ADP still in slow pace

Though the government took an ambitious development programme this
fiscal year, it could spend only 2 percent or Tk 482 crore of
allocation in the first month. The implementation rate was below the
expectation in consideration of a bigger annual development programme
(ADP). An ADP of Tk 30 ,500 crore was taken for the current fiscal
year. The ADP size was between Tk 25 ,000 crore and Tk 26 ,000
crore in the last three fiscal years and later in the revised budget
it was cut by Tk 3 , 000 crore-Tk 4 ,000 crore. But the government
failed to implement ADP to the tune of Tk 20 ,000 crore. Though 2
percent was implemented in the first month this year, the rate was
one percent in the same month of the last three fiscal years. However,
in the first month of the current fiscal year 7 percent or Tk 1205
crore has been released. Of the total expenditure, local component
implantation was one percent or Tk 232 crore and project aid
implementation was 2 percent or Tk 250 crore. Of the 48 ministries
and departments, 24 failed to spend a single taka in the first
month, said Implementation, Monitoring and Evaluation Division
(IMED). IMED officials said they have talked with the ministries in
this regard. They said the implementation pace usually remains slow
in the beginning of a fiscal year. The officials also said the IMED
has sent letters to the ministries with guidelines to accelerate the
pace. The prime minister regularly pushes the ministries and
departments to increase their ADP implementation. The finance
ministry has taken several initiatives to bring a momentum in ADP
implementation rate.

SEC to probe Navana CNG share trade

The Securities and Exchange Commission yesterday formed a probe
committee to investigate 'unusual' share trading of Navana CNG,
which received a bonanza from the market through offloading shares
directly within a record low time. The stock market regulator also
asked the committee to submit the probe report within October 8. The
two-member body, headed by SEC Executive Director ATM Tariquzzaman,
was formed after the market watchdog observed unusual trade of the
company's shares in the stock exchanges through designated brokers
into the first five trading days of listing. The other committee
member is SEC Director Mohammad Rezaul Karim. ICB Securities Trading
Company and Sharp Securities were the designated selling agents for
Navana CNG. "The commission formed the probe committee to find out
whether there were any irregularities or manipulation," said an SEC
high official. Navana CNG Ltd, a sister concern of Navana Group,
debuted on the stock exchanges on August 30 under direct listing
method and it offloaded a major portion at high prices in the first
five trading days. It sold half of its shares, or 1.81 crore ordinary
shares of Tk 10 each, within just seven trading days. On the first
day, the price of a Navana CNG share rose as high as Tk 270 before
closing at Tk 190.48. The average price of the shares was between Tk
200 and Tk 205 in the first five days. The CNG (compressed natural
gas) conversion and re-fuelling company received a bonanza of around
Tk 360 crore against Tk 18 crore shares. The hefty gains made by the
private company also prompted Dhaka Stock Exchange to decide against
allowing any other private company to join the bourses under direct
listing system. The DSE at a board meeting on Tuesday decided that no
companies except the government- owned ones will be listed directly on
the stock exchanges. Earlier, two other private sector companies --
Shinepukur Ceramics and ACI Formulations -- also made hefty business
by offloading shares under direct listing system. To protect such an
unusual flight of capital from the market, a special committee formed
by the SEC had recommended some amendments to the existing direct
listing rules. But neither the SEC nor the DSE took initiatives to
bring changes in the direct listing method based on the
recommendation. Besides the three private companies, five government
entities -- Desco, Power Grid, Jamuna Oil, Meghna Petroleum and Titas
Gas -- were listed directly on the bourses.

