Monthly Business Review

Volume 10 l Issue 05 l May 2014
COVER STORY
c o n t e n t s
in this issue
The leather footwear industry in Bangladesh: A
2 sector awaiting boom
Recently, the leather industry of Bangladesh has crossed
the USD 1 billion export mark in a single calendar year. and
it is has aimed to reach USD 16 billion export target over
the next 10 years. The leather footwear sector has been
playing the dominant role in yielding export earnings
of Bangladesh. This month’s cover story identifies and
analyzes the potential of this booming sector.
Expert Opinion
8 Interview with Mr. MD Nazmul Hassan (Sohail)
Managing Director, Leatherex Footwear Industries Ltd.
IDLC News
IDLC Investments to act as Issue Manager for
25 the IPO of Impress-Newtex Composite Textiles
Limited
ECONOMY
Bangladesh to meet up 15% of global cotton
demand by 2022 10
Largest coal-based power project to be set up
in Cox’s Bazar 10
TRADE
Import rise by 30.7% on year-on-year basis 13
Myanmar’s ban on timber export may hurt
local market 13
BUSINESS
CEMS organizes two of the biggest medical
expositions in the country 15
REGULATORY NEWS
11 manufactured products to receive policy
supports and cash incentives 18 IDLC becomes exclusive Loan partner of Lamudi &
Bangladesh Bank to initiate BDT 1000 crore of 26 Carmudi Limited
SME refinance and pre-finance scheme 18
MARKET ROUNDUP
Major Currency Roundup 20
Commodity Market Roundup 21
INTERNATIONAL
Apple buys Beats for USD 3 bn 22
Finger vein ID soon to substitute ATM cards 22
MONTH IN REARVIEW
Design & Printing nymphea
Business-firm specific 24
CAPITAL MARKET REVIEW
Market Commentary 28
All rights reserved. No part of this newsletter may be

reproduced in any form, by print, photoprint, microfilm or any
other means without written permission from the publisher.
If you have any comments and/or
suggestions, please write to us at
mbr@idlc.com
IDLC MONTHLY BUSINESS REVIEW
The Leather Footwear Industry in Bangladesh:

A sector awaiting boom
-Rifat Ishtiaq Khan
O
ver the last six decades, the leather processing industry has established itself to become a crucial sector for the development
and growth of Bangladesh economy. Back in the early 1940s, migrants from India set up leather industries in Bangladesh, being
induced by the availability of indigenous raw materials in this part of the world. After the liberation war of 1971, many of the then
entrepreneurs left the country, abandoning their enterprises which left the sector suffering until 1980-81. Major policy reforms were taken
by the government in the year 1981 which supported the revitalization of the sector. The leather industry in Bangladesh can be segregated
into three different sectors- footwear, leather and leather products (i.e. handbags, carry bags, wallets, etc.). Off late, the footwear sector of
the country has emerged as the most important among the lot in terms of value addition. It has also been the fastest growing sector in the
leather industry.
The true potential of the leather industry in Bangladesh was reflected as the export earnings from this sector crossed USD 1 billion mark in
the July-April period of 2014. The footwear sector in particular has been the clear frontrunner in achieving such export earnings, contributing
41.6% of the earnings by this sector. China earns the most by exporting leather products in the global market, but as the labor cost has risen
abnormally high in the country, it has been losing its market share due to increased prices of high cost of production. Bangladeshi leather
industry entrepreneurs are looking forward to grab this opportunity with both hands and aim to export USD 16 billion within the next ten
years. Market analysts and experts are betting on the country’s footwear sector to achieve the target.
2
Focus on the Footwear sector

