MTBiz May-June 2014 Issue Highlights Mobile Economy Impact

Volume: 05 | Issue: 05 | May-June 2014 MTBiz 1
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Contents
THE MOBILE ECONOMY 2020: 5% OF WORLD GDP
Ar cle of the Month page 02
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MTBiz
Ar cle of the Month 02
Na onal News
BB Regula ons 06
Banking Industry 07
Business and Economy 09
MTB News & Events 12
Capital Markets 14
Industry Appointments 15
Interna onal News
Business and Economy 17
Commodity Market 22
Economic Outlook 23
Economic Forecast 24

Volume: 05 | Issue: 05 | May-June 2014MTBiz2
The mobile industry is con nuing to see rapid growth in
connec ons, subscribers and data traffic, and is playing a pivotal
role in unlocking socio-economic progress across the world. Many
industry sectors are increasingly digi zing and mobilizing their
products and services, reducing costs and providing compelling
new experiences for consumers. More advanced devices (such as
smartphones and tablets) opera ng on increasingly ubiquitous
mobile broadband networks are allowing users to adopt an ever
growing range of new services and applica ons, which in turn is
driving an explosion in mobile data traffic. These transforma ons
and new services have been made possible thanks to the
significant investments that mobile operators have been making
to deliver the sustained growth and ubiquity of mobile broadband
connec vity.
Global market overview
The mobile industry has scaled drama cally over the last decade.
At the end of 2003, there were a li le over one billion unique
subscribers globally, equivalent to just under one in six people.
By the end of 2013 this figure had increased more than threefold
to 3.4 billion, equivalent to a unique subscriber penetra on rate
of 47%. By 2020, the majority of the world’s popula on (56%)
is expected to have their own mobile subscrip on. Mul -SIM
ownership means that at the end of 2013 there was a total of 6.9
billion SIM connec ons,
with an average of 1.8
ac veSIMcardsperunique
subscriber. The developed
market average unique
subscriber penetra on
figure is now 79%, which is
around the “demographic
ceiling” at which
subscriber growth tends to
stall (with many developed countries already above this level). In
contrast, unique subscriber penetra on on average in developing
markets is only 41%. This highlights the growth poten al for
mobile services in developing regions, with only four out of ten
people in these countries having subscribed to mobile services.
However, there are also challenges in many of these developing
markets, with incremental subscribers typically genera ng low
average revenues per user (“ARPUs”) and coming increasingly
from rural or remote areas, raising issues for operators about
how to bring services to these
lower income popula ons on
a cost effec ve basis.
Mul ple SIM ownership is
a feature of many markets
across the world, in both
developed and developing regions, driving a substan al
differen al between unique subscribers and SIM connec ons in
many markets. Global SIM penetra on now stands at 95%, and
the figure is already over 124% on average in developed markets.
We are now seeing a slowdown in the growth rate of connec ons
across all regions of the globe, linked to slower subscriber
penetra on growth. SIM connec ons have grown globally at a
Compound Annual Growth Rate (CAGR) of 11.3% p.a. in the five
years since 2008, but are now forecast to grow at a rate of 4.2% per
annum for the period out to 2020, less than half of the previous
growth rate. This will take the global penetra on rate by 2020
to 119%, with connec on penetra on passing through the 100%
level before the end of 2014. The total number of connec ons will
grow by almost another 2.3 billion by 2020: much of this growth
in new connec ons will come from developing markets; adding
2.1 billion connec ons over the next seven years.
ARTICLE OF THE MONTH
THE MOBILE ECONOMY 2020: 5% OF WORLD GDP
GDP
2013 Mobile Industry Impact
US$2.4tn
Mobile ecosystem directly contributed
around 1.3% of global GDP in 2013
US$ 870bnMobile operators
around 1%
Handset
manufacturers
around 0.1%
Distributers/
retailers
around 0.1%
Infrastructure and
support services
around 0.1%
$$
3.6%GLOBAL
GDP 2013
Mobile Industry estimated to contribute
around 5.1% of global GDP in 2020
2020 5.1%5.1%
Global Mobile Connections
(m, excluding M2M) SUB-SAHARAN AFRICA
NORTH AMERICA
MIDDLE EAST AND
NORTH AFRICA
LATIN AMERICA
EUROPE
COMMONWEALTH
OF INDEPENDENT
ASIA PACIFIC
20092008 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
4,039
4,665
5,369
6,029
6,465
6,886
7,385
7,800
8,153 8,457
8,723 8,960 9,179
CAGR 2008-2013 CAGR 2013-2017
5.1%
Global SIM Connections Mobile Broadband Growth
6.9bn
9.2bn
3.4bn3.4bn
2.2b2.2b
CAGRGR
3.5%CAGRGR
Note: excludes M2M
CONNECTIONS
2013
5.9b5.9b
CONNECTIONS
2020
Unique Subscribers
2013
4.3bn4.3bn
2020
2013-2020
56%
47%
2020
2013
of the people on the planet
LTE Networks
256 networks
In 97 Countries
2017 >500 networks
In 128 Countries
20132013
2013
20202020
4.2% 15%CAGR

Global mobile industry : Market segmenta on
The industry comprises
four major segments.
The Discoverer segment
includes markets mainly
in Africa and Southern
Asia, where unique
subscriber penetra on
s ll stands on average
at only a third of the
popula on. Unique
subscriber growth in
recent years has been
very strong, with this segment showing the highest growth rate
of any segment at 15% over the last five years. However, with
only one in three people having subscribed to a mobile service,
there is clearly significant growth to come.
The Fast Grower segment includes the major emerging
markets of China, Brazil, Russia and South Africa (markets
that together already accounted for a quarter of the world’s
total subscribers at the end of 2013), as well as a number of
other Eastern European, La n American and Asian countries.
Unique subscriber penetra on growth among this segment has
advanced at a steady pace over the last 10 years, reaching half
of the popula on in 2013. Connected players segment includes
many markets in the throes of recession, or with very minimal
GDP growth, such as those found in Europe. Mobile revenues
for this segment have con nued to decline over the last four
years, with revenue declines forecast to con nue albeit at a
more modest rate. Unique subscriber penetra on levels for the
Connected Player segment are among the highest in the world,
reaching 80% in 2009, with very limited growth since then.
The Digital Pioneer segment includes the most advanced
telecom markets in the world, including those in Northern
America, Eastern Asia and the Nordics. In contrast to the
Connected Players segment, mobile revenue growth for this
segment has remained in posi ve territory over the last four
years. While unique subscriber penetra on rates for the
segment are approaching the 80% threshold, this does not
appear to be impac ng revenue growth in the same way as in
the Connected Player segment.
Mobile broadband and smartphone uptake
Investment by operators
in deploying higher speed
networkshasdrivenstrong
growth in the number
of mobile broadband
(“MBB”) connec ons
over recent years, from
just over 200 million in
2008 to well over two
billion by 2013 (excluding M2M connec ons). Mobile broadband
is device agnos c and covers a range of technologies including
CDMA 2000; EV-DO; WCDMA HSPA; TD SCDMA; WiMAX and LTE.
Growth should remain strong in the future, with almost 4 billion
MBB connec ons forecast to be added in the period out to 2020.
HSPA allows operators to offer download speeds of over 14MBps,
and HSPA+ offers significantly higher speeds. A rac vely priced
proposi ons (and device subsidies) in many countries mean that
mobile broadband offers consumers a viable subs tute for a fixed
broadband connec on, especially in those markets where fixed
broadband penetra on is rela vely low or where fixed broadband
networks have not been fully upgraded to offer higher data
speeds. Operators have also encouraged adop on at the lower
end of the market for price-conscious consumers, by offering
tailored data plans that trend towards prepaid tariff structures.
The growth in mobile broadband connec ons in many regions
of the globe is being driven by rising smartphone penetra on.
According to data from Ericsson, around 55% of all mobile phones
sold in the second quarter of 2013 were smartphones, compared
to 50% in the first quarter and only 30% in 2012 as a whole. By
the end of 2013, there were just under 1.5 billion smartphones in
use, of which almost half were in Asia Pacific. Going forward, new
smartphone connec ons will largely come from the Asia-Pacific
region, with just under 900 million new smartphones expected in
the region in the period out to 2017.
Mobile ecosystem and its contribu on to global GDP
The mobile ecosystem makes a significant direct contribu on to
GDP as an industry in its own right, whilst there is also indirect
impact of the mobile industry on the wider economy, both
through raising produc vity for “highly mobile” workers as well
as in more informal areas such as small-holding based agriculture
MBB connections
215
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
364 624
1,030
1,530
2,163
2,774
3,332
3,886
4,435
4,964
5,465
5,934
(m, ex M2M)
CAGR 2008-2013 CAGR 2013-2020
Connection Type
2G
3G
2008
2020
2020
2020
3622m
2008
416m
4G
2008
1m
Note: excludes M2M
3,163m
3,898kbps
US$
US$
US$ US$
US$
1.2th
205bn
1.4th
576bn 2.9tn
3,732m
2,284m
2013
2020
2013
2020
2020
2013
Global Connection Speed
Revenues
189 kbps2010
2017
OPERATOR REVENUES
TOTAL
ECOSYSTEM
REVENUES
Annual revenue growth 16%
APPS, CONTENT AND ADVERTISING US$ 2tn
Smartphones Installed Base
2017
2013
2,890m
1,457m
237m
2008
(Source strategy Analytics)
54%CAGR