DSE won't allow private firms to list directly

Dhaka Stock Exchange (DSE) will not allow any private company to join
bourses under direct listing system. The DSE took the decision at a
meeting yesterday. No companies except the government-owned ones
will be listed directly on the stock exchanges, according to a DSE
press statement, which said the bourse took the decision for the
interest of the market. Meanwhile, Navana CNG Limited, a private
company, yesterday completed sale of half of its shares, or 1.81
crore ordinary shares of Tk 10 each, under direct listing. Navana CNG
received a bonanza of around Tk 360 crore against only Tk 18 crore
shares. However the DSE decision will have to be accepted and
permitted by the Securities and Exchange Commission (SEC). Market
analysts came down heavily on the DSE for taking such a move to bar
the private sector companies from direct listing. They said the
decision will hinder the supply of new issues to the market. "If any
company makes a huge business through the existing direct listing
method and if it seems that the rules are being abused, the rules
should be amended," said Yawer Sayeed, managing director of AIMS of
Bangladesh. "But, no company should be barred from direct listing,"
he said. A special committee formed earlier by the SEC had
recommended for some amendments to the existing direct listing rules.
"But neither the SEC nor the DSE took initiatives to bring changes in
the direct listing method based on the recommendation," said Sayeed,
who was a member of the committee. ICB Securities Trading Company and
Sharp Securities, the selling agents for Navana CNG, said the sister
concern of Navana Group received Tk 200 per share on an average.
Offloading of the CNG (compressed natural gas) conversion and
re-fuelling company's shares started on the two bourses on August 30
under direct listing method, an alternative way of enlisting
profitable companies that do not prefer IPO system. "We have
completed the sale of Navana CNG shares today [yesterday]," said
Mozammel Haque, director of Sharp Securities, which sold 1.21 crore
shares. "It's the record lowest time for completing sale of shares
under direct listing rules. No company was able to finish offloading
shares within just seven trading days," he said. The rest 60 lakh
shares were sold by ICB Securities Trading Company. "From our side,
we have completed the sale couple of days ago," said Kazi Sanaul Hoq,
chief executive officer of ICB Securities. On the first day, price of
Navana CNG shares rose as high as Tk 270 before closing at Tk 190.
48. However, the average prices of Navana shares were in between Tk
200 and Tk 205 in the last six days. The bonanza could encourage
other profitable companies to get listed with the stock exchanges,
market analysts said. They said the profitable companies that do not
prefer existing IPO (initial public offering) method should take the
direct listing facilities to go public. The entrepreneurs will get the
best value of their shares, as price of a security is determined by
prospective investors directly in the secondary market under the
direct listing method, the analysts said. Before Navana CNG, five
government entities -- Desco, Power Grid, Jamuna Oil, Meghna
Petroleum and Titas Gas -- and two private organisations --
Shinepukur Ceramics and ACI Formulations -- were listed directly.

Bangladesh moves down ranks despite reforms Says Doing Business 2010 report

Bangladesh fell four notches to the 119 th position in a survey of
183 nations, mainly because of slower reforms, said the Doing
Business 2010 report released globally yesterday. The slip came
despite three major reforms undertaken in the reported period (June
2008 to May 2009) , it said. "Despite successful reforms in the three
areas, the country slipped a few places in the global ranking. This
is because these reforms were not aggressive enough," said Syed
Akhtar Mahood, senior programme manager of Bangladesh Investment
Climate Fund, managed by International Finance Corporation (IFC), at
the launch of the report. The World Bank explains that Bangladesh has
reformed in three areas, but other countries have done more. This is
the seventh 'Doing Business' report published jointly by the WB and
IFC. The report helps both local and foreign businesses understand
business regulations in a country. Among South Asian nations, Pakistan
tops the list with the 85 th position, followed by the Maldives at
87 , Sri Lanka at 105 , Nepal at 123 , Bhutan at 126 , India at 133
and Afghanistan at 160. Of the 183 countries considered for this
year's report, a record 133 nations carried out over 200 reforms.
The report covers 10 indicators affecting businesses -- dealing with
construction permits, employing workers, registering property,
getting credit, protecting investors, paying taxes, trading across
borders, enforcing contracts and closing a business. Bangladesh has
been recognised as the most active reformer in South Asia,
implementing three reforms -- introduction of an online company
registration system, corporate income tax cuts and expedited
cross-border trade by automating customs clearance systems. The
report said Bangladesh has simplified business start-up by
implementing an online company registration system, reducing the time
required from 35 days to just a day. Bangladesh also reduced the
corporate income tax rate from 40 percent to 37.5 percent, while
increasing the capital gains tax rate from 5 percent to 15 percent.
The time required to acquire a bonded warehouse was reduced by three
months, while the time needed to register property dropped by nearly
200 days. Trade was expedited by an automation of customs clearance
at the Chittagong Port as it condensed the time required to clear
goods, the report mentioned. However, the report suggests Bangladesh
needs to adopt a more strategic and institutionalised approach to
regulatory reforms to keep up with an increasingly competitive global
environment where other countries are reforming fast. "To ensure the
country retains its competitive edge, Bangladesh needs to spread its
reforms across more regulatory areas," said Mahmood in a
videoconference from Nepal. He said the reforms need to be deeper and
implementation faster. "So it is vital for Bangladesh to strengthen
the Regulatory Reform Commission," he added. Of the other South Asian
nations, India improved its score on the 'closing a business'
indicator by taking steps to ease resolution of insolvency cases.
Nepal lowered property transfer costs. Pakistan eased business
start-up procedures by introducing an e-service registration system,
while Sri Lanka improved its access to finance indicator. For the
first time, a Sub-Saharan African economy, Rwanda, led the world in
'Doing Business' reforms in seven out of 10 indicators. The Arab
Republic of Egypt, Liberia, Moldova, the Kyrgyz Republic and
Tajikistan joined Rwanda on the list of global top reformers.
Singapore topped the list for the fourth consecutive time, followed
by New Zealand in the second and Hong Kong in the third position.

