Stocks edged lower Monday as late profit taking selling pressure cut early sharp gains.

The benchmark DSE General Index (DGEN), the market’s main gauge, closed at 4548.89 with a slight fall of 16.82 points, chipping away gains of 134.21 points seen in the previous session. The broader All Shares Price Index (DSI) lost 8.78 points or 0.22 per cent to 3857. But the DSE-20 Index comprising blue chips shares gained 9.82 points or 0.27 per cent to 3528.86.

Chittagong Stock Exchange Selective Categories Index, CSCX, was down 38.92 points to 8853.36.
Losers took a marginal lead over the winners as out of 276 issues traded, 108 closed positive, 154 negative and 14 remained unchanged.

The market started with high note, gaining more than 64 points. However, as the session progressed, sell pressure wiped out the early hour gain. The market paused on the day as investors were concentrated to profit booking and cautious movement.

Most profit booking took place on general insurance and financial institutions that shed 2.43 per cent and 2.13 per cent respectively.

Cement sector was the major exception with a rise of 4.48 per cent.

The market was a bit slower than the previous session as investors were on selling mood rather than buying. 
Turnover in value stood at Tk 9.51 billion, down 16 per cent from Sunday’s Tk 11.36 billion-- the second highest single day turnover since April 15 this year.

The state owned Titas Gas continued to top the turnover chart for the sixth straight sessions with shares worth Tk 520.27 million changed hands. The other turnover leaders were United Airways, RN Spinning, Bangladesh Submarine Cable Company, MI Cement, Unique Hotel, Jamuna Oil and National Bank.

Grameen Scheme One was the day’s top gainer posting a rise of 9.88 per cent followed by First Prime Mutual Fund, Bangas, HR Textile, DBH First Mutual Fund, BSRM Steel and Saiham Cotton.

The day’s worst losers included Islamic Finance, National Polymer, Unique Hotel, Delta Spinning and Takaful Insurance.

News: The Daily Independent/Bangladesh/18-Sep-12

KS Tabrez, Managing Director of Dutch-Bangla Bank, seen with the cleft-lipped girls and boys at a plastic surgery camp of DBBL at South View Hospital at Mirpur Sunday.

News: The Daily Sun/Bangladesh/18-Sep-12

From left, Debapriya Bhattacharya, distinguished fellow of Centre for Policy Dialogue (CPD); Akbar Ali Khan, former caretaker government adviser; Mustafizur Rahman, executive director of CPD; AB Mirza Azizul Islam, former caretaker government adviser; Ahsan H Mansur, executive director of Policy Research Institute; and David Cowen, IMF mission chief, attend a dialogue organised by CPD on the economy and IMF-supported programmes, at BRAC Centre Inn in Dhaka yesterday.

The head of a visiting IMF team yesterday suggested greater authority for the central bank to govern all banks, both private and state-run, to ensure prudential management of the financial sector.

David Cowen, chief of the International Monetary Fund's team, said the amendment to the Banking Companies Act could be an important tool for strengthening the financial sector oversight.

"It's necessary for a well-managed supervisory and prudential framework," he said, urging the government to act on the issue.

He spoke at a dialogue on "State of the Bangladesh Economy, IMF Supported Programme and Future Outlook" at the BRAC Centre Inn auditorium in Dhaka.

The Centre for Policy Dialogue (CPD), a local think-tank, organised the programme.

The comments came as debates continue whether the banking regulator did enough to prevent the swindle of around Tk 3,606 crore from a Sonali Bank branch by Hall-Mark Group and five other companies.

According to the Banking Companies Act, the central bank has full control over private commercial banks and can act on its own if needed. But when it comes to state-run banks, Bangladesh Bank can only advise the government to take any action.

Without specifically mentioning the loan scam, Cowen said the government needs to see these banks as national assets.

There could be strains on the financial institutions and steps should be taken to mitigate risks, he said.

Cowen also urged the government to develop a bond market so that it works alongside bank credits and equity markets.

The IMF official said fuel price hikes are important for the country to contain subsidy costs and protect reserves, backstopped by greater exchange flexibility and possible monetary tightening.