and fisheries services in developing markets. In 2013 the total
contribu on from the mobile industry was equivalent to 3.6%
of global GDP, while the mobile ecosystem directly supported
10.5 million jobs and contributed USD 336 billion to public
funding (even before considering regulatory and spectrum fees).
Mobile has empowered previously disenfranchised communi es,
bridging the digital divide by bringing voice services and Internet
access to the previously unconnected.
Empowerment through financial inclusion
Access to financial services through mobile can help low-income
households manage day-to-day risks and provide a safety net to
insulate them from financial shocks (e.g. a death in the family,
illness, job loss, or natural disasters). However, an es mated
2.5 billion people in lower and middle-income countries are
unbanked. The mobile technology opens up a wide window for
these unbanked people to grow under the banking umbrella and
thus accelerate the pace of financial inclusion which eventually
comes up with financial growth and empowerment.
Ensuring a healthy and prosperous digital future
The GSMA has iden fied four key growth areas that present
both significant opportuni es and benefits for consumers. These
areas also provide clear opportuni es for mobile operators to
collaborate and, in doing so, play an ac ve role in delivering them.
Delivering the digital future will require a more collabora ve
approach between mobile operators and other ecosystem
players. A new focus on collabora on will bring greater scale to
operator ac vi es in the global race to meet the needs of the
customer in the future.
The world of 2020 will offer a range of life enhancing services
powered by a vibrant mobile ecosystem that connects the
physical and digital worlds. The benefits of mobility will spread
beyond communica ons to provide drama c improvements in
sectors such as energy efficiency, security, health and educa on.
Looking to the future, the world will con nue to see robust
economic growth, but also a range of new challenges which
society will endeavour to meet. As much as USD 48 trillion will
have been added to the global economy as the world’s popula on
hits 7.7 billion and average GDP per capita jumps a staggering
50%. Emerging markets will con nue to grow in importance, with
45% of GDP now generated from urban areas. This will create a
new wave of middle class consump on. At a global level one in six
people will be over 60, which will have a drama c impact on core
public services such as health-care at a me when there are likely
to be ongoing pressures on government spending. Innova on in
technology presents the opportunity to address these pressing
needs of society. The combina on of strong growth in the
number of connected devices together with exponen al growth
in average data consump on highlight the important role that
connec vity will play in addressing these issues in 2020. When
coupled with innova ons in big data analy cs, cloud compu ng
and 3D prin ng the opportunity to connect the physical and the
digital provides a unique pla orm to improve quality of life and
produc vity.
Transforming learning through mEduca on
The tradi onal learning environment is rapidly being transformed
by non-tradi onal mobile technology environments that will
shape the future of educa on. mEduca on provides students,
teachers, employees and all learners with the ability to learn
anywhere, any me and on the move with educa onal content
made available over mobile networks to devices such as tablets,
smart phones and feature phones. mEduca on represents a
powerful shi in the way educa on is delivered and received.
It encompasses not only how learning is being delivered but
enhances teaching & assessment plus educa onal administra on
and management via mobile technologies. mEduca on is poised
to become a USD 70 billion market by 2020.
Connected car: Market to grow threefold within next five years
The global connected car market will be worth 39 billion in 2018
up from 13 billion in 2012, according to new forecasts from
research firm SBD and the GSMA. Over the next five years, there
will be an almost sevenfold increase in the number of new cars
equipped with factory-fi ed mobile connec vity designed to
meet demand among regulators and consumers for safety and
security features, as well as infotainment and naviga on services.
The rapid development of the global connected car market will
be driven in part by posi ve regional regulatory ac on in Europe,
Russia and Brazil.
Total mobile industry contribution to global GDP
2013 GDP impact (US$ Bn)
672
196
174
1325 2367
MOBILE
OPERATORS
MOBILE ECOSYSTEM
RELATED
INDUSTRIES
GENERAL
ECONOMY
PRODUCTIVITY
INCREASE
TOTAL IMPACT
10%
0.3%
0.3%
2.0%
3.6%
The world in 2020 (technology)
BIG DATAANALYTICS CLOUD TECHNOLOGY
Addressable amount of data for big data analytics
2013 2013 2020
2020
750EXABYTES
13,000EXABYTES 35%
75%
2013 2020
0%
5-20%
US$ 200 - 400 billion worth relevant products could
be 3D printable involving cost savings as well as added
value from customisation
Proportion of driverless or near driverless vehicles
US$200Bnto
US$ 400Bn

mHealth: Transforming health care
The mHealth Programme brings together
the mobile industry and health care
stakeholders to deliver sustainable
mHealth solu ons that extend the
reach and quality of healthcare while
reducing costs. As demand for mobile
technology accelerates and the various
players develop and expand their mobile
pla orms, the health care industry
address a host of challenges related to cloud compu ng, social
networks, big data analy cs and smart mobility.
Innova on for connected living: Mobile enabled smart ci es
Smart City makes extensive
use of informa on
and communica ons
technologies, including
mobile networks, to
improvethequalityoflifeof
its ci zens in a sustainable
way. It combines and
shares disparate data sets
captured by intelligently-connected infrastructure, ci zens and
vehicles, to generate new insights and provide ubiquitous services
that enable people to access informa on about city services,
move around easily, improve the efficiency of city opera ons,
enhance security fuel economic ac vity and increase resilience
to natural disasters.
Empowering people and society
The rapid spread of mobile technology has had a profound socio-
economic impact on the economies of every country in the world.
This impact is not only deep but broad, spanning many aspects of
economic, poli cal and social life, making a striking contribu on
to everything from cross-sector innova on to GDP growth. The
mobile industry is a cornerstone of the global economy; this
is evident both through the direct impact of mobile industry
ecosystem, and through the indirect role that mobile technologies
are playing in adjacent industry sectors. The mobile industry
made a total contribu on of around 3.6% of global GDP in 2013.
This includes a direct contribu on from the mobile ecosystem of
USD 870 billion (1.3% of GDP), measured on the basis of “value
add” (es mated as gross profit, or revenue less direct cost of
sales). The mobile operators made the largest contribu on to this
figure, equivalent to 1% of global GDP.
Network 2020: Key pillar of the digital future
Mobile networks will be at the heart of the all-IP mobile
broadband era. They will serve an ever increasing volume of data,
enabling a vast array of innova ve services. In order to be able
to provide connec vity on a cost-effec ve and sustainable basis,
mobile networks will need to be smarter, responsive, modular,
flexible, scalable, adaptable and open.
Driving digital inclusion in the developing world
Mobile connec vity has transformed daily life across the globe,
but mobile is playing a par cularly strong role in socio-economic
development in many developing regions of the world. In some of
the least developed regions, such as parts of Sub-Saharan Africa
(“SSA”), there are much higher levels of mobile access compared
to other basic services, such as electricity, sanita on and financial
services. For example, in Nigeria there are 56 million people living
without access to electricity, and 38 million without access to
clean water. However, most of the popula on have the poten al
to access health, banking and other essen al services through
mobile networks (with network coverage for some operators at
90% of the popula on).
Value of connec vity: Economic and social benefits
As part of its global
partnership, Internet.org,
Facebook commissioned
a study to examine how
extending internet access
can change economies
and socie es in
developing countries and
what benefits it would
generate on a number of economic and social dimensions. The
findings suggest that if developing countries could bridge the
gap in internet penetra on to reach levels developed economies
enjoy today, they would experience large increases in GDP growth
and produc vity and improvements in health condi ons and
educa on opportuni es. The study es mates that the resul ng
economic ac vity could generate USD 2.2 trillion in addi onal
GDP, a 72% increase in the GDP growth rate, and more than 140
million new jobs.
Driving the digital dividend
The most important new spectrum that has been allocated for
mobile use in recent years is the Digital Dividend. This refers
to the frequency bands made available for mobile broadband
as terrestrial television broadcasters start to use their vast
spectrum resources more efficiently – by adop ng digital radio
transmissions.
Digital Dividend bands are at rela vely low frequencies so have
excellent coverage proper es, making them a crucial means of
providing mobile broadband to rural areas in both developed
and developing markets where fixed-broadband frequently fails
to reach. This offers a unique opportunity to ensure that the
economic and social benefits of broadband can be enjoyed by all.
The first phase of this transi on is currently in progress with new
4G networks opera ng in the 800MHz band in many na ons in
Europe, Africa and Middle East, and in the 700MHz band in the
Americas and Asia Pacific.
In 2015, a cri cal second phase should begin if the ITU gives final
approval for the 700MHz band to be allocated to 4G services
in Europe, Africa and the Middle East. This will provide vital
addi onal mobile capacity in these regions as well as create a
global 4G band which will help reduce the cost of mobile devices.
However, emerging markets will only be able to benefit from 4G
networks opera ng on Digital Dividend spectrum if consumers
can afford the devices. This is why the GSMA is driving industry
dialogue on how it can foster a new genera on of low-cost LTE
devices which will open up the Internet to millions of new users.

No me for leave!
Dr. A ur Rahman, governor of
Bangladesh Bank (BB), did not
take any leave or day off from
his du es as the chief of the
country’s central bank in the
past five years. The results out
of his enduring and passionate
endeavor have gone beyond the
horizon of the country’s banking
sector. Dr. Rahman was made the
10th
governor on May 3, 2009.
The first visible outcome of his
set of new strategies was in the
monetary policy that became more par cipatory than before.
The average growth in the GDP in the past four years was 6.33%
and it was expected that GDP growth would be above 6.0% at
the end of this financial year. He made CSR and green banking
rewarding for both the banks and the consumers that a racted
a en on of central banks of different countries. Digi za on of
banking sector including launching of online payment gateway,
e-commerce, internet banking and mobile banking took the
banking sectors towards the people’s doorsteps. Introduc on
of Taka-10 account for farmers, garment workers, students and
the recipients of benefits under the social safety- net programs
also brought a huge popula on under banking network. The
mul -level successes brought BB and the country some notable
interna onal recogni ons including stable ra ngs from Moody’s
and Standard and Poor’s when the JP Morgan puts the name of
the country on the list of “Fron er Five” in the field of economic
development. Goldman Sachs included Bangladesh in its “Next
Eleven” list.
BB gets sizeable responses from school banking
Bangladesh Bank has introduced the school banking system as
part of the bank’s efforts to spread financial inclusion across
the country and encourage the students to develop a saving-
habit from an early age. According to SK Sur Chowdhury, Deputy
Governor of the Bank, school banking will create scope to acquaint
the new genera on with banking opera ons and a saving-habit
that will take financial inclusion into a new era in the country.
According to the sta s cs available with the central state bank,
295,000 students have opened accounts under school banking in
the country and the deposited amount stands at around BDT 300
crore ll December 2013.
GDP growth to remain close to 6%: BB
According to Bangladesh
Bank analysis tled
‘Five Years of Changes
and Transforma ons:
Bangladesh Bank’, the
country’s GDP growth
is expected to remain
close to 6% at the
end of the current
fiscal year (FY 2013-14) though the country witnessed 6.33%
growth in the last four fiscal years (2010-2013) on average. The
government has revised down fiscal 2013-14’s GDP growth target
to 6.5% from 7.2%. The central bank analysis observed that the
country’s overall economy remained comfortable in the last five
years. Meanwhile, the first nine months of the current fiscal year
witnessed a remi ance inflow of USD 10.49 billion.
A paradigm shi in the policy regime of Bangladesh Bank: BB
Governor
Bangladesh Bank (BB)
Governor Dr. A ur Rahman
ar culated that the banking
sector lent BDT 395 crore
to 3,317 new women
entrepreneurs in the last
one year (2013), the number
being 5% of the total
new SME borrowers. He
highlighted that half of our
popula on are women and
most of them are jobless.
Unless we engage them in
ac vi es where they have compe ve edge over others, we
will be losing na onal output by underu lizing their skills and
crea ve/innova ve ideas. BB governor emphasized that in the
last five years, a paradigm shi has taken place in the policy
regime of Bangladesh Bank, especially in the areas of SME
and agriculture financing, which is somewhat unconven onal.
Inclusiveness in all aspects of BB’s policy has been priori zed.
Women entrepreneurship development is one of the important
dimensions of that inclusive policy.
BB to introduce rules on outsourcing by banks
The central bank is going to introduce guidelines on outsourcing
arrangements for the banks to avert risks and monitor compliance
with regulatory requirements. Central bank wants to finalize the
guidelines, to be introduced for the first me in Bangladesh,
based on the opinions by the stakeholders. According to the
dra guidelines, the banks should only outsource the ac vi es
which can be effec vely supervised by them and compliance with
legal and regulatory requirements can be monitored.
The banks shall not, however, outsource core management
func ons that require effec ve involvement of Board and senior
management, including Internal Audit, Control, Compliance and
Treasury func ons, ‘Know Your Customer exercise for deposit
accounts, Credit evalua on and sanc oning.
BB relaxes rules for enterprises in EPZs seeking foreign loan
The central bank
has relaxed foreign
exchange regula ons
allowing all industrial
enterprises in export
processing zones (EPZs)
to borrow medium
and long-term loan
from overseas sources.
Under the relaxed
regula ons, industrial units in the EPZs will submit borrowing
approval applica ons and related documents as per proforma
of the Guidelines for Foreign Exchange Transac ons (GFET, 2009
edi on), through their nominated authorized dealer banks for
onward referral via the Bangladesh Export Processing Zones
Authority (BEPZA) to the Bangladesh Bank (BB).
The borrowing proposals forwarded to the BB by the BEPZA will
be scru nized at the Foreign Exchange Investment Department
(FEID) of the central bank and disposed of with decisions at the
governor’s level, according to an instruc on. The instruc on
also said the decisions will be communicated simultaneously to
the BEPZA, the applicant EPZ units, and their authorized dealers
concerned.
NATIONAL NEWS BB REGULATIONS