The modernization of the footwear industry in Bangladesh, which Bangladeshi leather products. The government has also been
has grown since the colonial era, occurred during the late 1980s. supporting the leather industry by offering tax holiday, duty free
Currently, the country resides more than 3000 footwear production imports of raw materials and machinery for export-oriented leather
units. The composition of the production units includes around markets.
23 relatively large units having mechanized and semi-mechanized
technology. The rest of the units are of small and medium production The manufacturing process of a typical leather shoe
entities. The World Footwear Yearbook 2012 report suggested that Manufacturing of most of the leather shoe pairs follow a general
Bangladesh annually produces 276 million pairs of shoes, which is process called the Goodyear Welt Process. Taking the name of the
around 1.3% of the world share. The report also ranked Bangladesh inventor who devised the original machine to replace the hand sewn
in the seventh position among the top ten footwear producers method, the Goodyear welt process is a traditional method used for
worldwide by quantity. China tops the list by producing 12,887 manufacturing leather shoes with typically nine different steps.
million pairs of shoes which is 60.5% of the world share.
The nine steps are cutting, sewing, pulling over, chain stitching, out
Around 90% of the leather footwear manufacturing units are sewing, edge grinding, applying coating, giving finishing touches
located around Dhaka, while some exist in Chittagong, Kishorgonj, and branding.
Bhairab and Khulna region. Those existing in Dhaka are mainly
concentrated in the areas around Bongshal and Siddique Bazaar. Cutting is the first step of making a leather shoe. In this step, each
Bangladesh Bureau of Statistics (BBS) suggests that such crucial
pieces of leather is diligently checked, molded into a specific shape
footwear manufacturing units provides direct employment for more
and then proceeded to cut. The cut leather is then sewn in order
than 35,000 people and more than half of them are involved in
to bring it more into three dimensions. The stitches would vary
mechanized and semi-mechanized units.
according to the unique designs of different footwear manufacturers.
The third step is called the pulling over which involves placing the
The competitive edge of Bangladesh
sewn upper leather to the inner sole. This stage is important as the
The main advantage that leather footwear manufacturing units have process of pulling over determines the level of comfort. The shoe is
in comparison to other countries is the abundant supply of quality then chain stitched. This steps requires sewing the rib which stand
raw materials (i.e. hide and skin of animals) at reasonable prices. between the pulled over upper and inner sole together with the
Around 40% of skin and hide come from the animals sacrificed leather. The next step is called the out sewing. By out sewing, the
during annual Muslim festival of Eid-ul-Azha. Additionally, Muslim cushioning materials such as the cork and shank are sewn into the
weddings and daily consumption of meat also provide substantial sole. This is a process which impacts the outward appearance of the
supply to the leather manufacturers. The leather industry in many
shoes. The sixth step in the manufacturing process is called edge
countries suffers from insufficient supply of raw leather which makes
grinding, where the edge of the sole is shaped and grounded down
them import from other countries at high price.
with a blade which keep on rotating at high speed. Coating is then
applied to the shoe. Hot coating is applied to the leather and ink
The leather industry in Bangladesh enjoys Generalized System
is applied and polished. Various types of coatings can be applied
of Preferences (GSP) with the major importing countries. GSP is a
in order to decorate the shoe. Shoes are then given the finishing
preferential tariff system which provides tariff exemptions to some
touches. The dirt and oil which get stuck by themselves during the
of the selected countries. As Bangladesh enjoys tariff concession
manufacturing process are washed off and the shoes are polished
facility under GSP, exporting leather footwear items from Bangladesh
with cream. After rigorous checking, the shoe is finally branded and
is cheaper and more profitable when compared to exporting from
given a symbol of assurance of quality.
other countries.
One other major advantage that Bangladesh holds and its

The export market
competitors lack, is the availability of cheap labor. The leather According to Export Promotion Bureau (EPB), the highest value
footwear sector is a labor intensive industry which is well suited to of footwear products of worth USD 0.4 billion were exported to
Bangladesh as it boasts influx of cheap labor. Additionally, the labor Japan. Germany became the second major exporting country
from Bangladesh possesses a sense of inherent craftsmanship which where footwear worth the value of USD 0.24 billion was exported.
is imperative for the footwear manufacturers of the country. Footwear products worth USD 0.14 billion and USD 0.11 billion were
exported to United States of America and Netherlands respectively
In addition to these, the Bangladeshi government is in the process of who became the third and fourth top leather footwear exporting
setting up separate Leather Zones by relocating the existing industry destinations for Bangladesh. It has to be said that although leather
sites from Hazaribag to Savar. The relocation process would also footwear dominates the footwear sector, other footwear items are
involve making the leather processing units fully environmentally also included in this sector which includes footwear made of jute,
compliant. Such initiative must attract more foreign buyers for rubber or plastic.
3
Source: Export promotion Bureau
Analysis of export growth statistics

The export of leather footwear products has been the highest in APICCAAPS, revealed some intriguing information about the
comparison to other footwear products in the leather industry. dynamic of the global footwear market. It theorized that as of 2011,
A total sum of USD 443.5 million has been earned by exporting Asia dwarfed the rest of the continents operating in the footwear
leather footwear to other countries in the Jul-Apr period of FY 2014. industry with an overall share of around 90% of the global footwear
production. China became the undisputed leader in the production
In the same period export earnings from leather products (such
ranking producing 12,887 million pairs annually (60.5% of world
as hand bags, carry bags and wallets) and leather have been USD
share), while Brazil was the only non-Asian country among the top
424.1 million and USD 197.4 million, respectively, suggest EPB data.
5 producers. Bangladesh became the seventh largest footwear
Highest export growth of 22.1%, however, has been observed for producer, producing 276 million pairs of footwear products annually.
exporting leather products. Meanwhile export growth of leather and
footwear was 6.1% and 5.8% respectively. The report suggests that USA and India closely followed China which
is the world’s leading market for footwear in terms of consumption.
Dynamics of global footwear market Annually, 2,761 million pairs of shoes were sold in China (15.9% of
world share) while 2,248 million pairs are 2,202 million pairs were
The World Footwear Yearbook 2012 published by the Portuguese
sold in USA and India, respectively.
footwear, components and leather good manufacturer’s association,
Source: Export Promotion Bureau Source- The World Footwear Yearbook 2012
4
comparison to all other continents, by charging an average price

below USD 5 per pair. Meanwhile, Europe has been charging the
USD 25 which is the highest when compared to other continents in
the world. Such low price for Asian footwear products explains the
reason for such high demand of the region’s footwear products in
overseas markets.
Source- The World Footwear Yearbook 2012

