loans. But NBFCs do not hold full banking licences and are not subject to the tougher rules imposed on commercial banks.
3.5 million rural houses under solar system
About 3.5 million rural houses have been brought under solar home system to provide electricity. Although the aggregate output of power from this system is only 150 megawatt, the access to electricity has effectively benefitted 20 million people across the country. Currently solar panels are being set up in 65,000 houses every month. Prime Minister Sheikh Hasina said the government has planned to provide solar home system to three million more rural families through Infrastructure Development Company Limited (Idcol) in next three years. So, by 2017, the number of beneficiaries would be 6 million.
Opium still a business attraction for Afghans
Afghan farmers grew a record 209,000 hectares of opium poppies in 2013, up 36% from the previous year and surpassing the previous peak of 193,000 hectares in 2007, according to the UN drug office. It probably rose again this year. Even law enforcers are reportedly turning to opium for delayed payment of their salaries. Afghanistan’s government relies on donors to fund about 65% of its budget. Kandahar and neighboring Helmand, strongholds of Taliban insurgents, account for about 60% of the country’s opium production. The value of opium production was estimated at $950 million in 2013, equivalent to almost 5% of Afghanistan’s economy.
SEZ in Myanmar’s Rakhine state?
Development of a special economic zone (SEZ) around Kyaukphyu in Myanmar’s Rakhine State could move closer to reality before the end of the year. Twelve foreign and domestic firms have been shortlisted by the SEZ development committee for building factories, new housing and infrastructures. Chinese, Singaporean and Indian businesses are likely winners of the bidding. China continues to be seen as pivotal to the successful development of the Kyaukphyu SEZ, despite cooling business relations between Naypyitaw and Beijing. China and Singapore were the target of recent roadshows seeking to attract investment in the Kyaukphyu SEZ.
