NEWS BRIEF DATE: 06-12-2020

Economy

Bangladesh tops India in sustainable competitiveness

Bangladesh has overtaken India in the Global Sustainable Competitiveness Index 2020 (GSCI) by showing a
significant improvement in utilizing its resources more efficiently. Besides, the country leaped 17 notches ahead in
the index, while India moved only 3. With a global ranking of 115 th out of 180 countries, Bangladesh widened its
lead against Pakistan (174th) and Afghanistan (178th) in South Asia this year. Sustainable competitiveness is the
ability to generate and sustain inclusive wealth, without compromising the future capability of sustaining or
increasing current wealth levels.

Bank and NBFI

Banks have to set aside more funds to absorb shocks

Banks will have to keep aside more funds in provision than they usually maintain to make them well-equipped so
that they can absorb shocks from any increase in bad debts caused by the business slowdown in the coming year.
The central bank is now working on the issue and would take a decision soon. A fresh instruction will be given to
banks within a day or two. BB Executive Director said, banks would be instructed to refrain from showing an excess
profit this year by maintaining additional provision.

Interest rate spread falls to 2.94% in Oct

The interest rate spread dropped slightly in October last as the banks slashed the lending rates more than that of
the deposit rates. The interest on the loans and advances decreased comparatively at higher rates than that of the
deposits in October 2020 as the banks are now implementing the low-cost financial stimulus packages to help
businesses overcome the adverse effect of the Covid-19 pandemic. The weighted average spread between the
lending and deposit rates offered by the commercial banks came down to 2.94% in October from 3.00% a month
ago. It was 4.07% in March.

Pharmaceuticals

Drug makers’ profits bounce back in first quarter

Listed drug makers saw their profits rebound in the first quarter (July-September) of the ongoing fiscal thanks to an
increase in the number of healthcare seekers. The pharmaceutical sector had taken a big hit at the end of the
previous quarter, when most people refrained from visiting hospitals in fear of contracting Covid-19. But the listed
companies' combined profits soared by 76% compared to the April-June quarter of fiscal 2019-20 to hit Tk 734
crore in July-September. Meanwhile, overall profits for listed drug makers grew 25% year-on-year for the same
period.

RMG

Apparel exporters dealt a fresh blow: rising raw material prices

There seems to be no end to Bangladesh’s apparel exporters’ problems. After order cuts and lower prices from
buyers, they have a fresh problem at hand: the rising process of raw materials. The development means the road
ahead for the country’s apparel exporters would be well bumpy. On average, the prices of raw materials such as
fabrics, yarns, cotton and packaging materials, edged up 5 to 10% in the last couple of months. The rise in cotton
prices, the low productivity caused by the pandemic and a stronger Chinese yuan are largely to blame for the price
ticking up.
High-end products still a long way off

Bangladesh's apparel industry is struggling to graduate to a producer of high-end items despite being in the
business for 4 decades and one of the top suppliers globally, missing out on the opportunity to receive premium
prices from international retailers and brands. The multi-billion-dollar industry, which contributes about 85% to
the national export, has embraced a lot of reforms since the 1980s. Still, investment has been less in the
production of value-added garment items. As a result, Bangladesh has remained a prominent manufacturer of
basic or semi-high-end garment items.

Local Market

Square, Renata, Fortune on Forbes’ list of best companies in Asia

Three Bangladeshi companies-Square Pharmaceuticals, Renata and Fortune Shoes-have made it to the list of the
top 200 publicly listed companies in the Asia-Pacific region published by Forbes Magazine based in the United
States (US). According to Forbes, the 200 listed companies are small and mid-sized, with sales of less than $1
billion. Forbes Magazine recently published its "Asia's 200 Best Under A Billion" list for 2020. Four countries-China,
India, Taiwan and Thailand-topped the Forbes list with 19 companies each, followed by Japan and South Korea.

Energypac Power Generation Ltd eyes to expand its diesel generator, vehicles market

Energypac Power Generation Ltd. or EPGL is eying to expand its market share of diesel generators and commercial
vehicles, among other products. The company is also paying more attention to add more values locally to its own
generator brand 'GLAD' and JAC commercial vehicles, assembled at Energypac industrial park at Sreepur in Gazipur
district. Energypac, which also exports electro mechanical equipment to many countries in the world, including
India, Sri Lanka and some African countries, will expand its export basket and roll out more products for local
markets provoded it got policy support by the government.

E-Commerce

Deliver goods in 7 days, or pay fine

E-commerce companies have to ship products to buyers within 7-10 days after completing orders, depending on
delivery locations. Failing to do so, they will face fines and have to refund the customer. They will even be indicted
in a fraud case for supplying a faulty or subpar product. With many such guidelines, a policy for e-commerce is
coming up to streamline the fastest-thriving business model. However, this policy is only for web-based e-
commerce companies. The commerce ministry will later issue a separate policy for small e-commerce initiatives
that have grown on Facebook and other social media sites.

Light Engineering

Taxes and duties take the wind out of the light engineering sector’s sail

Prime Minister has declared 2020 as the "Light Engineering Product Year" to help -the potential sector flourish. The
government also has undertaken various long-term initiatives for the development of the industry. Paradoxically,
bureaucratic negligence and increased hassles for small enterprises now is likely to end the year as a dismal one for
the sector that employs over a million people and saves billions of dollars in foreign currencies. When the sector
was supposed to receive maximum support, it is facing an increased discrimination in taxes and duties and in terms
of responsiveness from government offices.