Asia persists on being the powerhouse of footwear industry in terms

of exports. According to the report, 84% of the world exports came
out of Asia while Europe became the distant second, exporting 11%
of the world total. The research work suggested that almost three
out of every four pairs of shoes are exported worldwide by China
alone (annually 10,170 million pairs, capturing 73.1% of world share).
Recent developments in China

China has been leading the leather industry for quite some time;
however, lately the country’s industry has been facing a number
of constraints which include anti-dumping tax imposed by the
European Union (EU) and appreciation of Chinese currency by
around 20%. The labor cost in China has also abnormally risen by
about 30 to 50%. Resultantly, China has started relocating its leather
industry to its neighboring nations such as Vietnam, Cambodia,
Pakistan, India and Myanmar. Doors of opportunities have been
opened up for Bangladesh to attract more foreign investments from
Source- The World Footwear Yearbook 2012 China in the leather sector.
The World Footwear Yearbook 2012 also unveiled an interesting Experts claim that if only 10% of the Chinese market can be grabbed,
trend about the average export price by continents. It said that the USD 16 billion export target from footwear industry within the
the Asian region persistently has been offering lowest prices in next ten years would be very easy to attain.
The entire leather industry is aiming to earn USD 16 billion within the next ten year and the leather footwear sector of Bangladesh
would play the most important role in the pursuit. Government should take certain measures which would enable our country to
grab greater export market share. Such initiatives include fast implementation of the Central Effluent Treatment Plant (CETP) at Savar
Tannery Estate after relocating from Hazaribagh and lifting the 4% tax which is collected by banks from leather manufacturers who
process leather in local tanneries. It is now evident that leather footwear sector of the country holds immense potential as the country
has been one of the largest producers of footwear in the world in terms of quantity. More importantly, as leather industry is being
relocated from China to other countries, it is crucial that Bangladesh grabs the opportunity with both hands. Accordingly, necessary
steps should be taken by the government in order to accommodate the Chinese firms. Government must ensure uninterrupted
provision of power at cheap rate and provide better infrastructural facilities. If the two crucial issues are addressed, we would be well
on track for achieving the export target
(The writer is working as an analyst in the Credit Risk Management Department in of IDLC Finance Ltd. and can be reached at ishtiaq@idlc.com)
5
Expert opinion
Company Profile- Leathex Footwear Industries Ltd.
Leatherex Footwear Managing Director : Mr. MohammedNazmul Hassan (Sohail)
Industries Limited, a
100% export oriented Year of Establishment : 2000
leather footwear industry has been working continuously with Website : www.leartherex-footwear.com
Japanese and Italian expertise. It is now a leading footwear industry
Main Product : Leather Casual, basic, fashion Shoes,
in Bangladesh, catering to the footwear needs of a global clientele. Mesh shoes, Pumps, Men’s & Ladies
It is manufacturing and exporting all kinds of Leather Footwear and Sandal, Boots.
footwear components.
Turnover (Yearly) : 5 million US dollars approximately
Leatherex Footwear Industries Limited has been playing lead Yearly Capacity : 8,00,000 pairs (depends on design/
role in the leather shoe manufacturing and exporting business of article)
Bangladesh and in recognition of its outstanding performance, Building Area : 75,000 sqft
it has received various awards, which includes “The Financial Number of Employees : 1200
Mirror Business Award 2005”, “National Export Trophy for 2001-
Main Export Market : Japan, Korea, USA, UAE, Germany, and
2002 (Silver)”, “National Export Trophy for 2005-2006 (Gold)”, “and
Italy.
National Export Trophy for 2008-2009 (Gold)”.
“The leather industry of our country frequently faces

