The benchmark index of the Dhaka Stock Exchange rose again on Wednesday, coming a day after Tuesday's fall broke a four-day rising spell.
The DSE general index rose to 4289.7 points, gaining 112.48 points or 2.69 percent.
Shares and mutual funds worth Tk 2.53 billion changed hands, with prices of 234 issues gaining, 17 declining and five remaining unchanged.
The benchmark index was 4235.79 points, with a gain of 58.56 points or 1.4 percent, at 1:08pm; and 4323.78 points, advancing 146.55 points or 3.5 percent, at 2:08pm.
On Tuesday, the DSE general index slipped to 4177.22 points, losing 113.31 points or 2.64 percent.
The key index posted a gain of 64.37 points or 1.52 percent and rose to 4290.54 points on Monday. The premier bourse opened the week gaining 5.37 percent to 4226.18 points on Sunday.
Only last week, the bourse saw the index plummet to the lowest since December 2010. Despite undergoing topsy-turvy trading all through the week, DSE ended last week with a 201.03 points or 5.28 percent rise on Thursday.
The slide on Feb 6 set a new record with the DGEN plummeting to 3616.24 points—the lowest it has touched so far since December 2010. However, the rise on Thursday and an above 9-percent hike on Feb 7 saw the week closing at 4010.8 points, after gaining around 165 points.
Although the market stabilised a little in December 2011 after market regulator SEC declared a package of incentives, the stocks started taking a battering from the first week of the new year.
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The foreign exchange reserve of Bangladesh Bank has increased on the back of falling import cost over the last three months.
The number of letter of credits (LCs) opened in January was 27 percent less than LCs opened last January, and 24 percent in December and 23 percent in November.
The foreign exchange reserve of the central bank was $9.8 billion on Tuesday, nearly $1 billion more than what it was a month ago.
BB governor Atiur Rahman expressed hope that the reserve will become satisfactory if import cost remains low.
"Banks have been directed to avoid giving loans for unnecessary and luxury products, which has impacted the entire economy positively," he told .
Zaid Bakht, researcher director at the Bangladesh Institute of Development Studies (BIDS), said there will be no problem if import of luxury and less necessary products decreases. But it will be a cause of concern, he added, if import of capital machineries and raw materials for industries also shrinks.
"Growth in the industrial sector will also drop if import of capital machineries and industrial raw material declines. In that case, the expected economic growth (GDP growth) may not be achieved," Bakht warned.
He also expressed his satisfaction over low import of food.
According to data provided by Bangladesh Bank, goods worth $17.82 billion were imported in the first half of the current 2011-2 fiscal. The amount is 16.91 percent higher than that of the previous financial year.
In July-December period of 2010-11 fiscal, import costs rose 36.59 percent over the same period of the previous year. The rise in the whole fiscal was 42 percent.
Importers opened 35 percent less LCs to import capital machineries, and 62 percent less LCs to import food (rice and wheat) in July-December period of the current fiscal, BB data says.
LCs to import industrial raw material also decreased by 9 percent, though LCs for fuel oil import increased 103 percent.
LCs to import food shot up 88 percent, capital machineries 86 percent and industrial raw materials 69 percent in the first half of 2010-11 fiscal. The amount of LCs to import fuel oil, however, decreased 3 percent.
Both Rahman and Bakht said import of fuel oil rose due to extra fuel needed for power plants.
FOREX RESERVE, VALUE OF TAKA
The BB governor Rahman said taka is getting stronger against dollar and the supply of dollar to the local market increased in recent days as flow of remittance and export earnings increased and import cost decreased.
"The pressure on foreign exchange reserve (has) dropped… Taka is strengthening against dollar. I hope the trend will continue."
He said value of taka is rising in the kerb market as well.
Expatriates remitted $ 1.22 billion in January, the highest in a month in the country's history.
The lowest inter-bank exchange rate of dollar on Thursday was Tk 83.4. On Jan 29, dollar was exchanged at a record high of Tk 84.84.
Rahman said the demand of foreign exchange was high in the last few months as expenses to buy fuel oil, machineries, fertiliser and consumer products increased. "So taka devaluated against dollar," he said.
Export earnings increased 15 percent in first seven months (July-January) of current fiscal. The flow of remittance grew 12 percent.
A top official of Bangladesh Telecommunications Regulatory Commission (BTRC) told bdnews24.com on Wednesday evening that the letters were picked up by the representatives of Grameenphone, Banglalink, Robi and Citycell from their office.
