A group of retail investors staged protests in front of the Dhaka Stock Exchange, urging the Securities and Exchange Commission to intervene in the market for the sake of stability.

They demonstrated for the 12th time this year, protesting an unusual fall in share prices.

Small investors, under the banner of Bangladesh Share Investors' Association (BSIA), took to the streets, seeking a final solution to the stockmarket troubles.

The benchmark General Index of Dhaka Stock Exchange finished the day at 4,645 points, after falling 70 points or 1.48 percent.

Investors urged the SEC to take action to stop directors' aggressive sell-offs. They also asked the regulator to give one month to sponsors and directors to comply with the mandatory share holding directive of SEC.

Mizanur Rashid Chowdhury, president of BSIA, said the regulator should remove those directors, who have shares below 2 percent, from the boards of their companies.

“It is apparent that participation of investors dropped significantly, as they were apprehensive about the ongoing writ petition issues on minimum shareholding and adopted a 'wait-and-see' approach,” IDLC Investments said in its daily market commentary.

Turnover rose 6.16 percent to Tk 183 crore, compared to the previous day. A total of 0.059 lakh trades were executed with 3.9 crore shares and mutual fund units changing hands on the Dhaka bourse.

Lafarge Surma Cement continued to be the most traded stock for the second consecutive session with a turnover of Tk 16.49 crore followed by Grameenphone with Tk 88.9 crore in turnover.

Purabi General Insurance was the biggest gainer of the day, as it posted an 8.25 percent rise.

First Security Islami Bank featured among the top ten losers after the adjustments made for its record date on Sunday.

Of the 258 issues that traded on the DSE, 200 declined, 35 gained and 23 issues remained unchanged.

All sectors declined: non-bank financial institutions lost 2.79 percent, banks 1.16 percent, power 1.31 percent, pharmaceuticals 1.09 percent, and telecoms 0.74 percent.

The Daily Star/ Bangladesh/ 29-May-2012

Qatar has proposed to invest its currency worth of $1.8 billion in the Bangladesh Bank.

The central bank will share profits with the Gulf nation from investing the fund abroad, a high official said.

Bangladesh received such a proposal from abroad for the first time in 25 years.

The proposal was made Sunday when a 10-member team led by Qatar's assistant minister for international cooperation affairs met BB officials in Dhaka.

BB officials had a detailed discussion with the Qatari delegation on the investment proposal.

The Qatari team enquired about the BB's foreign currency reserve (around $10 billion now), where the BB makes investment abroad and how much profit it gets against those investments.

The BB official told The Daily Star that the central bank makes a handsome amount of profit every year from the investments it makes abroad.

The investment of BB's reserve ranges from one day to one month or more. As a result, the rate of interest varies.

The official said the profit to be given to Qatar will be determined on the basis of the time for which it deposits the money with the BB.

He said Qatar will convey its final decision regarding the investment during Prime Minister Sheikh Hasina's visit to that country from today.

The BB official also said, if Qatar deposits the money with the BB, its reserve will increase and it will have a positive impact on the balance of payments.

The official said it will also bring a better result regarding Bangladesh's country rating.

He said, after 1987 this is the first time Bangladesh got such a proposal. Before 1987, some Middle East countries invested small amounts of money with the central bank of Bangladesh.

The BB official also said Qatar makes investment of a huge amount of money abroad. The country has offered to invest a small part of it with the BB as a symbol of Muslim fraternity.

The Daily Star/ Bangladesh/ 29-May-2012

UCB Securities Ltd and Mrs. Shoma Alam Rahman & Ahsan Imam have entered into an agreement to transfer entire shares of Mrs Shoma Alam & Mr. Ahsan Imam of Maryellen Capital Management Ltd. to UCB Securities Ltd and its parent company. Mr. Lutfur Rahman Badal, business leader, Mr. Shafiqul Alam, Additional Managing Director, UCB; Mr. Mirza Mahmud Rafiqur Rahman, Deputy Managing Director, UCB were present at the signing ceremony.

Financial Express/ Bangladesh/ 27-May-2012

The unaudited operating profit of the country's private commercial banks (PCBs) showed a mixed trend in the first quarter (Q1) this year.

Four major PCBs, having a larger market share, in terms of both deposits and credits, showed a lower rate of growth in their operating profits in Q1 of 2012 over the corresponding period of last calendar year.

Furthermore, a good number of primary dealer (PD) banks, out of a total of 12, experienced tough times in their operational performance because of liquidity constraints on account of their holding of a large chunk of government securities. This constrained their ability to extend interest-earning fresh credits during the period under report.

An additional concern for most PCBs is the increase of default loans in their portfolio during January-March period of 2012 -- a situation which, according to some bankers, is likely to worsen further in Q2 of 2012.

However, prudent fund management, along with earnings of higher interest income because of higher lending rate and increased spread, on the part of those PCBs, having surplus funds for investment in Q1 of 2012, led to a somewhat improved position about their profit earnings.

Fifteen PCBs, out of a total of 30, earned about Tk 15.50 billion, in aggregate terms, as the operating profit during the January-March period of 2012 against Tk 14.11 billion during the corresponding period of the last year, sources in the banking sector said.

The figures indicate that the operating profits of PCBs increased by nearly Tk 1.39 billion while such profits of four PCBs declined during the period

under review compared to their situation during the same period of the previous calendar year, mainly due to their liquidity problems.