stiff competition from countries like Myanmar, India,
China,Vietnumand Pakistan. We have to bear in our
minds that we must be competitive and produce
better products than our competitors, in order to
stay in business.”
Interview with
Mr. Mohammed Nazmul Hassan (Sohail)
Managing Director
Leatherex Footwear Industries Ltd.
How did you start this business and the motivational aspects desired export target, certain conditions are prerequisite. Such
which led you towards entering into this venture? preconditions include calm and stable political environment,
Previously, Bangladesh only exported crust leatherfrom the efficient regulatory body, safe and protected industry for the
leather industry, as intermediate product.Other leather products workers, buyers and entrepreneurs, efficient and accident free
such as leather shoes and bags had not penetrated into the traffic, no further such undesired incidences in the RMG sector
international market by then. We realized that we could produce like that of Rana Plaza and Tazreen garments, etc. Keeping all
high-quality leather items by utilizing our existing high quality such externalities stable, we would look forward to capacity
raw materials and competent labor force. Hence, to enter into building which will be our first priority in the years ahead. Most
the untapped market in order to enhance the export earnings important is competitiveness in the World market and reduction
from this sector and contribute to the leather industry as a whole, of high bank interest rate. We would also consistently search for
Leatherex stated its operations back in 2000. new opportunities and penetrate into new markets overseas.
And, once new scopes and opportunities would be identified,
Recently, the leather industry has crossed USD 1 bn export mark, accordingly, we will plan to expand our existing infrastructure
and in the next 10 years this industryis aiming for USD 16 bn to accommodate high business volume.
export target, what will be your strategies in reaching that goal?
This is over ambitious target. We can reach to higher target for Currently, in which countries you are exporting your products?
sure. There are obstacles in every step. In order to reach the Currently, the major exporting market of Leatherexlies in
8
a group of countries which includes Japan, Germany, Italy, are electricity disruptions, power has to be generated by diesel-
Austria, Australia, Canada and USA. run generators, and the cost of running diesel generators is very
high. Poor condition of the Dhaka-Chittagong highway road
All the tanneries are to be relocated from Hazaribag to Savar also makes it very difficult and costly to move our goods as per
by March next year. How do you think it will affect the existing buyers’ stiff deadline.
leather product manufacturers in the country?
This is definitely not only a good initiative but an essential one In what areas, do you think Bangladesh holds a comparative
as well. Recently, the foreign buyers have raised their concerns advantage over its competitors in the leather footwear
about the absence of ETP and pollution-free operations of business?
tanneries in Bangladesh. Moving the tanneries to Savar would The main advantage that Bangladesh holds is that, it has
ensure production of leather products in an environmentally adequate supply of the main raw material, leather, which
friendly way. This would mean more foreign buyers would comprises of minimum 50% to 80% of a leather shoe/bag. In
purchase the leather products from Bangladesh as environment addition to this, the linkage industry like the ones producing
compliance would be met. shoe insole and outsole have also developed, gradually. Our
labors also have good trainable workers and craftsmanship
It has been in the news that world leather footwear which gives us pretty unique combination of advantages over
manufacturing industry, which is dominated by China, is competitors. Our country also enjoys GSP facilities in EU, Japan,
shifting toother neighboring countries in Asia due to labor Korea and other countries, which gives us a competitive edge.
cost differential, which means more foreign investment in the
Bangladesh. What are your views in this issue? What are your recommendations regarding policy formulation
Even though there is opportunity for even Chinese firms to of the government which you would like to suggest, in order
relocate in Bangladesh, but frankly speaking, currently we do to attain expansion and growth of this key business sector?
not have the required level of power supply and industrial In order to have strong growth of the leather industry,
zone suitable for foreigners in order to accommodate them. government policy support should be continued as before,
Shortage of power and energy has been the only barrier for bureaucratic hassles should be eliminated, AIT should be
such foreign direct investment in the leather sector. We need a minimized for fair competition and higher cost of diesel for
long term solution in this regard to capture the fleeing market power generation should be compensated by higher subsidies.
share of China.
Where do you see Leatherex in the next 5 years?
Currently, how many employees are operating in your We look forward to adopting new technologies for our existing
company and what role do you think Leatherexis playingin manufacturing units in order to launch new brands under ODM
contributing to the economic growth of Bangladesh? program. ODM or Original Design Manufacturer is a program
Currently, we have 1,200 employees working in Leatherex. Our under which we plan to design, manufacture and brand our
efficient human resource management consistently focuses on own products ourselves. In the future, we would also like to
building skilled labor force whose production adds to the GDP invite our major foreign buyers in Bangladesh and showcase
of the country. Additionally, Leatherex values its employees by our products and capture more market share.
satisfactory remuneration. Hence, by focusing on building skilled
manpower and building new destinations abroad, Leatherex What are your advices to someone who wants to start a
aims to contribute to the economic growth of the country. similar business?
One who wants to start a similar business, must at first ensure
What barriers or problems do you face as a leather footwear that he has an efficient and qualified management, which
business entrepreneur, to do business? is dependable for the day to day operations of the business.
The main problem, as I have already discussed is shortage of Additionally, it is also imperative for the entrepreneur to be a
power and energy and inadequate infrastructure. When there leather professional.
9
ECONOMY
Foreign exchange reserve climbs up to USD 20.37 bn
The foreign exchange reserve of the country has inclined to be at
USD 20.37 billion at the end of April 2014, up by 37% from previous
year and 7.27% from the previous month. The reserve stood at USD
14.83 billion in the same period of last year and USD 18.99 billion in
the last month. Despite a drop in the remittance, the growing export
and slow import have supported the rise of forex reserve.
The central bank has purchased around USD 4.2 billion from local
commercial banks in the first 10 months of the fiscal year and led
to such incline in the reserve. The higher foreign exchange reserve
which was primarily caused by widening current-account surplus
can cover more than six month’s import, suggests central bank. Source: Bangladesh Bank
Energy saving investment can save USD 46 million worth of energy per year
Tetra Tech, a globally renowned energy audit company disclosed the information that it is possible to save USD 46 million worth of energy
every year by investing USD 140 million in the energy saving initiatives, which have payback periods three years. The energy audit was
performed under the technical assistance (TA) agreement signed between Industrial and Infrastructure Development Finance Company
(IIDFC) and Asian Development Bank (ADB) with intent to identify bankable energy efficiency projects in 6 sectors. The interesting audit
result was revealed in a workshop on capacity building of the financial institutions in financing energy efficiency projects.
The event which was jointly organized by IIDFC, ADB and Tetra Tech was attended by 50 participants from 20 financial institutions. The
workshop concentrated on various financing tools and mechanisms of energy efficiency projects. Software was provided to the workshop
participants which would aid them in preparing appraisal for energy efficiency projects in the future. Financing under energy efficiency
program would protect the interests of the entrepreneurs and financiers and make their projects more market competitive and viable,
suggested IIDFC. Based on the high potential opportunities for the industrial sectors, a financial manual was also released in the event which
presented 12 financial tools.
Bangladesh to meet up 15% of global cotton demand by 2022