Number of bank depositor booms to BDT 6.12 crore in 5 years
The number of depositors with banks has soared by 63% to
6.12 crore in the last five years, according to Bangladesh Bank
(BB) data, as it became main means of saving surplus incomes of
middle-class people. BB data show that the number of depositors
jumped to BDT 6.12 crore at the end of December 2013 from
BDT 3.76 crore in January 2009. Total deposited amount with the
banks stood at BDT 588933.20 crore at the end of February 2014.
Central bank’s data for the year 2013 show that the yearly rise in
deposits was slightly above 16% while the jump in the 2012 was
at around 20% over the previous year.
New private banks out of default loan danger
According to Bangladesh Bank officials, the nine new commercial
banks (South Bangla Agricultural and Commerce Bank Ltd., NBR
Commercial Bank Ltd., Meghna Bank Ltd., Midland Bank Ltd.,
The Farmers Bank Ltd., NRB Bank Ltd., Modhumo Bank Ltd.,
NRB Global Bank Ltd. and Union Bank Ltd.) have no default loans
during the October-December quarter of 2013 as their disbursed
loans were li le as compared to other commercial banks. Default
loans in banks rose by 1.52 percentage point or BDT 7,589 crore
in the first quarter this year (2014), compared to the quarter that
ended in December last year (2013).
City Bank launches American Express®B2B Solu on
City Bank has partnered with American Express to introduce the
American Express B2B Expense Management Solu on, a unique
end-to-end solu on that will help companies in Bangladesh
reduce their cost of doing business. Rahimafrooz Distribu on
Ltd. and Recki Benckiser Bangladesh Ltd. are the first in the
market to implement this solu on with their distributor network.
The American Express B2B Expense Management Solu on will
reside on American Express’ Corporate Card Pla orm and will
help streamline and simplify companies’ distribu on payment
chain from paper based to electronic based. Once implemented,
distributors adop ng the American Express B2B Expense
Management Solu on will enjoy improved opera onal efficiency,
as invoicing and payments will be electronically processed and
will gain cost savings through an interest free credit period.
Singer joins hands with Bank Asia to disburse remi ance
Singer Bangladesh, an
electronics and home
appliances retailer,
has partnered with
Bank Asia and Western Union to provide money transfer services.
With the help of Bank Asia, selected Singer outlets will distribute
remi ances that will come in through Western Union, a global
money transfer company. Money can be remi ed from more
than 200 countries through Western Union and can be withdrawn
from 371 Singer Mega and Singer Plus outlets across the country.
Singer will make the payments on behalf of Bank Asia. Singer
integrated its data system -- Singer Informa on System -- with
Bank Asia and Western Union. Bank Asia will work as a se lement
bank by being a principle agent of Western Union.
FSIBL signs deal with Peninsula Hotel Chi agong
First Security Islami Bank Limited (FSIBL) signed an agreement
with The Peninsula Hotel Chi agong Limited recently. Azam
Khan, Head of Marke ng and Development Division, FSIBL and
Kamal Hossain Execu ve,
Sales and Marke ng,
the Peninsula Hotel
Chi agong Limited
signed the agreement on
behalf of their respec ve
sides. Under the
agreement, employees
of FSIBL will enjoy various privileges at The Peninsula Hotel
Chi agong Limited.
FSIBL Signs three Corporate Health Care Agreements
First Security Islami Bank Limited (FSIBL) recently signed a
Corporate Health Care agreement for FSIBL Employees with
Shahabuddin Medical College Hospital, Dhaka, Na onal Hospital
Cha agram Ltd. & Sigma Lab Ltd., Chi agong for medical services.
Dhaka Bank Ltd. handed over of Memento of apprecia on to
Square Toiletries Ltd.
Mr. Niaz Habib Managing
Director (MD) of Dhaka
Bank Ltd., on behalf of the
Board of Directors as well
as the Management of
Dhaka Bank Ltd., recently
handed over a memento
of apprecia on to the
Mr. Anjan Chowdhury,
Managing Director, Square Toiletries Ltd. Deputy Managing
Director Mr. Emranul Huq and Head of Communica ons &
Branding Division Mr. Khandaker Anwar Ehtesham of Dhaka
Bank were present on the occasion.
NBL Money Transfer branch opened in Malaysia
The 8th
branch of NBL
Money Transfer was
inaugurated at Melaka
in Malaysia recently.
Parveen Haque Sikder,
Director and Chairperson,
Execu ve Commi ee,
Na onal Bank Limited
inaugurated the branch as chief guest. A large number of
Bangladeshi expatriates living in Malaysia also a ended the
inaugural ceremony.
UCBsignssyndicatedtermloanofUSD6.60millionwithSRLMarine
A term sheet
signing ceremony
was executed
between United
Commercial Bank
Limited (UCB)
and SRL Marine
Products Limited (SMPL) at the Corporate Head Office of UCB
recently. UCB will act as Facility Arranger for raising the Syndicated
Term Loan of USD 6.60 million in favor of SMPL in order to set up
a 100% export oriented sea food processing plant at Ichanagar,
Chi agong.
NATIONAL NEWS BANKING INDUSTRY

Rupali Bank wins ICMAB award
The state-owned Rupali
Bank Limited received Best
Corporate Award-2013 for
ensuring accountability
and good governance.
The Ins tute of Cost and
Management Accountants
of Bangladesh (ICMAB)
announced Rupali Bank as best bank of the country a er
evalua on annual statement of the financial ins tu ons in 2013.
EBL Introduces Diners Club Interna onal Cards in Bangladesh
Eastern Bank Ltd. (EBL)
recently declared the
launching of an exclusive
range of cards in
associa on with Diners
Club Interna onal, a
business unit of Discover
Financial Services. EBL
Diners Club cardholders would have direct and hassle-free access
to the Diners Club Airport Lounge Program, which offers access
to more than 500 lounges worldwide. In addi on, the cardholder
would have complimentary access to the Sky Lounge facili es at
Hazrat Shahjalal Interna onal Airport.
UCB announced as the Best Emerging Market Bank in Asia Pacific
One of the most pres gious business
magazines in the world, ‘Global Finance’
hasrecentlypublishedtheirlistofawardees
of the Best Banks in Asia Pacific for the year
2014. This list includes names of 30 banks
from the Asia Pacific Region. The names of
the banks have been selected through a
strict survey. They have been announced
based on their performances and their
services provided to their customers.
United Commercial Bank Limited of
Bangladesh has been selected as one of
the Best Emerging Market Banks by Global Finance, in the Asia
Pacific Region.
IFIC Bank signs mobile banking deal with a BEXIMCO company
IFIC Bank Limited signed an agreement with a BEXIMCO company
– Interna onal Knitwear and Appareals Limited – at the BEXIMCO
Industrial Park at Kashimpur under Gazipur district for offering
various mobile banking services. Under the agreement, workers
and officials of the company will be able to enjoy various banking
services including salary and wages disbursement by using mobile
handsets.
Bank Asia mobile financial service ‘Hello’ launched
The Bank Asia has launched its mobile financial service ‘Hello’
aiming to bring huge number of unbanked popula on of the
country under financial service network. The new ini a ve
has a number of features including cash-in, cash-out, foreign
remi ance payment, fund
transfer, u lity bill payment,
merchant payment, salary
disbursement and tui on
fee collec on. Bangladesh
BancNet Ltd. will provide
required system support and
distribu on management
services to the project.
NRB Bank signs agreement with CRAB
NRB Bank Ltd. and
Credit Ra ng Agency of
Bangladesh Ltd. (CRAB)
signed an agreement at
NRB Bank head office
recently. Muklesur Rahman,
Managing Director & CEO,
NRB Bank and Hamidul Huq, Managing Director of Credit Ra ng
Agency of Bangladesh Ltd., signed the deal on behalf of their
respec ve organiza ons.
Jamuna Bank, Progo Systems sign ‘SureCash Mobile Financial
Services’ deal
Jamuna Bank has signed
Jamuna SureCash Mobile
Financial Services agreement
with Progo Systems Limited
(PSL) at the bank head office.
As per the agreement,
Jamuna Bank has joined the
SureCash mobile financial
services network to deliver mobile banking and payment services
to their customers under the Jamuna SureCash brand name.
Using this service, a customer can open new account, deposit
money or withdraw cash at any authorized SureCash agent. A
customer may also send money to another customer, receive
salary or pay bills from his account using his own phone without
visi ng any bank branch.
Standard Chartered Bank signs a deal with DuSai Hotel &
Resorts Ltd.
Standard Chartered Bank
(SCB) signs a deal with
DuSai Hotel & Resorts
Ltd. recently. Under
the deal, DuSai Resort
will provide a range of
exclusive benefits to
Standard Chartered Bank employees, VISA Signature and VISA/
MasterCard Pla num credit or Priority Banking branded debit
cardholders.
BRAC Bank launches home loan for low, middle-income people
outside Dhaka
BRAC Bank has introduced
an affordable home loan
product ‘Nijer Bari’ for the
low and middle-income
group people outside Dhaka
city. Sir Fazle Hasan Abed,
Chairman, BRAC Bank
Limited, formally launched
the product at a programme recently at the bank’s headquarter in
Dhaka by handing over the Loan Sanc on Le er to Suriya Begum,
who is the first customer of Nijer Bari, BRAC Bank.
NATIONAL NEWS BANKING INDUSTRY
United Commercial Bank Ltd.