He said the government should implement an automatic fuel price adjustment mechanism to avoid costly delays in oil price pass-through.

Still, the subsidies for energy could continue, he said. "There could be topping up and expansion of directed subsidy schemes such as diesel cards to mitigate impacts on the most vulnerable."

He said the government should look into the issue of fuel subsidies, as the budget is bleeding because of spending for the energy sector, cutting the country's expenditure for social welfare.

Cowen also said, apart from adjusting the prices of fuel and electricity, the government should look at the costs of energy.

"The government will have to see whether the cost is going up because of inefficiencies of BPC (Bangladesh Petroleum Corporation) and PDB (Power Development Board)," he said.

"Costs have to be controlled."

Cowen also joined the raging debates over quick rental power plants, which are blamed for putting a strain on balance of payments and higher electricity tariffs.

"We recognise the quick rental power plants are unnecessary. The government should revisit the issue because of higher costs of electricity generation."

Cowen also said private importers could be allowed to import oil as they can provide petroleum products at cheaper rates compared to the current framework.

At present, state-run BPC is the sole importer of all petroleum products.

During his keynote presentation, Cowen also spoke about four near-term risks Bangladesh will face: intensification of the euro area crisis, a sharp rise in global food prices, world oil price shock and pre-election pressures.

He said greater exchange rate flexibility could be one of the potential policy responses to deal with the impacts of euro crisis on Bangladesh.

Cowen said any sudden shock in the global food prices could deal a blow to Bangladesh's balance of payments. "Fiscal easing associated with measured food imports, open market sales and other safety net operations could be potential policy responses to the food price shock."

He also called for additional monetary tightening for addressing the second round effects of inflation, anchoring expectations, and offsetting the impacts of possible expansionary fiscal policy.

The IMF official also said a lack of fiscal restraint coupled with strained donor relations and tepid non-bank resource mobilisation could spur heavy government borrowing from banks, due to pre-election pressures.

"As a result, balance of payments and inflation pressures could re-emerge, undermining the recent macroeconomic stabilisation gains. Higher bank borrowing could add liquidity pressures at banks and crowd out private sector credit," he said.

Akbar Ali Khan, a former adviser to the caretaker government, said the government should look into inefficiencies in the electricity sector, which could cut cost of power generation.

He also said the problem in the country's financial sector, particularly at the state-run banks, is nothing new.

"We drew up the country's first public financial management in 1991, but we have not been able to solve the problem. It has remained as a trouble."

He said the scam at Sonali Bank should open the eyes of the government. "The government should immediately act on it, otherwise we will have serious problems."

AB Mirza Azizul Islam, another former adviser to the caretaker government, said the public finance management would not improve only by formulating good rules and procedures, as progress is intimately connected with the people who run them.

He also said the government does not have much time in implementing unpopular decisions such as raising the electricity prices.

Ahsan H Mansur, executive director of Policy Research Institute, said the Sonali Bank scam is the beginning of a long story.

He advised the government to conduct an independent and transparent audit into the state bank to assess the damage the politically appointed directors have caused to the bank's financial health.

The economist also called for disbanding the banking and financial institution division of the finance ministry, which has become a vehicle for establishing influences over the state banks.

In his presentation on the IMF-supported programmes, Debapriya Bhattacharya, distinguished fellow of CPD, said the IMF's external credit facility programme may have provided a helpful reference point when the government remains incapable of implementing its own programme.

"We were not able to impose fiscal discipline. The sad point is that we invited international financial institutions to impose discipline," Bhattacharya said.

He warned that Bangladesh's growth prospects would moderate along with a slowdown in investment. “One may expect a decline in GDP growth for a second consecutive year,” he said.

The economist also said the government is facing a “fast-closing window of reprieve”.

“It may have to settle for a second best option by holding on to macroeconomic stability with moderated economic growth, investment and employment,” he said.

Bhattacharya also said the recently exposed crisis in the banking sector indicates that the macroeconomic management and structural reform issues demand a greater politico-economic understanding of the current development challenges of Bangladesh.