According to the Agricultural Outlook 2013-2022, published by the
Food and Agricultural Organization (FAO), Bangladesh can meet
up 15% of the global cotton demand with its production within
the next 8 years. According to Bangladesh Textile Mills Association
(BTMA), the number of fabrics manufacturing units increased from
777 in 2012 to be at 782 in 2013 and the number of dying, printing
and finishing units has also increased from 234 in 2012 to be at
240 in 2013. The apparel industry of Bangladesh heavily depends
on the cotton-based yarns,while knitwear and denim production
accounts for around three quarter of the Bangladesh’s export
earnings. Analysts claim that factors like stable political situation
and good infrastructural facilities are pre-requisite to attract
foreign investment in this sector. Increased foreign investment is
crucial to double the use of spindle and make the expected level of
production within the next eight years.
The consumption of cotton consumption in Bangladesh would

increase from 3.7 million bales of raw cotton in the FY 12-13 to
stand at 3.9 million bales in the FY 2013-14, forecasted the US
Department of Agriculture (USDA).
10
Largest coal-based power project to be set up in Cox’s Bazar

With the aim to minimize the dependence on natural gas for plant in comparison to that of oil-based power generation plants,
electricity generation, the government has decided to set up a theorized the study.
1200 Megawatt (MW) coal based power generation project at
The power development board (PDB) stated that the project is
Matarbari, Cox’s Bazar. Japan International Cooperation Agency
awaiting approval from the Executive Committee of the National
(JICA) will finance the USD 403.21 billion project for construction of
Economic Council (ECNEC). After getting the go-ahead, the state-
the coal-fired power plant at Matarbari.
owned Coal Power Generation Company Bangladesh Limited
(CPGCBL) would implement the project and the facility would be
JICA’s feasibility report conveys that the coal-burnt power generation
operational within this year.
would cost BDT 7.3 per kilowatt-hour (Kwh), which is BDT 8.31 less than
the production cost incurred by the oil-based rental power After the ongoing 250 MW capacity-Barapukuria, set up in the
stations in Bangladesh. Bangladesh would be able to save northern district of Dinajpur, if given the approval, the Matarbari
BDT 70 billion per year for generating power by coal at Matarbari power project would be the largest coal-fired plant in the country.
Private sector credit slightly inclines

Credit provided to private sector has increased from being at BDT
480,176 crore to stand at BDT 486,378.40 crore. The year-on-year
credit growth rate in the private sector was 11.46% in March 2014;
this was, however, below the target of 16.5% set to be achieved by
June 2014 as per the monetary policy statement of the central bank.
At the backdrop of political uncertainties, the private sector credit

growth faced a 14 year low at 10.6% in December 2013. Market
analysts suggest that the import growth prevailing in the last few
months have led to the rise in the private sector credit growth in
March 2014. Source: Bangladesh Bank
Balance of payments sluggish in March