BD an increasingly a rac ve FDI des na on: UNCTAD
Dr. Mukhisa Kituyi, Secretary
General of United Na ons
Conference on Trade and
Development(UNCTAD),iden fied
Bangladesh as an increasingly
a rac ve des na on for Foreign
Direct Investment (FDI) in the
sixth session of the Investment,
Enterprise and Development
Commission of UNCTAD held in
Geneva recently. He emphasized
that the Investment Policy
Review (IPR) reflects the desire
of Bangladesh to build a successful investment framework and
policy environment that a racts not only foreign investors,
but also promotes domes c private sector development. On
the regulatory side, the IPR called for se ng out in a clear and
transparent manner the condi ons for investment, enlarging
the scope of the Foreign Private Investment Promo on and
Protec on Act of 1980 (FPIPPA) and reconsidering the regulatory
func ons of the Board of Investment.
Bangladesh gets duty-free market access to 37 countries
Presently, a total of 37
countries, including 27
member states of the
European Union (EU),
have been giving duty
free market facili es for
Bangladeshi products.
According to the Ministry
of Commerce, India has
given duty and quota
free market access to all
Bangladeshi products
except 25 tobacco and
drug items under South
Asian Free Trade Area (SAFTA) of the South Asian Associa on for
Regional Coopera on (SAARC). Bangladeshi products that are
ge ng duty free market access include readymade garments,
knitwear items, frozen shrimp, ceramics, plas c products, leather
and jute products, home tex les, bicycles and pharmaceu cals
items.
BDT 650 billion income tax collec on target likely for FY ‘15
The government is likely
to fix a target of mobilizing
BDT 650 billion as income
tax for the next Fiscal Year
(FY) 2014-15 by increasing
the collec on of withholding
tax and taking a few new tax
measures. The target, if fixed,
would be 35.41% higher than
that of the current fiscal. The
withholding tax, known as
Advance Income Tax (AIT),
currently contributes some
53% of the aggregate income tax collec on. It is likely to witness a
substan al rise in the next fiscal through new measures. Income
tax would cons tute some 44% of the aggregate tax collec on
target for FY 2014-15 -- about BDT 1.49 trillion against the current
BDT 1.25 trillion.
Air condi oner, refrigerator see record sales as summer begins
The country is experiencing a sweltering heat with the
creeping up mercury mercilessly, promp ng the city dwellers
to buy electronic home appliances such as air condi oner and
refrigerator. Producers and importers say they are in pressure to
supply the home appliances to meet the escala ng customers’
demand for the same as most of their stocks are coming to an end
gradually. According to Execu ve Director of Walton Marke ng
Department, sale of air condi oner of Walton increased by 38%
in the last three months (February-April). He said last year (2013)
Walton has sold out around 15,000 air condi oners and this year
(2014) they set a target to sell 30,000-35000 air condi oners
considering the rising demand.
Structural reform needed to sustain global recovery: ICCB
According to Interna onal Chamber
of Commerce-Bangladesh (ICCB), the
world gross product (WGP) forecasted
to grow at a pace of 3.0% and 3.3%
in 2014 and 2015 respec vely. It said
the euro zone has finally come out
of a protracted recession with gross
domes c product star ng to grow
again,theeconomyoftheUScon nues
to recover and a few large emerging
economies, including China seem to
have stopped a further slowdown.
Growth of world exports was projected to be 4.6% in 2014 and
5.1% in 2015. In addi on to macro-economic policies, the ICCB
reported many countries, both developed and developing, have
undertaken various ins tu onal reforms, including reforms in
social security, income distribu on, financial sector, taxa on,
energy, transporta on, educa on and healthcare.
BDtogetduty-freeandquota-freeaccesstoChilemarketfromJan’15
According to Commerce
Minister Mr. Tofail Ahmed,
Bangladesh will sign a
preferen al trade agreement
(PTA) with Chile soon. Chile
has decided to provide quota-
free and duty-free market
access for Bangladesh from
1st
January 2015. Bangladesh is preparing a dra agreement
to sign the PTA with Chile. He said Bangladesh is hopeful of
retaining the Generalized System of Preferences (GSP) from the
U.S., as many of the condi ons were fulfilled. The two countries
have signed TICFA, which will help expand Bangladeshi products’
market there.
ECNEC endorsed BDT 4.35 billion development projects
The execu ve commi ee of the na onal economic council
(ECNEC), in its 22nd
mee ng of the current financial year (FY) 2013-
14, presided over by the Prime Minister Sheikh Hasina, endorsed
the development projects at the Planning Commission office. The
ECNEC recently gave its stamp of approval to four development
projects at a combined cost of BDT 4.35 billion where BDT 3.17
billion funds will come from the government’s own exchequer and
the rest BDT 996 million from the external sources. The ECNEC
approved the Manikkhali Bridge on the Asashuni-Paikgacha road
project at a cost of BDT 1.09 billion, Goalpara sub-sta on project
at a cost of BDT 1.62 billion, development and expansion of the
Chi agong Engineering and Technology University project at a
cost of BDT 692.9 million and the ensuring employment for the
poor at the northern region project at a cost of BDT 948.8 million.
NATIONAL NEWS BUSINESS AND ECONOMY
(Figure in Percentage)
100
80
60
40
20
0
1972-73 1980-81
Direct tax Indirect tax
Projection
1990-91 2000-01 2010-11 2020-21
Direct & Indirect Tax Ratio
90.3
86.2
80 80.4
78.8
51
49
29.2
19.420
13.8
9.7
Source: NBR

BDT 79,031 crore ADP for next fiscal
The government has decided to allocate BDT 79,031 crore for
the annual development program (ADP) in the financial year (FY)
2014–15, and priori se the communica ons sector in the ADP.
The proposed size of the new ADP is 24% higher compared to the
revised ADP of the current fiscal year, and 17% higher than the
original ADP. The planning ministry has decided to allocate BDT
18,098 crore for the communica ons sector, including BDT 8,100
crore for the much-hyped Padma Mul purpose Bridge (PMB)
project. Under the ADP alloca on, the Planning Commission
has allo ed BDT. 6,852 crore for construc on of the PMB in the
current fiscal. Of the total outlay of the ADP for FY 2014–15, BDT
51,331 crore (65%) will come from government funds and the rest
BDT 27,700 crore will be arranged from project assistance.
23% of commercial loan goes to SMEs: CPD
According to the
survey conducted
by Centre for Policy
Dialogue (CPD), about
23% of the country’s
total commercial
loan, disbursed by the
financial ins tu ons,
in last year (2013)
went to the Small and
Medium Scale Enterprises (SMEs). Of the total SME loan por olio,
only 3.2% loan was disbursed among the women entrepreneurs.
Survey report ar culated that lack of knowledge and gathering
informa on is one of the obstacles to credit access for women
entrepreneurs which also consume an unusual span of me. It
is also difficult for entrepreneurs belonging to lower middle
class group to provide collaterals for sanc oning the loans. Most
of the banks have women dedicated desk to promote Women
entrepreneurs.
Leather industry hits record exports
According to data from the Export Promo on Bureau (EPB), the
leather industry has crossed the record USD 1 billion mark in
exports in the first ten months of this fiscal year (2013-14) on the
back of compe ve pricing and quality improvement. Between
July and April, the leather industry exported USD 1.06 billion of
products, whereas the exports receipts for the whole of fiscal
2012-13 stood at USD 980.67 million. Leather goods exports,
as EPB data shows, rose 70.14% to USD 197.36 million in the first
ten months of this fiscal year, while it was 33.90% to USD 424.05
million in leather and 30.24% to USD 443.54 million in footwear.
According to BB, between July and January, leather shipment rose
45.38% year-on-year in terms of value.
NBR to recommend BDT 20 crore fee on foreign channels
A commi ee of the Na onal Board Revenue (NBR) has decided to
suggest the informa on ministry to impose a fee of BDT 20 crore
on every foreign satellite channel for entering Bangladesh. NBR
said that the commi ee led by revenue board member (income
tax policy) recently made the decision in order to protect local
culture from the aggression of foreign satellite channels and in
a bid to ensure proper revenue collec on from the sector. The
commi ee, consisted of representa ves of the revenue board
and Associa on of Television Channel Owners of Bangladesh, also
decided to recommend digi sa on of the channel distribu on
system to ministries concerned to ensure collec on of value-
added tax from the sector.
Microcredit accounts for 33% of country’s total credit: Muhith
Finance Minister AMA
Muhith recently said
that microcredit is
one of the tools for
poverty allevia on
while healthcare and educa on should also be provided to the
poor along with loan to li them from poverty level. He said
microcredit was only 4% of the total volume of loan in 1986
before the establishment of Palli Karma-Sahayak Founda on
(PKSF) which was provided by the Grameen Bank alone. Now
the microcredit makes up 33% of the total loan and 5% of the
microcredit is being disbursed among the women. Terming PKSF
a ‘bank’ to the microcredit ins tu ons Muhith said that it has
expanded microfinance to a large extent as it usually provides
around BDT 3.5 billion credit through its 200 big and small micro
lending ins tu ons.
Banks, telcos seek access to na onal ID database
Banks and telecom
operators recently
urged the government
to immediately create
an integrated pla orm
enabling them to access
the na onal iden ty
database for checking
the authen city of informa on. Mobile operators have to follow
a similar process as banks when signing on new customers, so
there is an urgent need to set up a common pla orm where the
legi macy of informa on, photograph and na onal iden ty card
(NID) can be verified. Provided the Elec on Commission changes
the law and gives permission to the central bank, BB will open
a portal to share NID data with private banks and non-banking
financial ins tu on. In that case, BB will behave like a service
provider and not a regulator.
Raising exports to spur economic growth
Bangladesh’s economy has
achieved an average growth
of 6.0% over the last five years
primarily due to the healthy
inflow of remi ance and rising
exports. Both the exports
and the remi ance flow from
expatriate Bangladeshis have
doubled over the last five years.
Palli Karma-Sahayak
Foundation(PKSF)
cjøx
Kg©-mnvqK
dvD‡Ûkb
226.1
29.06
204.09
297.83
55.42
297.8
330.16
99.36
335.51
399.73
161.62
419.32
424.05
197.36
443.54
LEATHER INDUSTRY EXPORTS
in millions of $
LEATHER FOOTWEARLEATHER PRODUCT
FY10 FY11 FY12 FY13 FY14 (Jul-April)

Bangladesh’s economy has progressed over the past five years
despite various challenges like the global economic downturn
and the country’s res ve poli cs marked by frequent strikes. The
finance minister expects that the export income will increase in
the coming days. According to him, the yearly export earnings will
be USD 75 million within the next five years and will cross the
target of USD 30.05 billion in the current fiscal year, 2013-14.
Pay-roll tax from FY ‘16 to raise tax revenue: Muhith
According to Finance Minister AMA Muhith, the government
would consider imposi on of ‘pay-roll’ tax from the fiscal year (FY)
2015-16 to increase tax revenue collec on from the organized
sector. The organized sector is now quite big with some 20 million
employees that could contribute a significant amount of tax to
the public exchequer. He implied that tax might be imposed on
all of the organized sectors that have pay-rolls. It may not be
introduced in next year (2015). However, it will start the process
so that it can be introduced from the fiscal year 2015-16.
Economy likely to rebound in FY ‘15
The Asian Development
Bank (ADB) said, in
its latest Bangladesh
Economic Update,
Bangladesh’s economic
growth is expected to
rebound to 6.2% in the coming fiscal year (2014-15), aided by
higher remi ance and buoyant exports. The ADB said 6.2%
growth is possible following a likely rise in consumer and investor
confidence with the stabiliza on of poli cal situa on that would
s mulate demand and strengthen growth momentum. The
ADB said the agriculture growth accoun ng for 20% of the GDP
is expected to rise to 3.0% in the FY 2014. It said the output of
two crops -Aus and Aman - increased this fiscal year (2013-14)
over that of the previous year (2012-13). The mul lateral lending
agency suggested that Bangladesh needed to boost investment
in infrastructure and skills development to raise the economy’s
produc ve capacity and shi the economy to a 7.0-8.0% growth
trajectory.
Padma Bridge to receive BDT 81 billion in next budget for FY
2014-15
The Padma Bridge Project is likely to receive an alloca on of
BDT 81 billion in the budget for the next fiscal (2014-15). The
alloca on would include the en re USD 200 million or BDT 16
billion grant component of the Indian assistance worth USD 1.0
billion made available in 2010 for development of infrastructure
in Bangladesh. The likely alloca on for the bridge project is BDT
60 billion higher than the alloca on made in the Revised Annual
Development Program (RADP) of the current financial year (FY)
2013-14. In the original ADP for the current FY2013-14, the
government had allocated BDT 68.52 billion for the project. Later,
the alloca on was downsized to BDT 21 billion in the RADP due to
non-u liza on of the allocated fund.

