DT
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Business
SUNDAY, DECEMBER 13, 2015
Onion price may fall after India’s price cut n Ibrahim Hossain Ovi The price of onion in local market is likely to cool down as the Indian government on Friday slashed the minimum export price of onions at $400 per tonne from $700. Though India’s move brings a caushion for consumers, local producers have been left facing a real challenge of price competition again, according to analysts and farmers. On Friday, local onion was sold at Tk70 and imported ones at Tk40 per kg in different kitchen markets of the capital. The prices of both variety of onions soared in August, following the hike of India’s minimum export price (MEP) to $700 from $400 per tonne. The MEP of all varieties of onions is revised from $700 FOB (freight on board) per tonne to $400 per tonne, according to the Directorate General of Foreign Trade, India. The move of scraping MEP is aimed at boosting overseas shipments after wholesale prices went down to Rs10 per kg. “On Onion – the decision was taken today to reduce the Minimum Export Price (MEP) of onion from $700 to $400 per tonne,” Indi-
Bangladesh Bank gets CYFI award for school banking n Tribune Report Bangladesh Bank has won the Child and Youth Finance International (CYFI) Country Award 2015 from Asia and the Pacific region. The recognition came due to “massive financial inclusion activities, particularly in the area of school banking.” Last year, Singapore won the award. The award was officially handed over by Valerie Georgina Howarth, Baroness Howarth of Breckland, OBE, a British politician and member of the House of Lords, at the 4th Annual CYFI Awards Ceremony, held at the House of Lords in London on 10 December 2015. On behalf of Bangladesh Bank, Executive Director Md Abdur Rahim received the award, according to a press release on Friday. CYFI is a Europe-based global network of 36m children and youth across 125 countries that works for enhancing the financial capabilities of children and youth. Under the broader head of Financial Inclusion, Bangladesh Bank has been promoting rapid expansion of financial services, particularly for the excluded and underserved, to improve inclusive economic growth in Bangladesh. The government has also been fully supportive of financial inclusion strategy of the central bank, the statement said. Launched in 2010 with a circular from Bangladesh Bank, school banking has emerged as one of the core components of the financial inclusion programmes of the central bank. Students can now open bank accounts with an initial deposit of only Tk100 with no charges applicable on such accounts. l
Local onion farmers fear losses after India cut minimum export price of the vegetable an Commerce Minsiter Nirmala Sitharaman tweeted. According to the National Horticultural Research and Development Foundation (NHRDF) data, wholesale prices of onions are ranging at between Rs10-Rs14 per kg in the
DHAKA TRIBUNE
Asia’s biggest wholesale market for onion, Lasalgaon in Maharashtra, much lower than its peak of Rs57 a kg in August. “At the current price, we are getting some profits selling our products but if the prices go down drastically in Bangladesh market
due to the price slashing by the Indian government it will minimise our profits,” Shamsuddin Mollah, an onion cultivator in Pabna told the Dhaka Tribune. Even to some extent, the lowering prices may bring losses to the farmers, he added. “The price cut will give a cushion to the consumers but it will reduce profits of local producers,” Khondaker Golam Moazzem, additional research director of Centre for Policy Dialogue (CPD) told the Dhaka Tribune. The ultimate benefits will go to the consumers and the farmers will be the losers if they cannot meet their production cost with the current market price, he added. The CPD official suggested that the Ministry of Commerce should look into how the price could be adjusted to protect the local producers. “Price cut by the Indian government will not affect Bangladesh market as the present supply chain is stable, Senior Commerce Secretary Hedayetullah Al Mamoon told the Dhaka Tribune over phone yesterday. The government will look into the issue and take necessary steps to protect local producers, he added. l
BSEC seeks public opinion on alternative investment norms
Bear-spell grips stock market
n Tribune Report