The export-import balance (Balance of Trade) registered a deficit
and rose to USD 4.94 bn in the first nine months of the current
financial year from USD4.86 bn in the corresponding period of
the FY13 resulting from increased import payments in July-March,
2013-14 compared with the same period of previous fiscal.
Even though, net other investment declined, higher portfolio

investment and positive foreign direct investment of a large amount
contributed to financial account surplus of USD1426 mn during the
same period. Current account together with Errors and omissions
surpluses resulted in a surplus of USD3885 mn in overall balances
during July-March, 2013-14 against a surplus of USD3948 mn during
July-March, 2012-13. Source: May 2014, Major Economic Indicators, Bangladesh Bank
11
USD 60 million to be lent by World Bank for VAT reforms

The Washington based international financial institutions, World Bank has decided to lend USD 60 million of interest-free credit to Bangladesh
with the intent to enhance tax revenue and modernize the country’s Value Added Tax (VAT) collection system. The fund has been provided
under a VAT improvement program of the World Bank which aims at increasing the number of active registered VAT payers from 35,000 to
85,000 in the country, within the next five years. An array of new services would be provided under this new project. The project is expected
to improve transparency in the VAT administration system, provide online VAT taxpayer services, support the government in implementing
the new VAT laws, facilitate better services and trim administrative costs for the taxpayers.
Four components namely- operational modernization, integrated VAT management system, institutional strengthening and capacity
building, and program management have been incorporated in the project. The entire system would be based on a centralized platform
and all the VAT, tax offices along with all call, data and processing centers would have access to the platform.
In order to have faster economic growth and overcome poverty in a country like Bangladesh, it is imperative for the country to improve its
ability to raise tax revenue, theorized World Bank.
Selected Economic Indicators
Item Period/As of Value/ bn Period/ As of Value/ bn +/(-)%
Foreign Exchange Reserve (USD) May'14 20.03 May'13 14.40 39.12%
Workers’ Remittances (USD) April '14 1.23 April '13 1.19 3.18%
Revenue Collection (BDT) March '14 108.27 March'13 101.83 6.32%
Broad Money (M2) (BDT) March '14 6677.10 March'13 5791.09 15.30%
Reserve Money (RM) (BDT) March '14 1217.12 March'13 1081.90 12.50%
Total Domestic Credit (BDT) March '14 6137.15 March'13 5513.21 11.32%
Credit to Private Sector (BDT) March '14 4863.78 March'13 4363.54 11.46%
Source: May 2014, Selected Economic Indicators, Bangladesh Bank
12
TRADE
Foreign investment in stocks for April registers highest amount in 12 months l

The net foreign investment in stocks observed the highest incline
since the past 12 months as it spurred by 489.9% in April 2014 in
comparison to the preivious month and stood at BDT 572 crore.
Foreign investment in stock was BDT 96.97 in March, 2014. Dhaka
Stock Exchange (DSE) data suggests that a total of BDT 304.35 crore
was sold and BDT 876.44 crore was bought by foreign investors in
the month of April 2014. For the period of January til April of 2014,
the foreign investors bought shares of value BDT 1,811.9 crore and
sold shares of value BDT 743.45 crore, this made their net investment
worth BDT 1,068.46 crore for the period.
Source: Dhaka Stock Exchange

Market analysts claim that foreign investors have been attracted by the
favorable macroeconomic indicators and easing political tensions in the The foreign investment account, also known as portfolio
country. Additionally, the international merger between Lafarge with investment makes1% of DSE’s total market capitalization.
Holcim and GlaxoSmithKline with Novartis also played a prompting role According to DSE’s data, the latest market capitalization recorded
in making the investors investing in such aggressive manner. was BDT 291,362 crore.
Import rise by 30.7% on year-on-year basis l

With easing political situations, the importers are tending to import more from foreign countries. As per Bangladesh Bank data, the overall
settlement of letters of credit (LCs) was at USD 3.44 billion as of March 2014, this was USD 2.63 billion in the same period of previous year,
and thus a growth of 30.7% was observed on year-on-year basis. According to the central bank data, a total of USD 607.85 million, USD
220.12 million, USD 54.19 million, USD 76.76 million, USD 17.10 million, USD 4.06 million and USD 26.64 million have been spent for the
purpose of importing petroleum, chemical products, rice, wheat, milk food, dry fruits and pulses respectively in the month of March 2014.
Source: Bangladesh Bank
Myanmar’s ban on timber export may hurt local market l