MTB NEWS & EVENTS
Date : Apr 12, 2014
Venue : Naogaon 6500
INAUGURATION OF ETTIHAD PLASTIC BAG INDUSTRIES LTD
(FINANCED BY MTB SME LIGHT ENGINEERING)
Mutual Trust Bank Ltd. (MTB) recently organized the
Branch An -Money Laundering Compliance Oﬃcers’
(BAMLCO) Conference 2014 on An -Money Laundering
(AML) and comba ng the Financing of Terrorism (CFT)
at Bangladesh Academy for Rural Development (BARD),
Comilla.
Date : Apr 05, 2014
Venue : BARD, Comilla 3503
MTB BAMLCO CONFERENCE 2014
Mutual Trust Bank Ltd. (MTB) recently signed a
Memorandum of Understanding (MoU) with Jamuna
Resort Limited (JRL) at a simple ceremony held at MTB
Corporate Head Oﬃce.
Date : May 06, 2014
Venue : MTB Centre, Dhaka 1212
MTB SIGNS MoU WITH JAMUNA RESORT LTD

MTB NEWS & EVENTS
MTB SCHOOL BANKING CAMPAIGN 2014
Date : May 05, 2014
Venue : Mirpur, Dhaka 1216
Date : May 12, 2014
Venue : Dania, Dhaka 1236
Date : Apr 15, 2014
Venue : Mo jheel, Dhaka 1000
Date : May 09, 2014
Venue : Rangpur 5400
Date : Apr 12, 2014
Venue : Agrabad, Chi agong 4000
Date : May 03, 2014
Venue : Sylhet 3100

BB, BSEC to work closely for capital market stability
The central bank and the securi es regulator have decided to
work closely for ensuring stability in the country’s capital market.
The decision was taken recently at a mee ng of the senior officials
of the Bangladesh Securi es and Exchange Commission (BSEC)
held at the Bangladesh Bank (BB). According to the decision,
the investment of banks in the capital market will be adjusted in
line with the Banking Companies (Amended) Act 2013 without
hampering the capital market growth. The mee ng also discussed
different issues including the implementa on of rules and
regula ons rela ng to share market exposures by the banks in
line with the Banking Companies Act. Under the new provisions,
the market value of the total investment of a banking company
in the capital market on a consolidated basis will not exceed 50%
of the sum of its consolidated paid-up capital, balance in share
premium account, statutory reserve and retained earnings as
stated in the latest audited financial statements.
DSE plans to scrap lot-based trading system
The Dhaka Stock Exchange
plans to scrap the exis ng
lot-based trading of shares
by October 2014 in a bid
to reduce investors’ hassle
in trading odd-lot shares.
Once the bourse scraps
the lot-based trading
system, the investors will be able to trade any amount of shares.
When any company issues stock dividends, in most of the cases,
shares of such stocks become odd lot and investors face difficulty
to sell them. As per the exis ng process, investors are supposed
to trade shares in lots. Lot differs from company to company
as 10 shares of some companies make a lot while others make
a lot in 50 shares. The DSE on March 21 signed an agreement
with NASDAQ OMX, an American mul na onal financial services
corpora on, for purchasing a matching engine and FlexTrade, a
US-based mul na onal company, for order management system.
‘Z’ category companies on rise
A company will have to recommend at least 10% dividend to exist
in ‘A’ category. A company will exist in ‘B’ category if it declares
the dividend which will be below 10% and above zero per cent.
And a company will be shi ed to ‘Z’ category for not holding AGM
(annual general mee ng) regularly or for not recommending any
dividend or for not having con nuous opera on for more than
six months. The number of ‘Z’ category companies con nued to
rise in both the bourses as a good number of ‘A’ and ‘B’ category
companies and newly listed ones have been placed to the poor
performers’ group following their failure to recommend any
dividends. Some companies have told that they have failed to
recommend any dividend for the year ended on December 31,
2013 due to loss incurred in last quarter of that year (2013).
According to data available on Dhaka Stock Exchange (DSE), 11 ‘A’
category companies were shi ed to ‘Z’ category group during the
period of March 31, 2013 to May 4, 2014.
Foreign investment in DSE jumps manifold in April
Net foreign investment
in the Dhaka stock
market rose to a record
BDT 572 crore by nearly
six mes in April 2014
from the previous
month, as overseas
investors injected fresh
funds into mul na onal
companies. According to
data from Dhaka Stock Exchange, foreign investors bought shares
worth BDT 876.44 crore and sold shares worth BDT 304.35 crore
in April. Lucra ve dividends declared by mul na onal companies
encouraged the investors to park money in the securi es. Banks
were ini ally the foreign investors’ preferred sector, but non-
bank financial ins tu ons, power and energy, pharmaceu cals,
mul na onals, telecoms and IT also caught their a en on.
According to the DSE, during January-April period, foreign
investors bought shares worth BDT 1,811.91 crore and sold
shares worth BDT 743.45 crore to yield a net investment of BDT
1,068.46 crore.
HC cancels 2% share rule for directors
The High Court recently
scrapped a provision
imposed by the
Securi es and Exchange
Commission for sponsor-
directors to individually
hold at least 2% shares
in listed companies.
Hearing a pe on filed
by a sponsor shareholder
of NCC Bank, the HC said
the provision has superseded Banking Companies Act 1940 that
governs the banking sector. According to the pe oner’s counsel,
the judgment is effec ve for all concerned, and there is no need
for sponsor-directors to hold the minimum 2% shares of the paid-
up capital of the listed companies. Jus ce Quazi Reza-Ul Hoque
and Jus ce ABM Altaf Hossain passed the verdict a er hearing
the writ pe on filed by a sponsor shareholder of NCC Bank.
Coordinated regulatory regime a sine qua non
The first priority of the
chairman (CSE) of the
demutualised stock
exchange is to help bring
transparency in capital
market, help crea ng an
enabling environment to
restore and strengthen
the confidence of
investors at large and small and medium investors in par cular.
According to the CSE chairman, the prevailing major crisis includes
the lack of investors’ confidence coupled with ny or almost
zeros investment by the banks. The CSE chairman has put light on
ensuring corporate good governance inside management as well
as inside the board of directors to ensure pro-ac ve regulatory
compliance and enforcement for the sake of transparency and
accountability in a demutualised stock exchange. He said the
securi es regulator and both the bourses should work closely
with ministry of commerce and ministry of finance as well to
offload government shares in stock market.
NATIONAL NEWS CAPITAL MARKETS
NET FOREIGN
INVESTMENT
In crores of taka
572.09
278.37
121.04
Jan Feb Mar Apr
96.96

Dhaka Bank reelects chairman
Abdul Hai Sarker has been re-elected
as chairman of Dhaka Bank Limited. Mr.
Sarker accomplished his Post Gradua on
Degree (M Com) from the University
of Dhaka in 1970. Mr. Sarker is the
former president of Bangladesh Tex le
Mills Associa on (BTMA), former vice
chairman of Bangladesh Associa on of
Banks (BAB) and a former director of
Federa on of Bangladesh Chamber of Commerce and Industries
(FBCCI). He is the Founder Trustee of Independent University.
UCB reelects chairman
MA Hashem has recently been reelected
as the chairman of United Commercial
Bank. He is also the chairman of Partex
Group, founder life member of NSU Trust
and member of NSU Board of Trustees,
member of IBAIS university trustee board
and former member of the parliament.
He is also an advisor of Janata Insurance
Company Ltd and the founder of MA
Hashem Degree College, kazirhat, Noakhali.
New chairman of Jamuna Bank
The Board of Directors of Jamuna Bank
Limited in its 241st
mee ng unanimously
elected Shaheen Mahmud as the
Chairman of the Board. Mr. Shaheen
has set up a number of RMG, telecom
and real estate business with related
manufacturing units including backward
linkages, under the umbrella of Co on
Group of which he is the chairman. Mr.
Shaheen is a successful exporter in the RMG sector of Bangladesh
and earned confidence of global buyers and accolade from the
Government of Bangladesh.
New MD & CEO of NCC Bank
Golam Hafiz Ahmed has been
appointed as the Managing Director &
CEO of NCC Bank Limited. Prior to this
appointment, he was the Addi onal
Managing Director and Ac ng
Managing Director & CEO of the same
Bank. Mr. Ahmed obtained his Masters
and BSS (Hons) in Economics from the
Department of Economics, University
of Dhaka. He started his banking career as a Senior Officer with
Pubali Bank Ltd. in 1983 through Banker’s Recruitment Commi ee
(BRC), Bangladesh Bank. Mr. Ahmed has more than 31 years of
banking experience.
Na onal Bank gets independent director
The Board of Directors of Na onal Bank Limited has appointed
Md. Mahbubur Rahman Khan as an Independent Director. He was
the Director of the same Bank for the period from September
2003 to October 2005. Mahbubur Rahman Khan has been
engaged in Real Estate, Export-Import, Contractory business for
last 30 years. At present he is the Managing Director of Himalay
Trading Co. Ltd. and Hotel Raffels Inn. Mr. Rahman was the
Chairman of the Faridpur Chamber of
Commerce and at present he is a Director
of Faridpur Chamber of Commerce.
He was the President of Red Crescent
Society, Faridpur Unit. He is a member
of FBCCI and Regional Chairman of Lions
Club. Md. Mahbubur Rahman has also
been engaged in different social-cultural
ac vi es. He is a freedom fighter.
New DMD of Modhumo Bank
Md. Touhidul Alam Khan has joined
Modhumo Bank Limited as Deputy
Managing Director. Prior to his new
assignment, he was the Senior Execu ve
Vice President and Head of Corporate
Banking of Bank Asia Limited. Touhidul
Alam Khan started his banking career as
Senior Officer with Agrani Bank Limited
in September 1993. In Agrani Bank,
he achieved “Superior Achievement
Cer ficate” for producing a superior level of achievement during
working in Financial Sector Reform Project (FSRP). He completed
hisMastersinFinancefromUniversityofDhaka.HeistheAssociate
Member of Ins tute of Cost & Management Accountants of
Bangladesh (ICMAB) and Associate Fellow Member of Ins tute of
Islamic Banking and Insurance (IIBI), United Kingdom. Mr. Khan
is a mul faceted management professional with 21 years of
diversified experience in banking.
New DMD of Mercan le Bank
Ma ul Hasan has recently joined the
Mercan le Bank Limited as Deputy
Managing Director (DMD). Mr. Hasan
started his career with IFIC Bank Limited
in 1984 as proba onary officer. He
was entrusted with many important
assignments including manager of
Principal Branch at Mo jheel. He also
held the posi on of manager, Foreign
Trade Division of IFIC overseas branch
at Karachi and chief manager at Lahore Branch in Pakistan. Ma
ul Hasan was the DMD of Nepal Bangladesh Bank Limited, a
joint venture of IFIC Bank Limited in Nepal. Prior to joining the
Mercan le Bank Limited, he was the DMD of IFIC Bank Limited.
He a ended many seminars, workshops, training courses on
banking and finance at home and abroad. He completed Diploma
in Banking from ‘The Ins tute of Bankers’, Bangladesh and
Associates of the Ins tute of Bankers in Pakistan.
ICAB gets new secretary
AKM Rahmat Ullah has joined the
Ins tute of Chartered Accountants of
Bangladesh (ICAB) as its secretary. Prior
to the new appointment, he has been
working as general manager for accounts
and budge ng in Bangladesh Bank. He
also served as financial management
specialist (consultant) in the IDA
Project, as a general manager of Social
Development Founda on under the
finance ministry and as a deputy director for audit in Bangladesh
Open University. A fellow member of ICAB, he completed his
masters in accoun ng from Dhaka University in 1981.
NATIONAL NEWS INDUSTRY APPOINTMENTS