Prof Mustafizur Rahman, executive director of the CPD, chaired the session. Amir Khasru Mahmud Chowdhury, a former commerce minister, and Osman Faruque, a former education minister, also spoke.

News: The Daily Star/Bangladesh/18-Sep-12

The central bank yesterday asked 32 Sonali Bank officials, including a former managing director, to submit their bank statements within 10 days.

The statements will be sent to the Anti-Corruption Commission for legal action if it is found that they have illegal incomes, a Bangladesh Bank officials said.

The names of these officials came up during separate investigations after the loan scam at the bank's Ruposhi Bangla branch was unearthed in May this year, he added.

They will have to submit statements of their savings, current, fixed or any other accounts and also statements of their loans.

Of the 32 officials, 17 have been suspended over their alleged involvement in the Tk 3,606-crore loan scam involving Hall-Mark Group and five other companies. Of the sum, Hall-Mark alone swindled Tk 2,686 crore.

Former managing director Humayun Kabir, deputy managing directors Atiqur Rahman and Mainul Haque (now officers on special duty) and general managers Nony Gopal Nath and Mir Mahidur Rahman are among the officials who will have to turn in their wealth statements.

These officials were blamed in a functional audit report prepared by Syful Shamsul Alam and Co, a chartered accountant and consultancy firm, for their roles in the swindling of public money from the Ruposhi Bangla branch in the name of loans against forged documents.

Meanwhile, ANM Mashrurul Huda Siraji, who was the general manager of the bank's head office when the scam was underway, said he was transferred outside Dhaka as soon as he moved to investigate the fraud.

"I sensed it in mid-January and formed a team to probe it. But the managing director [Humayun Kabir] transferred me just a day before the probe was to start," he told reporters yesterday.

He added he could serve only three months at the head office. He was first transferred to Comilla and then to Sylhet and then again to Rangpur by Kabir.

Siraji, now serving as general manager at the Rangpur branch of the bank, was interrogated by the ACC over the scam.

Five other Sonali Bank officials were also quizzed by the anti-graft body in connection with the swindle.

They are general managers Nousher Ali and Mahbubul Haque and deputy general managers Mohammad Musa, Altaf Hossain and Shafi Uddin.

The five were involved in the scam, an ACC official said, citing Bangladesh Bank and Sonali Bank investigations.

However, all of them dismissed the accusation, said ACC sources involved in the interrogation.

Including the six yesterday, the ACC has so far quizzed 23 Sonali Bank officials. The anti-graft body has also interrogated Hall-Mark Managing Director Tanvir Mahmud and his wife and group chairperson Jasmine Islam.

Despite several attempts, Kabir, who was MD from May 2010 to May 2012 when the scam took place, could not be reached for comment over the phone.

ACC sources said they would quiz five officials today in connection with the scam.

News: The Daily Star/Bangladesh/17-Sep-12

The Anti-Corruption Commission (ACC) yesterday sued five persons, including three high officials of Rupali Bank, for embezzling Tk 15 crore, as the amount was drawn from the bank against fake documents.

Two officials are from the bank's Dilkusha branch -- SM Atiqur Rahman, general manager, and Abdus Samad Sarker, senior principal officer, while the other is from its Gulshan-2 branch -- Mohammad Ali, deputy general

manager.

Earlier Mohammad Ali was posted in the bank's Dilkusha branch as an assistant general manager.

The two other accused are Abu Burhan Siddique Chowdhury and AHM Bahauddin, chairman and managing director of Everest Holdings and Technologies Ltd, a real estate company.

Jahangir Alam, deputy director of the anti-graft body, filed the case with Motijheel Police Station.

According to the case statement, the three officials of the bank in collusion with the realtor's chairman and MD swindled the amount, submitting fake documents between August 16, 2010 and January 1, 2011 from the bank's Dilkusha branch in the capital.

The statement also said the chairman and MD submitted a fake certificate of 'no liability' allegedly issued by a sub-registry office of Dhaka Sadar to the bank's Dilkusha branch, seeking a loan of Tk 25 crore on June 6, 2010.

Then the accused bank officials, without verifying the certificate, sanctioned Tk 15 crore.

News: The Daily Star/Bangladesh/17-Sep-12