The Bangkok Post report published on March 25, 2014, suggested like Indonesia and other tropical countries which would raise
that that the Ministry of Environmental and Conservation and the cost by around BDT 30 to 50 for each cubic feet (CFT), due
Forestry in Myanmar has imposed an export ban on timber, with to the distance involved. Bangladesh meets 20% of its demands
effect from April 1, 2014. The forest area in Myanmar shrank from from Malaysia and rest of the demand is met from countries like
57.9% in 1990 to 47.6% in 2005, this is the reason for which the Indonesia, Nigeria, Papua New Guinea, United States and Canada.
government of the country took such a decision, claimed the report.
According to Bangladesh Timber Merchant’s Association (BTMA), Ever since the Bangladeshi government imposed a moratorium on
Bangladesh meets up 70% of timber demands from Myanmar and log cutting from any natural forest in 1989, Bangladesh has been
such a ban would have adverse effects on Bangladesh economy. increasingly dependent on timber from Myanmar, mainly for the
Bangladesh would then have to look towards alternative countries low costs involved.
13
Category wise Export Import LC statistics

USD in mn USD in mn
July-April July-April July - February, 2014 July -February, 2013

Item Change Items
13-14 12-13 FLCO SOLC OSTLC FLCO SOLC OSTLC
Knitwear 9,803.35 8,381.88 17% Capital Machinery 2,771 1,816 3,788 2,112 1,517 2,890
Textile Fabrics (B/B & Others) 4,385 4,199 2,860 4,129 3,575 2,760
Woven RMG 10,166.67 8,925.35 14%
Rice and Wheat 1,001 1,066 278 725 444 421
Frozen Food 534.98 433.86 23%
Chemicals & Chem. Products 2,595 2,609 1,215 2,524 2,702 1,006
Home Textile 649.69 648.26 0
Petroleum & Petro Products 3,721 3,233 1,468 3,080 3,229 1,294
Leather 424.05 316.70 34% Edible Oil & Oil Seeds 746 850 599 945 851 788
Chemical Products 80.09 79.60 1% Raw Cotton 1,827 1,734 1,153 1,637 1,371 1,146
Foot Wear 443.54 340.56 30% Scrap Vessels 711 650 400 842 658 445
Engineering Pulses 217 295 122 321 234 241
296.28 308.91 -4%
Products Cotton Yarn 803 711 564 743 697 502
Agricultural Paper and Paper Board 254 227 110 215 208 87
486.74 427.42 14%
Products Synthetic Fibre & Yarn 441 409 309 410 349 291
Raw Jute 99.55 199.26 -50% Sugar and Salt 644 696 408 481 661 477
Others 1,669.45 1,721.29 -3% Others 9,574 8,881 5,920 8,476 7,493 5,600
Total 24,654.39 21,783.09 13% Total 29,691 27,375 19,195 26,640 23,989 17,948
Source: Export Performance for July-April FY2013-14; Export FLCO = Fresh LC Opening, SOLC = Settlement of LC, OSTLC=Outstanding LC.
Promotion Bureau, Bangladesh Bank. Source: Major Economic Indicators: Monthly Update, May 2013, Bangladesh Bank.
INVESTOR’S CORNER
Export Processing Zones Statistics l
Cumulative export in eight EPZs at the end of
April 2014 for the FY 2013-14 was USD 3524.788
mn as compared to USD 34,502.37 mn at the end
of FY 2012-13.
Cumulative investment in eight EPZs at the end

of April 2014 for the FY 2013-2014 was USD 235.1
mn as compared to USD 2,785.49 mn at the end
of FY 2012-13.
Cumulative employment in eight EPZs at the

end of April 2014 for the FY 2013-2014 was
9,088 employees while in FY 2012-13, it was
374,008 employees.
Source: Bangladesh Export Promotion Zone Association
14
BUSINESS
Scorching summer heat leads to Textile sector to receive USD 200
high demand for air conditioners million investment from New York-
and refrigerators l based company l
The sale of home appliances such as air conditioners and The New York-based growth-equity investment firm, Tau Investment
refrigerators has considerably escalated as the city dwellers have Management, has initiated a venture worth USD 200 million in
been experiencing steaming heat of summer this year. One of the Bangladesh and buys minority ownership of some the large textile
renowned electronic products selling companies in Bangladesh companies of the country.
suggested that in order to meet the growing demand, it requires
producing 700 air conditioners each day. Formerly it produced 200 The investment has been made with an intent to make the companies
pieces daily. Earlier, the company had set a target to sell around
compliant to international standards and improve the value-chain
30,000 air conditioners this year, and it has already sold 15,000 air
of the companies by upgrading supply chain, suggested Tau. The
conditioners by April, 2014.
company claimed to have been investing in a number of companies
Markets analysts theorized that the city dwellers continue to buy the air in order to assist them in becoming stronger strategic suppliers as a
conditioners despite the all-time high prices of the product. As a result result of which incremental revenues are expected to be generated
with the rise in sales of home appliances, the stocks of air conditioners from them. The USD 200 million funds invested in Bangladesh is a
of the stores are being exhausted. Meanwhile, the local producers of portion of the Tau Transformation Fund which targets the textile and
such products have already increased their manpower, raw materials apparel manufacturers in emerging markets and change the global
and equipment which are to be used in production process. supply chain.
Default loans grew by BDT 7,589 crore in 3 months l