AT&T, DirecTV announce USD 49 billion merger
AT&T announced recently
that it was acquiring DirecTV
in a USD 49 billion deal that
would create a new telecom
and television behemoth
to rival cable firms — while
raising fresh concerns about
compe on and op ons for
consumers. AT&T would gain
DirecTV’s 20 million U.S. subscribers, a company with strong cash
flows and an ability to fa en its bundle of offerings. The combined
firm would be able to offer phone, high-speed Internet and pay-
TV subscrip ons to more customers — packages that cable firms
such as Comcast have sold most successfully. AT&T has agreed to
acquire DirecTV for USD 95 a share, made up of USD 28.50 a share
in cash and USD 66.50 a share in AT&T stock. AT&T says it expects
to close the acquisi on within 12 months. The deal is the latest
mega-merger to be announced this year (2014) in a drama cally
shi ing telecommunica ons industry. The tans of the industry
have recently rushed to bulk up — in overall size and in diversity
of service offerings — as their legacy phone and TV businesses
have frayed and consumers have turned to the Internet for
communica on and entertainment.
Unemployment rates below 6% in 25 U.S. states
Unemployment rates fell
in nearly all U.S. states in
April 2014, and half the
states now have rates below
6%. The figures are a sign
of widespread, if slow,
improvement in the na on’s
job market. Unemployment
rates fell in 43 states in April,
the Labor Department, rose in two states and were unchanged
in five. Hiring is picking up as well. Employers added jobs in 39
states, while 10 states posted job losses. Twenty-five states now
have unemployment rates of 5.9% or lower. The Federal Reserve
considers “full employment” to be between 5.2% and 5.6%. Rates
at that level are considered “full employment” because if they
fell lower, infla on could rise. The na onal rate fell to 3.9% in
late 2000 without causing a spike in prices. Some larger states
see improvement. Texas’ unemployment rate fell to 5.2% in April
from 5.5 % in March. The unemployment rate in Pennsylvania, the
na on’s sixth-largest state by popula on, declined to 5.7% from
6% as the state gained nearly 11,000 jobs. Ohio, the seventh-
largest, saw a similar improvement. Its rate fell to 5.7% from 6.1%,
with employers crea ng 12,600 new jobs.
Fisker billionaire owner vows U.S. drive to take on Tesla: Cars
The Chinese billionaire who
bought Fisker Automo ve
HoldingsInc.atabankruptcy
auc on is planning to build
a new slate of electric-drive
cars in the U.S., challenging
Tesla Motors Inc. on its home turf. Lu Guanqiu, the chairman and
founder of China’s Wanxiang Group Corp., plans to manufacture
electric cars in the U.S. and ul mately in China. Lu’s plan pits him
against the likes of Elon Musk, the chief execu ve officer of Tesla,
which has quickly added workers to churn out its USD 72,000
Model S. Each mogul aspires to move his company beyond the
U.S. to sell lower-emission cars in China -- the world’s largest auto
market, with some of the worst air pollu on.
Britain’s economy returning to normal
The Bank of England
dampened expecta ons
that interest rates in the U.K.
will be raised imminently
as Governor Mark Carney
said the country’s economy
has only begun heading
back to normal. The Bri sh
economy is s ll smaller than it was in 2008 following a deep
recession brought on by the global financial crisis. According
to Carney, as me has moved on and the recovery has been
sustained, the economy has edged closer to the point at which
bank rate will need gradually to rise. The exact ming will
inevitably be the subject of considerable specula on and interest.
Even when that’s achieved, Carney said borrowing rates will most
likely rise only gradually. The bank’s benchmark interest rate
stands at a record low level of 0.5%. It has stayed there for over
five years. Carney resorted to a spor ng analogy to explain his
logic, comparing the Bri sh economy to the interna onal soccer
championship —the World Cup.
Investment Banks’ fixed-income revenue drops 16%
The 10 largest investment
banks including Barclays
Plc, Goldman Sachs Group
Inc. and Deutsche Bank
AG saw a 16% fall in fixed-
income, currencies and commodi es revenue in the first quarter,
according to analy cs firm Coali on. FICC revenue declined to
USD 22 billion in the quarter from a year earlier, London-based
Coali on. Equi es revenue sank 3% to USD 11.2 billion, while
investment banking, including advisory, rose 4 percent to USD
9.7 billion. According to Coali on, tougher regulatory capital
requirements and subdued client ac vity were the driving
factors for weakness in FICC. This more than offset modest
improvements in investment-banking divisions and resulted in an
overall decline of revenue. Barclays, U.K.’s second-largest bank,
said this month (April 2014) that income from FICC, tradi onally
the largest source of revenue for its investment bank, fell 41% to
1.2 billion pounds (USD 2 billion) in the first quarter. Clients of
securi es firms are trading less as the U.S. Federal Reserve slows
its monthly asset purchases and leaves bond investors preparing
for rising interest rates.
Faster economic reforms needed: China
According to the country’s top
economic planning agency,
China will try to quicken the
pace of economic reform this
year (2014) as part of the
government’s efforts to arrest
a slowdown in the world’s
second-largest economy. The
Na onal Development and
Reform Commission (NDRC) reaffirmed nine reform priori es
for 2014, including deepening reforms in the power and the oil
and gas industries and cu ng red tape for investment approvals,
according to a statement on its website (www.ndrc.gov.cn). China
adopted last November (2013) a reform blueprint for the rest of
the decade. So far Beijing has chosen a steady and gradual way
to carry out the plan. The regulator said China will push forward
price reforms for resource products and speed up urbaniza on-
related reforms to allow more people to live in ci es. It reiterated
it would speed up efforts on liberaliza on of interest rates and
exchange rates and quicken reforms on property taxes and
consump on taxes.
INTERNATIONAL NEWS BUSINESS AND ECONOMY

Wells Fargo sets up in Aberdeen as part of UK expansion
Wells Fargo, the world’s biggest bank by market value, recently
opened an office in Aberdeen to tap into oil industry business on
Scotland’s east coast as part of its UK expansion. San Francisco-
based Wells Fargo said the office has three people and is the
latest step in a steady expansion in Europe, Middle East and Africa
(EMEA), where it now has 930 people, up from about 600 at the
start of 2012. Aberdeen has been one of the most buoyant areas
in banking in the past two years, built on business with oil, gas
and energy services firms based in the city. Wells’ office is led
by Kendal Milne, a former Barclays (BARC.L) and DNB (DNB.OL)
oil and gas banker. Wells Fargo is regarded as one of the winners
from the financial crisis and last month reported record quarterly
earnings and its highest ever share price. Its European expansion
is mainly targe ng wholesale services for U.S. medium and large
companies, and catering to European firms ac ve in the United
States. Most of the expansion is in areas where it is strong in the
United States, such as the energy industry and commercial real
estate.
HSBC reveals sliding profits
Bank giant HSBC said
that its net profit slid
18% in the first quarter
as lower revenues
offset cost-cu ng, but
added that bad debt charges fell. Profit a er tax stood at USD
5.069 billion (3.64 billion euros) in the three months to the end of
March 2014, compared with USD 6.211 billion in the first quarter
of 2013. Revenue dropped 8.0% to USD 15.71 billion, while pre-
tax profit was down 20% at USD 6.785 billion. The Asia-focused
lender is pushing on with its savings program, having announced
last year (2013) plans to cut costs by a further USD 2.0 billion to
USD 3.0 billion between 2014 and 2016.
BlackBerry’s partnership with Foxconn signals shi ing priori es
BlackBerry, like most
phone makers, has
long contracted out the
manufacturing of its
phones, but the Z3 has
also been designed and
distributed by Foxconn
Technology Group, the
Taiwanese manufacturer.
BlackBerry’s partnership with Foxconn, a company perhaps best
known as a builder of iPhones and iPads, comes at a cri cal me
for BlackBerry. Although sales of the company’s devices have
plummeted globally in recent years, the revenue from the phone
business remains vital as John S. Chen, BlackBerry’s chairman and
chief execu ve, tries to shi the organiza on’s focus to services
and so ware.
Deutsche Bank Plans to Raise USD 11 Billion in Fresh Capital
Deutsche Bank, the
largest German bank,
recently said that it
would raise roughly
USD 11 billion in new
capital from exis ng
shareholders and the
royal family of Qatar,
responding to regulatory pressure on banks to reduce risk.
Deutsche Bank said it had sold new shares worth 1.75 billion
euros, or USD 2.4 billion, to Paramount Holdings Services Ltd.,
an investment vehicle owned by Sheikh Hamad bin Jassim bin
Jabr Al-Thani of Qatar. The remaining 6.3 billion euro is to raised
from exis ng shareholders in a rights issue likely to begin on June
24, 2014. The measures will help answer persistent cri cism
that Deutsche Bank, which has the biggest investment banking
opera on among European banks, presents a risk to the financial
system because it does not have enough capital to absorb
poten al losses.
Japan posts strong growth ahead of sales tax rise
Japan’s economy grew at
the fastest pace in nearly
three years in the first
quarter due to increased
spending ahead of a
sales tax increase on
April 1, 2014. Official
data showed GDP rose
1.5% in the January-to-March period, against a revised 0.1% in the
prior quarter. The figure beat forecasts for 1% growth, and was
led by consumer spending which rose by 2.1%. Capital spending
by businesses also outperformed, rising by 4.9%, which was more
than double analyst expecta ons. Private consump on accounts
for about 60% of Japan’s economy. However, economists warned
that spending may taper off now that the April tax hike has been
introduced. Japanese Prime Minister Shinzo Abe has been trying
to revive growth in the world’s third-largest economy. His policy
of “Abenomics” has helped Japan’s economy grow faster, but
Alibaba files for IPO, could raise as much as USD 20 billion
Alibaba files for IPO, could raise as much as USD 20 billion
The Chinese e-commerce
giant Alibaba filed to sell
stock to the public recently,
the first step in what many
expect to be one of the
largest IPOs in U.S. history.
Alibaba said it would raise
USD 1 billion, but analysts
expect the company’s haul to be much bigger, poten ally USD
20 billion. That would surpass Facebook’s 2012 IPO, which
raised USD 16 billion and ranks as the largest tech IPO in history.
Alibaba’s long-awaited Securi es and Exchange Commission filing
gave a rare view into the massive firm, which is largely unknown
in the United States. It sells everything from designer dresses
to farm machinery, processes billions in mobile payments and
runs its own cloud compu ng pla orm. The retailer’s size makes
it a poten al compe tor to Amazon, eBay and other online
companies. It reported revenue of USD 5.6 billion in the year
that ended in March and earned a profit of USD 1.4 billion during
that period. Alibaba has 231 million ac ve users in China and 8
million ac ve sellers, who spent a combined USD 248 billion last
year (2013).