The un-audited operating profit, however, does not indicate the actual financial position of a bank. The banks have to leave aside funds, on account of provisioning for their bad debts and also for payment of taxes to the government.

"The average credit-deposit ratio (CDR) of the commercial banks is almost stable in the recent months and this indicates a prudent fund management by them," a senior official of the Bangladesh Bank (BB) told the FE Saturday.

He also said the CDR ranges now between 80 per cent and 81 per cent as the BB is monitoring closely the situation to help minimise assets-liability mismatch of the banks.

The central bank earlier set CDR at 85 per cent for the conventional banks while it remains at 90 per cent for the Sharia-based Islamic banks.

The overall credit growth of the country's banking system witnessed a rising trend in the recent months because of higher investments by a number of PCBs in different sectors including rental power plants, telecommunications, and textiles, besides credits given for import of fertilisers, the bankers added.

The deposit growth, however, saw a slight fall during the same period due to higher inflationary pressures, squeezing the scope for keeping deposits with banks.

Credit growth particularly in private sector rose to 17.05 per cent or Tk 3,804.54 billion as on April 12 from 14.44 per cent or Tk 3,625.33 billion on January 5.

The central banker said many commercial banks have lent more with risks to increase their profit by the end of this June.

The bank deposit growth came down to 19.10 per cent or Tk 4,635.12 billion from 20.03 per cent or Tk 4,427.64 billion, according to the central bank statistics.

The weighted average spread between lending and deposit rates, offered by the commercial banks, rose to 5.68 per cent in February from 5.63 per cent in the previous month, the BB officials said, adding that the spread came down to 5.58 per cent in March.

In March 2011, the spread was 5.15 per cent, the BB data showed.

Talking to the FE, a senior official of a leading PCB said the spread in the banking sector increased slightly in the recent months as the commercial banks hiked their lending rates to help reduce the gap between their return on credits and their cost of funds.

The weighted average rate on lending stood at 13.69 per cent in the month of March this year while the interest rate on deposits averaged at 8.11 per cent.

In March 2011, the average lending rate was on 12.82 per cent and the average deposit rate, 7.67 per cent, according to the central bank statistics.

The spread reached 5.68 per cent level in February last after the central bank lifted the cap on lending rate in all but two sectors -- agriculture and export.

"The banks have increased lending rates in different sectors including those related to food items for reducing the gap between their interest earnings on lending operations and interest payments to depositors that largely reflected their cost of funds," the private banker said while explaining the reason for the rising trend of the spread in the recent months.

Earlier on January 4 last, the BB withdrew the cap on lending rate for all sectors and items, barring only two -- agriculture and export -- to facilitate the country's overall economic growth through boosting investments in different fields.

"We're working to bring down the interest rate spread to less than 5.0 per cent for credits to all areas of the economy, barring credit card and small and medium enterprises (SMEs)," the central banker said.

The PCBs, particularly primary dealer (PD) banks, faced liquidity problems due to higher borrowing from the country's banking system by the government to finance its budget deficit for the current fiscal year that would end in June.

The cost of fund for the PD banks has increased in the recent months because there is a correlation between inter-bank call money rate and interest rates on deposit, another PCB official said.

"The average yield on the government approved securities that the PDs are now holding, varies between 9.40 per cent and 9.60 per cent while they have to pay interest rates raging between 15 per cent and 17 per cent for borrowing a part of their funds from the inter-bank call money market," the PCB official noted.

The amount of non-performing loans (NPLs) increased by 11.68 per cent to Tk 26.45 billion in the first quarter of the current calendar year due to a sluggish trend in business, they added.

The banks had default loans worth Tk 252.98 billion or 6.57 per cent of their outstanding loans on March 30 this year, up from Tk 226.44 billion or 6.12 per cent on December 31, 2011, according to the central bank statistics.

"There is a double-effect of default loans in the banking system," the private banker said, adding that the banks will have to add the profit of default loans in their interest suspense account, instead of profit account. Besides, the banks will have to ensure provisioning against total default loans from their profits, he added.

The bankers also feared that the rising trend of classified loans in the banking system might affect their profitability by the end of second quarter of the current calendar year.

The central bank earlier selected 15 PDs -- 12 banks and three non-banking financial institutions (NBFIs) -- to deal with government securities in the secondary market.

Financial Express/ Bangladesh/ 27-May-2012

Bangladesh Institute of Bank Management (BIBM) organised a review workshop on ‘trade services operations in banks’ at its auditorium on Saturday in the city.

Nazneen Sultana, deputy governor, Bangladesh Bank, said the ongoing global liberalisation and integration process have brought considerable changes in international trade transactions and practices that have been affecting trade services by banks covering mainly facilitation of trade payment and trade financing.

Professor Dr. Shah Md. Ahsan Habib, director (Training), BIBM, presented a keynote about different functional areas and activities performed by the trade service department of the bank.

Among others, Professor Dr. Toufic Ahmed Chowdhury, director general, BIBM, lecturer Mahmoodur Rahman, BIBM, ATM Nessarul Haque, assistant vice president of Mutual Trust Bank Ltd., Md. Nazir Hossain, senior assistant vice president, Eastern Bank Ltd., Dr. Md. Haider Ali Miah, additional managing director of Export Import Bank of Bangladesh Ltd., Faruk M. Ahmed, additional managing director of The City Bank Ltd. and Mahabubul Alam, deputy managing director of Islami Bank Bangladesh Ltd., spoke at the workshop.

The Daily Sun/ Bangladesh/ 27-May-2012