BTRC chief Zia Ahmed said that the operators would have to make the payments within the next 10 days. "Their licences will not be renewed unless they deposit the money."
He told bdnews24.com on Tuesday that the letters would be readied on Wednesday.
Clarifying on the arrears, the BTRC official said that the four operators paid the first instalment of the licence renewal and spectrum fees after deducting 15 percent tax at source in Nov 2011.
Other than this, the operators also deducted 15 percent from their annual license renewal fee, revenue sharing and spectrum charge in 2010.
The total arrears from Nov 2011 and 2010 have accrued to Tk 578.2 million.
The biggest telecoms operator, Grameenphone will have to pay Tk 3.96 billion for renewal of their 2G licence along with the late fees, the top BTRC official said.
Of the amount, Tk 2.49 billion is for the first instalment for licence renewal and spectrum fee including the late fees and Tk 1.47 billion will have to be paid as late fee and other charges from 2010.
Robi's dues amount to Tk 1.99 billion which includes Tk 1.47 billion for licence renewal including late fees while another Tk 525.9 million are arrears along with late fees from 2010.
Licence renewal charges and 2010 arrears along with late fees amount to Tk 2.18 billion for Banglalink. This includes Tk 1.52 billion as renewal charges along with late fees while another Tk 652.3 million will have to be paid as arrears from 2010 and their late fees.
Citycell is to pay a total Tk 442.4 million including licence renewal charges, arrears from 2010 and the resulting late fees. Licence renewal with late fees will cost Tk 359.7 million and arrears along with its late fee will be Tk 82.6 million.
REACTIONS
Grameenphone's chief communications officer Kazi Monirul Kabir told bdnews24.com, "We did not receive any such letter from BTRC until 7pm on Wednesday. We will comment after we get the letter."
Banglalink's regulatory affairs general manager Mashid Rahman said, "We have got the BTRC letter, they have told us to pay within 10 days."
Robi's vice-president Mohiuddin Babar confirmed the receipt of the letter and said that they will give their reaction later.
Citycell's head of corporate communications Taslin Ahmed said they received the letter but will also give their reaction later.
Less foreign aid has been released than usual in the ongoing 2011-2 fiscal year and it put pressure on supply of foreign currency, the finance minister told parliament on Wednesday.
And the shortage of foreign currency in the market resulted in depreciation of taka, AMA Muhith said, responding to a question of AL MP Mohibur Rahman Manik.
"The net foreign aid in the first five months of 2011-12 fiscal was only $68.9 million which was $322.7 million in the same period of the last fiscal."
The letter of credit settlement amount during July-Jan period of the current fiscal stood at $20.6 billion while export receipts was $11.77 billion and remittance inflow $7.28 billion, Muhith added.
LIQUIDITY PRESSURE
Steps have been taken to reduce pressure on liquidity by using different instruments including repo, reserve repo and liquidity support, the finance minister told MPs.
In reply to a question of treasury bench colleague Jafrul Islam Chowdhury, he said call rate is now less than 20 per cent and in future, it is likely to come down to a reasonable level.
WIDER TAX NET
The minister said the government has taken steps to widen the scope for levying value added tax and supplementary duty.
In reply to a question of Jatiya Party legislator Salma Islam, he said digitalisation at the revenue department is going on and by 2016 customs, VAT and income tax departments would be modernised.
In reply to another question AL lawmaker Mostafa Jalal Mohiuddin, the minister said the Modernisation of VAT Environment project has been undertaken.
"Under the project VAT return can be submitted online," he said.
SOE DEBTS
The minister said until November last year, state-owned enterprises (SoEs) had a total of Tk 316 billion in dues.
In reply to a question of Jatiya Party lawmaker Nasrin Jahan Ratna, Muhith said Bangladesh Petroleum Corporation owed Tk 163 billion followed by Bangladesh Chemical Industries Corporation with Tk 53 billion.
CITY BANK ANOMALIES
Employees at the City Bank can lodge complaints with the central bank if there is any anomaly in promotion or discrimination in salary packages, the minister said.
Mostaque Ahmed Ruhi in a question asked the minister whether the allegation about promotion and salary discrimination in the bank is true. In reply, Muhith said City Bank is a private commercial bank and it has its own guidelines on appointment, salary package, promotion and transfer.
"If there is any anomaly in promotion, salary discrimination or yearly increment, the aggrieved employees can lodge complaints with the board of directors of the bank and if they don't get any solution, they can take turn to the central bank."
"If the allegation is proved, the central bank will take necessary action," Muhith said.