Honda cuts motorcycle outlook for India
Honda Motor Co., the world’s biggest
maker of motorcycles, lowered its
forecast for India’s two-wheeler
market as economic growth in the
region cools. According to opera ng
officer in charge of motorcycle
opera ons, Industry deliveries will
probably expand to 20 to 25 million
units by 2020 in India, fewer than Honda’s earlier forecast of 30
million. Motorcycles accounted for more than 20% of the Tokyo-
based company’s opera ng profit last fiscal year. Two-wheelers
were the only vehicle segment in the country that expanded
in the year ended in March, with deliveries rising 7.3% to 14.8
million units, falling short of Honda’s expecta on. Honda sales in
India rose 37% to 3.6 million units last fiscal year, making it the
second-largest two-wheeler maker in the country, a er former
partner Hero MotoCorp Ltd. Its market share rose to 26% in the
January-March quarter, compared with 12% in 2009.
E-commerce edge helps Bri sh retailers expand abroad
Marks & Spencer Plc is making
a new push to expand abroad,
hoping e-commerce will give
Britain’s biggest clothing
retailer a be er chance to
succeed than earlier a empts
to enter new markets. It is
one of several retailers that
are using exper se developed
in the UK’s fast-growing
e-commerce market to
expand overseas. Store chains like M&S are star ng to emulate
the success of online-only fashion players like ASOS. Britain is
the world’s most developed online retail market, according to a
ranking by commercial real estate firm Cushman & Wakefield,
followed by the United States, Germany and France. M&S
withdrew from mainland Europe in 2001 a er a failed expansion.
The retreat was temporary. In March the firm said it would use
“bricks and clicks” - opening new stores in a few markets while
offering online sales in several more - to accelerate growth
abroad. Although the United States is the biggest e-commerce
market by absolute turnover, internet orders make up a bigger
por on of total retail sales in Britain - about 11% in 2013 to 7.3%
in the United States.
Japan’s trade deficit narrows on slower imports
Japan’s trade deficit narrowed in April a er the yen strengthened
and a sales tax hike dampened demand for imports of consumer
goods despite s ll modest growth in exports. Costs for imports of
oil and gas that account for about a third of the country’s imports
moderated, reflec ng a rise in the yen a er a year of decline and
decreases in shipments of some fuels. The 808.9 billion yen (USD
8 billion) deficit in April 2014, according to preliminary figures
released recently by the Ministry of Finance, compared with a
gap of 877.4 billion yen a year earlier and with a 1.7 trillion yen
deficit in March. Japan’s exports are improving as the economy
emerges from a protracted slump and recoveries gain momentum
overseas, but Japanese manufacturers have shi ed a large share
of their produc on offshore to cut costs, avoid trade barriers and
be closer to fast growing emerging markets.
Credit Suisse deal seen as paving way for Swiss Banks to se le
Credit Suisse Group AG’s
USD 2.6 billion in penal es
for helping Americans dodge
taxes clears the way for other
Swiss banks to resolve their
own quarrels with the U.S.,
ending years of deadlock
and uncertainty. Credit
Suisse’s main bank subsidiary agreed to the record penalty for an
offshore tax case and on May 19 became the first global bank in a
decade to admit to a crime in a U.S. courtroom. The Department
of Jus ce reached the deal a er years inves ga ng more than a
dozen Swiss firms, including Julius Baer Group Ltd. The lender,
Switzerland’s second-biggest, kept its New York State license and
doesn’t have to disclose informa on about U.S. clients in a way
that might contravene Swiss financial secrecy laws. The U.S. has
used treaty requests to iden fy only 238 Credit Suisse clients
out of 22,000 accounts held by Americans, according to a Senate
subcommi ee’s report in February.
RSA to sell Canada broker to Gallagher in USD 460 million deal
RSA Insurance Group Plc
agreed to sell a Canadian
brokerage to investors led
by Arthur J. Gallagher & Co.
for CUSD 500 million (USD
460 million) as the company
narrows its focus a er an
accoun ng scandal. Gallagher, the U.S. insurance brokerage that
has been striking deals to expand in Australia and the U.K., will
pay USD 400 million for an 87% stake in RSA’s Noraxis Capital
Corp., the Itasca, Illinois-based broker said in a presenta on on
its website recently. Noraxis management will own the remaining
13%. RSA Chief Execu ve Officer Stephen Hester, the former CEO
of Royal Bank of Scotland Group Plc, has been seeking to sell
assets and bolster capital at London-based RSA since taking over
in February. He struck a deal in April to sell units to Poland’s PZU
SA for about USD 498 million. The Canada sale is expected to add
about 225 million pounds (USD 378 million) to net tangible assets
and be completed within two months.
Lenovo profit rises 25% as PCs, smartphones boost market share
Lenovo Group Ltd., the
world’s largest maker of
personal computers, reported
a 25% jump in fourth-quarter
profit as its desktop models
and mobile devices gained
global market share. Net
income climbed to USD
158.3 million in the three months ended March from USD 126.9
million a year earlier. That compared with the USD 163.6 million
average of nine analysts’ es mates compiled by Bloomberg.

Chief Execu ve Officer Yang Yuanqing has maintained Lenovo’s
leadership in the PC market at a me when industry wide
shipments have contracted, and he also is expanding sales of
smartphones overseas. Lenovo, which in January agreed to buy
Motorola Mobility for USD 2.9 billion, plans to triple the number
of countries where it sells phones by adding 20 new markets in
the Middle East, Africa and La n America. Lenovo’s sales climbed
to USD 9.4 billion from USD 7.83 billion a year earlier.
Google is said to have held acquisi on talks with twitch
Google Inc. has held talks to
purchase video service Twitch
Interac ve Inc. to boost its
YouTube site, according to a
person with knowledge of the
ma er. With Twitch, Google
would gain a pla orm that has
more than 45 million ac ve
viewers a month. The San
Francisco-based company acts as a social gathering place for
video gamers, le ng them discuss games or watch other players.
Twitch is available on Sony Corp.’s PlaySta on 4 and Microso
Corp.’s Xbox One game consoles. Variety reported earlier recently
that the two companies are in talks on a transac on that could
value Twitch at about USD 1 billion. Google has been on an
acquisi on tear as it looks to bolster services and a ract more
users. The Web-search company acquired digital-thermostat
maker Nest Labs Inc. for USD 3.2 billion in February 2014.
Flipkart to buy Myntra in challenge to amazon in India
Flipkart, India’s largest online
retailer, will buy compe tor
Myntra.com to gain a business
with higher margins and boost
compe veness against Amazon.
com Inc. The deal values Myntra,
the country’s biggest online apparel store, at about USD 330
million and its shareholders will get a combina on of cash
payouts and stakes in Flipkart. Acquiring Myntra will give Flipkart,
founded in 2007 by former Amazon employees Sachin Bansal and
Binny Bansal, a larger share of the na on’s online retail market,
which CLSA Asia- Pacific Markets projects will jump more than
sevenfold to USD 22 billion by 2018. The combina on would add
customers and help challenge Amazon, which has expanded by
buying several rivals, including the USD 1.2 billion deal for online
shoe retailer Zappos.com in 2009.
Ne lix enters Germany, France in biggest push since 2011
Ne lix Inc. will introduce
its online video service this
year (2014) in Germany,
France and four other
European countries,
the company’s biggest
expansion in almost three
years. The world’s largest
Internet subscrip on
service, which produces the Emmy-winning poli cal drama
“House of Cards,” plans to enter Austria, Belgium, Luxembourg
and Switzerland as part of the move. The expansion into Western
Europe’s most-populous na ons is the most ambi ous by Chief
Execu ve Officer Reed Has ngs since late 2011, when Ne lix
began streaming films and TV shows across La n America and
the Caribbean. The company is racing to establish global online
dominance ahead of Amazon.com Inc.’s Prime Instant Video
service and Time Warner Inc.’s HBO. The company’s an cipated
move has already put pressure on established providers of on-
demand TV. Vivendi SA recently said it may seek partners for its
unprofitable Watchever service in Germany. Sky Deutschland
AG, the German pay-TV provider controlled by Rupert Murdoch,
began targe ng new customers with its Snap streaming service
in December.
Mall Built on Saudi sand spells Sukuk success: Islamic Finance
Dar Al Arkan’s third Islamic bond sale in a year is a rac ng buyers
as investors bet the Saudi Arabian company’s real estate assets
outweigh a junk credit ra ng at Standard & Poor’s. Dar Al Arkan
Real Estate Development Co. is poised to sell a benchmark U.S.
dollar-denominated sukuk due 2019. The yield on the company’s
May 2018 sukuk slid 109 basis points this year (2014) to 6.02%.
Rates on Middle East Islamic bonds fell 49 basis points in the
period to 4.15%, JPMorgan Chase & co. indexes show. Dar Al
Arkan, which mostly develops and then sells land so that others
can build on it, opened the largest mall in Riyadh in 2012 and
is benefi ng as the kingdom implements a 2011 plan to spend
USD 130 billion on social causes, including building homes amid
a shortage. The developer, rated four levels below investment
grade at S&P, owns more than USD 3.5 billion of property in Saudi
Arabia, the majority in Riyadh and Jeddah.
Russia signs China gas deal a er decade of nego a ons
Russia and China
reached a deal to supply
natural gas through a
new pipeline between
the two countries,
paving the way for
hundreds of billions
of dollars in fuel sales
over the next three
decades. Russia is
turning to China to
bolster its economy as
rela ons sour with the U.S. and European Union because of the
crisis in Ukraine. The accord, signed a er more than 10 years of
nego a ons, will allow Gazprom to develop giant gas fields in
the eastern Siberia too distant from exis ng markets in Europe.
Alexey Miller, chief execu ve officer of OAO Gazprom (OGZD),
Russia’s biggest company, signed the contract with Chinese
officials in Shanghai. The agreement, made during a two-day visit
to China by President Vladimir Pu n, is for 38 billion cubic meters
of gas annually over 30 years.

2015 Ford Mustang giveaway
To liven up the crowds filtering through the Blue Oval display, Ford
decided to spice things up a bit. The 2015 Mustang freebie is a
model kit that provides a hands-on approach to the latest model
‘Stang. The kit comes with a molded subframe featuring slots
to allow for the axle configura on, a molded dash and steering
column and a shiny, red body. Luckily, no glue is required, so
with a few easy snaps, the car comes together in minutes. This
is a flashback to dealership promo onal models given to enchant
poten al buyers from as far back as the 50s and the Chevy Bel Air
era. And many of these models are highly collectable.
Toyota remains the most valuable car brand worldwide
Toyota is the world’s most valuable car brand once again, while Ford
and General Motors’ Chevrolet brand are making strides as U.S.
consumer confidence builds, according to research released recently
by marke ng consultant Millward Brown Op mor, a unit of Kantar,
adver sing agency WPP’s data investment management unit. Ford
had the largest up ck in brand value with a 56% gain -- enough to
move it into the Top 5. Chevrolet rejoined the list for the first me
since 2009. The Toyota brand is valued at USD 29.6 billion, a 21%
boost from 2013. The brand has finished in the top spot among auto
brands in seven of nine years the study has been undertaken.