Fresh air blows in tourism of BANGLADESH

The government has moved to give a breath of fresh air to the ignored
tourism sector by forming a high-powered national body, headed by
the prime minister. The government issued a gazette on the formation
of the council on August 31. A similar body was formed in 1992 but
was not functional. The new 11- member council will approve all
national and regional plans for tourism development and
infrastructure development decisions and deal with tourism laws. For
the first time, the government is going to offer financial support to
private sector tourism entrepreneurs via the 'National Tourism
Council- 2009 '. The ministries of finance, home, local government,
land, civil aviation and tourism, foreign, environment and forest,
cultural affairs and CHT affairs have been included in the council.
According to the gazette, the related ministries will be compelled to
execute the decisions taken by the council. In addition to the
council, another high-profile committee headed by the finance
minister and the national advisory council for tourism have been
formed to coordinate development efforts in the sector. "These three
bodies will work simultaneously to coordinate and monitor development
that will be assigned by the different ministries," GM Quader, civil
aviation and tourism minister. These bodies will take prompt decisions
to gear the tourism sector, which has been ignored despite having
the potential to contribute greatly to the national economy, he said.
To facilitate private stakeholders, the minister said, "Duty
exemptions on the import of tourism equipment and lower bank rates for
tourism developers will be offered." The minister said private
stakeholders will be included in the national advisory council, to
receive feedback. Bangladesh's tourism sector is hanging by the
thread, despite having some of the most exclusive sites in the world.
Tourism in neighbouring India, Nepal and Bhutan is flourishing by the
day due to combined inactivates taken by both the private and public
sectors, and contributing significantly to their economies. According
to the 'Tourism 2020 Vision' forecast by the World Tourism
Organisation (WTO), international arrivals are expected to reach
over 1.56 billion by the year 2020 , of which, 1.2 billion will be
intra-regional and 0.4 billion will be long-haul travellers. The
total tourist arrivals by region shows that by 2020 , the top three
receiving regions will be Europe (717 million tourists), East Asia
and the Pacific (397 million) and the Americas (282 million),
followed by Africa, the Middle East and South Asia. East Asia and the
Pacific, South Asia, the Middle East and Africa are forecasted to
record growth at rates of over 5 percent a year, compared to the
world average of 4.1 percent. According to civil aviation and tourism
ministry statistics, a total of 4.67 lakh foreign tourists visited
Bangladesh by 2008- end, which was a sharp rise from 2.65 lakh in
2007 , two lakh in 2006 and 2.07 lakh in 2005. The government
earned Tk 612 crore from the tourism sector in 2008. However, the
sector has performed below its potential. Political uncertainty and
a lack of security at the tourist spots mainly hinder growth of the
sector. Experts have also expressed doubts over the effectiveness of
the changes that will follow formation of the new council. "I don't
see any new hope with forming the council," said Hasan Mansur,
tourism expert and managing director of The Guide Tours. He said such
a body was formed previously in 1992 , but they sat for a meeting
only once in 17 years, which naturally frustrated the initiative.
However, the new government has voiced plans to develop the tourism
sector as one of the major earners.