Bear-spell hit the stock market in the past week after two consecutive weeks of rally, as investors booked quick-profit. During the week that ended on Thursday, the benchmark of Dhaka Stock Exchange, DSEX, settled at 4,583, losing 57 points or 1.3%. The blue-chip comprising index DS30 was down 31 points or 1.8% to 1,741. The DSE Shariah Index, DSES, fell 19 points or 1.7% to 1,105. The port city bourse Chittagong Stock Exchange (CSE) also returned to the red with its Selective Categories Index - CSCX - losing 146.67 points or 1.69 per cent to end at 8,505.05. The Chittagong Stock Exchange Selective Categories Index, CSCX, closed at 8,505, declining 146 points or 1.7%. Huge sell-off mainly on large-cap stocks like Grameenphone, Lafarge Surma and Titas Gas was the main driver of pulling down the market in the past week. “Ripples in investors’ sentiment and apparent lack of directions prompted much more market level volatility, last week,” said IDLC Investments. Besides, shifts across selective large-cap and micro-cap issues sterilised the market momentum to evolve at intra-day sessions but could not sustain for long, it said. IDLC said sectoral preference remained almost same as of the previous week while investors’ switch prolonged for lucrative price hunts, including better fundamentals. Trading activities remained sluggish as the DSE’s daily average turnover was Tk433 crore, down 14% over the previous week. Overall activities remained confined on, engineering, pharma and power sectors, as they together accounted for about 50% of the week’s total turnover. LankaBangla Securities said correction of the stock price of large-cap companies such as Grameenphone, Lafarge Surma and Titas Gas contributed to the decrease in index. l
The market regulator Bangladesh Securities and Exchange Commission (BSEC) has posted certain proposals on its website to seek public opinion intended to make new rules on alternative investment for financing non-listed firms. Private equity, venture capital, impact or any other type of funds will be called alternative investment fund. Such fund is a privately pooled investment vehicle which collects funds from eligible investors to invest in accordance with a defined investment policy. The proposals intended to regulate venture capital companies are relatively new in the country. The venture capital companies usually provide fund for start-ups with high potentials. According to the salient points of the proposed new rules titled Bangladesh Securities and Exchange Commission (Alternative Investment) Rules, life or tenure of a fund will be 5-15 years. However, the life of the fund may be extended for a period of up to two years subject to approval of at least three-fourth majority of the unit holders. An alternative investment fund size will be at least Tk10 crore and subscription by the sponsors will not be less than 10% of the fund. Minimum investment by the fund manger must be at least 2% of the fund. Any person connected to the fund, sponsors, shareholders and the fund manager will not be allowed more than 25% of the units of a fund at any point of time. The sponsors will maintain a continuous investment of not less than 2.5% of the fund. An alternative investment fund will be allowed only cash dividends to the unit holders. All investments in a fund will be locked
in for a period of three years from the date of issuance of units. For the eligibility to apply for operating fund, the applicant will require to have a paid-up capital of at least Tk5 crore, but for a fully-owned foreign entity or for a foreign fund management, applicants must have their paid-up capital of at least Tk150 crore, and for a foreign entity or foreign fund management subsidiary company, they must have Tk10 crore for paid-up capital. Fund managers must have a minimum net worth of 75% of their paid-up capital, and in case, the net-worth of fund managers goes down below 75% of their paid-up capital, they must increase that to the required level within the next accounting year. The fund manager’s annual fee will be Tk50,000 to pay through a bank draft one month withing the end of each financial year, and if failed to pay within the stipulated time, fund managers must be liable to pay Tk25,000 for each month of default. Fund managers may raise capital for a fund from eligible investors through issuance of units in accordance with the rules and the minimum subscription to the units of a fund must be Tk50,00,000. Only private placement, but no public offer will be allowed. No alternative investment fund will be subscribed by more than 200 investors. For investment criteria, a maximum 25% of the fund must be invested in listed securities and investment in single listed securities will not exceed 5% of the fund. No alternative investment fund can invest more than 25% of the fund to a single non-listed portfolio company. The proposed rules have been posted on the commission’s website for getting opinion from public and shareholders before finalising the new rules. l
n Tribune Report