IMF Commodity Market Review
Commodity prices rose 1.0% in
April, with gains in all main groups
due, in part, to deprecia on of
the dollar—down 0.4% against a
broad group of countries. A few
commodi es face growing supply
constraints, such as nickel following
Indonesia’s ore export ban, while
a few agriculture commodi es
have been affected by weather and
disease. Record global produc on of corn, rice and oilseeds are
projected for crop year 2014/15. Crude oil prices rose by 0.9% in
April, averaging USD 104.9/bbl, on rising tensions between Russia
and western countries over the conflict in Ukraine, and con nued
global produc on outages. Deteriora on in Ukraine raises the
possibility of further sanc ons, and Russia has stated it will only
supply gas to Ukraine that is pre-paid beginning in June.
Exports from Libya
have been slow
to re-emerge, but
reopening of two
ports could see
exports of around
0.2 mb/d in the
near term. Refinery
maintenance in the
Atlan c basin, that
was expected to wind down in April, has been extended into May
with further announced turnarounds (and maintenance is now
underway in Asia). OPEC produc on reportedly rose in April with
a rebound in Algeria, Iraq and Saudi Arabia. OPEC next meets
June 11th
to discuss its 30 mb/d produc on target. The Brent-WTI
spread widened to USD 6/bbl, and to nearly USD 10/bbl in early
May, due to a con nued buildup in U.S. crude oil inventories.
Stocks in the mid-con nent have plunged in recent weeks
facilitated by new pipeline capacity from Cushing OK to the Gulf
coast. However, the surplus has now shi ed to the Gulf where
stocks are at record highs. Rising light crude oil produc on from
U.S. shale deposits has reduced light crude imports. However,
imports of La n American heavy oil—which Gulf coast refineries
are typically designed to process—are also declining somewhat
and being redirected to other markets in Europe and Asia.
Natural gas prices
in the U.S. fell by
4.1% in March on
modera ng seasonal
demand. The storage
injec on season—
which commenced
in early April—began
at a faster pace than
last year, partly due to mild weather. However, larger injec ons
are required to replace depleted inventories before winter, and
may require higher prices. The pace of summer cooling demand
will be a key factor. Agriculture prices rose by 0.9% in April, with
large gains concentrated in a few commodi es. Orange prices
leapt 8% on reduced produc on es mates in Brazil because of
drought and in the U.S. from bacterial disease. Swine prices rose
6%, up a third straight month, as a contagious disease has wiped
out 10% of the U.S. swine popula on since last summer. Shrimp
prices increased 5% as a disease in Asia is reducing supplies of
farm-raised shrimp. Soybean and soybean meal prices were up 5
due to strong demand, but prices eased in early May as a record
South American crop entered the market. Arabica coffee prices
rose 5% (and are up 85% the past 5 months) due to concerns
about the size of Brazil’s crop because of drought. Partly offse ng
these gains was a 6% drop in tea prices on rela vely weak demand
at auc ons in Kenya, the world’s largest black tea exporter.
Rice prices fell
5%, down a
second month,
as the Thailand
g o v e r n m e n t
con nued to sell
from its stocks to
help finance delayed
payments under
its Crop Rice Paddy
Pledging Program. Palm oil prices declined 4% on rising produc on
and stocks in Malaysia. Rubber prices fell 4% as global produc on
is expected to record a surplus for the fourth straight year.
Thailand is taking steps to reduce output but growth con nues
in other south-east Asian countries. Metals prices rose by 2.7%
in April, up for the first me this year, with gains in all metals
except uranium. The largest increase was for nickel—jumping
by 11% and up for the sixth consecu ve month—mainly due to
Indonesia’s January 12th export ban on unprocessed ore. The
nickel market is expected to gradually shi from a large surplus
into deficit, especially in 2015, and record LME inventories have
recently started to decline.
China, which
imported most of
Indonesia’s ore to
process nickel pig
iron, had stocked up
with several month’s
supply to help
cushion the loss, but
smaller producers
are already repor ng shortages and larger producers are cu ng
output. Aluminum prices rose 6% following a court ruling against
the London Metal Exchange (LME) to cut its warehouse queues,
as well as con nued produc on cuts outside of China. However,
prices fell back in early May on rising stocks and con nued growth
in produc on in China.
Iron ore prices rose
2% on expected higher
demand in China, but
prices in early May fell
to the lowest levels in 20
months due to con nued
growth in produc on
from Australia, and
higher stocks at Chinese
ports. Partly offse ng
these increases was a 6%
drop in uranium prices, to the lowest level in almost nine years,
due to excess global supply and delay restar ng Japan’s nuclear
power plants.
INTERNATIONAL NEWS COMMODITY MARKET
IMF Commodity Price Indices
(2005=100)
220
200
180
160
Jan-11 Jan-12 Jan-13
Non-Energy
Energy
Total
Jan-14
Crude Oil Prices
($/barrel)
130
120
110
100
90
80
Jan-11 Jan-12 Jan-13 Jan-14
Brent
WTI
Dubai
Food and Beverage Price Indices
(2005=100)
275
250
225
200
175
150
125
100
Meat
Seafood
Beverages
Cereals
Vegetable
Oils & Meal
IMF Commodity Price Indices
(2005=100)
Metals
Energy
Agriculture
275
250
225
200
175
150
125

OECD Economic Outlook 2014
A nascent recovery and s ll
large es mated slack call for
accommoda ve macroeconomic
policy, but with increasingly
differen ated policy stances in
the main OECD (Organisa on
for Economic Co-opera on and
Development) areas. Government
debt remains high in many
countries and is merely expected
to stabilise in the OECD over next 18 months (Table 1), limi ng
the extent to which fiscal policy can be used to support the
economy. In the context of s ll large es mated output gaps,
high unemployment and below-target infla on, this implies that
accommoda ve monetary policy should be maintained. However,
with the recovery more advanced in the United States and the
United Kingdom, monetary s mulus should be reduced gradually,
in contrast to Japan, where addi onal easing is already planned,
and the euro area, where addi onal accommoda on is needed.
In China, monetary policy will have to be eased if growth were to
slow sharply. Pruden al measures should also be used in a mely
manner to gradually slow rapid credit expansion and harder
budget constraints should be imposed on local governments.
In the projec on period, policy rates are likely to remain low
by historical standards and simple policy benchmark rules. This
poses some risks to price and financial stability in the future.
Nevertheless, cau on is needed in withdrawing monetary
s mulus, as policy rates are s ll at or close to the zero lower
bound. Notwithstanding the progress achieved in improving the
state of public finances, addi onal sustained consolida on will be
needed in several countries in the coming years, calling for some
offset from monetary policy. Uncertainty about the postcrisis
level of neutral interest rates and the possibility that they might
be lower than they used to be prior to the crisis provide another
argument for keeping policy rates low. Updated OECD es mates
of neutral interest rates (Bouis et al., 2013) indicate that they
remained nega ve in real terms in 2013. Although these es mates
are inherently uncertain, they suggest that policy interest rates at
zero output gaps and on-target infla on could remain lower for
longer than in the past.
United States
Accommoda ve monetary policy remains warranted but should
be scaled down gradually. Policy accommoda on is required as
current economic slack remains large (with the nega ve output
gap es mated at 3½% of GDP in 2013), infla on is low and
infla on expecta ons are well anchored. However, a reduc on
in monetary policy s mulus will be needed given the projected
narrowing of output and unemployment gaps and the projected
increase of infla on towards its target. There are risks that
prolonged strong monetary accommoda on could unanchor
infla on expecta ons and generate asset price bubbles once
again. The path set by the Federal Reserve for reducing monthly
purchases of securi es from the USD 55 billion in April to zero
later this year seems appropriate and it would allow policy rates
to start rising in 2015 as currently envisaged by FOMC members
and expected by markets.
United Kingdom
Withtheunemploymentratefallingclosetoitsthresholdlevel,the
Bank of England provided further guidance in February, which –
as in the United States – was jus fied in view of the changing aims
of guidance as the start of monetary policy normalisa on draws
closer. The recent decline in infla on and infla on expecta ons,
the lack of immediate infla onary pressures, especially in the
context of sizeable es mated slack (even if it is narrowing
faster than expected) and weak wage growth, and s ll nascent
recovery suggest that current s mulus could be maintained in
2014. However, from next year (2015), the policy rate should be
increased gradually, as currently expected by markets, to ensure
price and financial stability. By the end of 2015, the employment
and output gaps are projected to be largely closed and infla on
will be close to the target, while policy rates are likely to be
significantly below neutral levels, even if the la er could be lower
than prior to the crisis.
Japan
The authori es are pushing ahead with their three-arrow policy
package: very expansionary monetary policy to end defla on and
a ain a 2% infla on target; flexible fiscal policy to give temporary
support to the economy; and structural reforms to boost the
poten al growth of the economy. So far, progress has been most
evident in the monetary and fiscal domains, but much remains to
be done to rapidly improve structural policy se ngs.
Euro area
Very low underlying infla on and large economic slack are
expected to persist for several quarters. Accordingly, the main
refinancing policy rate should be reduced to zero, and possibly
the deposit rate to a slightly nega ve level, and they should be
maintained at these levels at least un l end-2015. Together with
recent improvements in financial markets, this should contribute
to reduce interbank overnight interest rates and ul mately
bank lending rates, helping to s mulate growth and reverse
disinfla onary pressures. Addi onal non-conven onal measures
would be required if infla on did not show clear signs of returning
toward the European Central Bank (ECB) target or, a for ori, if a
defla onary scenario threatened to occur.
INTERNATIONAL NEWS ECONOMIC OUTLOOK
Table 1 Fiscal positions will
continue to improve
Per cent of GDP / Potential GDP
1. Excludes Chile and Mexico.
2. Excludes Chile, Mexico and Turkey.
Source : OECD Economic Outlook 95 Data base.
2011 2012 2013 2014 2015
United States
Actual balance -10.7 -9.3 -6.4 -5.8 -4.6
Underlying balance -8.7 -7.8 -5.2 -4.9 -4.1
Underlying primary balance -5.7 -4.8 -3.0 -2.4 -1.7
Gross financial liabilities 98.8 102.1 104.3 106.2 106.5
Euro area
Actual balance -4.1 -3.7 -3.0 -2.5 -1.8
Underlying primary balance -1.0 0.3 0.9 1.4 1.8
Japan
Actual balance -8.8 -8.7 -9.3 -8.4 - 6.7
Underlying primary balance -7.2 -7.2 -7.9 -7.1 -5.4
OECED1
Actual balance1 -6.5 -5.9 -4.6 3.9 -3.2
Underlying balance2 -5.9 -5.1 -3.9 -3.5 -2.8
Underlying primary balance2 -3.7 -2.9 -2.0 -1.5 -0.8
Gross financial liabilities2 102.1 107.1 109.5 111.1 111.2

MTBiz May-June 2014 Issue Highlights Mobile Economy Impact

MTBiz May-June 2014 Issue Highlights Mobile Economy Impact

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