The first three months of the current year saw rise in default loans
by BDT 7,589.15 crore. According to the central bank, such a growth
in the default loans was incurred as the loan defaulters, who were
allowed to reschedule their loans turned into default clients all over
again. The Bangladesh Bank data suggested that the default loans of
the banking sector, which were BDT 40,583.01 crore as of December
2013 inclined to be at BDT 48,172.16 crore as of March 31, 2014. On
the other hand, classified loans held by the banks surged by 23.1%
they increased from being at BDT 46,075.86 crore in December 2013
to be at 56,720.10 crore in March 2014.
The central bank, on December 23, 2014, had relaxed the rescheduling
policy for six months for all kinds of loans of the businesses which
were adversely affected by political unrest. Under the relaxed policy
the scheduled banks regularized loans worth BDT 14,765 crore.
However, many of the default clients who availed the rescheduling
benefit did not pay the down payments in line with the conditions
of rescheduling. The central bank cited this as the major reason for
which the default loans grew by such margin. Source: Bangladesh Bank
CEMS organizes two of the biggest medical expositions in the country l

Conference and Exhibition Management Services Limited (CEMS) Bangladesh, an exhibition and conference service company, have
organized two international expositions showcasing the medical and healthcare industry of the country at the Bangabandhu International
Conference Centre.
Various equipment, devices and machineries for medical professionals, doctors and surgeons were displayed in the event. The two medical
expositions, namely Meditex Expo and the Pharma Expo, are the country’s two of the biggest exhibitions on medical and surgical instruments
for the medical professionals. 70 participated from 24 different countries around the world opened up more than 100 stalls in the event.
Growing need is there for new medical and hospital equipment to support the steady growth of medical and health care sector in Bangladesh
and such exhibitions certainly would help the cause, theorized ministry of health and family welfare.
15
16
17
REGULATORY NEWS
Bangladesh Bank provides refinancing scheme for marginalized farmers l
With intent to provide credit on easy terms to landless and take a maximum amount of BDT 50,000 as loan at interest rate of
marginalized farmers, the central bank has formed a BDT 2,000 crore 12% from the banks and the banks would borrow the money at 5%
revolving refinance scheme. To this end, Bangladesh Bank has issued from Bangladesh Bank under the scheme. The BB circular also points
a circular which stated that the small traders and low income earners
out that the distributor bank would be solely responsible for the
who were affected by natural disasters can avail the loan facility.
recovery of the loan and only the farmers who possess a total land
In order to get the loan, the borrowers have to open up a bank of 2.47 acres less would be able to enjoy the loan facility under the
account with BDT 10 with initial deposit. A certain borrower can revolving scheme.
Central bank’s refinance scheme benefits 10,000 women entrepreneurs l

A total of 10,000 women entrepreneurs have been lent BDT 778 crore under the refinance scheme of the central bank. Out of this amount, last
year, a sum of BDT 395 crore has been provided to 3,317 new women entrepreneurs who make 5% of the total new SME borrowers, suggested
Bangladesh Bank.
The central bank theorized that the women should be given necessary supports and financial access in order to ensure optimum utilization of
the skills and ideas of the women, who nearly construct 50% of country’s population. In order to generate jobs and promote inclusive economic
development, the central bank considers Small and Medium Enterprises (SMEs) as a potential lifeline and in such scenario promoting women
entrepreneurship has become one of the major policy interventions of Bangladesh Bank.
11 manufactured products to receive policy supports and cash incentives l

In order to boost the export earnings of the country, the in accordance with the international standards. After a series of
government has decided to provide policy supports and cash meetings with the stakeholders, the selected sectors have been
incentives to products from 11 different sectors. These 11 sectors chosen products from which are in high demand in Europe, America
are pharmaceuticals, ship-building, furniture, Poppadum (snack and other parts of the world.
item), Information and communications technology (ICT), electrical
home appliances, frozen foods, electrical home appliances, printed
The ministry also claimed that new markets and commercial wings
and packaging materials, home textile and jute and jute goods. The
would soon be opened in five countries, namely- Italy, Saudi Arabia,
ministry of commerce suggested that the cash incentives would be
Uzbekistan, India and Poland. With such initiatives the government
given to the production of the products from these 11 sectors in
order to boost the export earnings. has shown its intent of being confined to exporting to certain
regions of the world. According to Export Promotion Bureau (EPB),
Additionally, necessary initiatives would be taken in order to Bangladesh exported 80% of exports to Canada, United States, North
help boost productivity and maintain quality and compliance America, Japan and European Union (EU).
Bangladesh Bank to initiate BDT 1000 crore of SME refinance

and pre-finance scheme l
In an attempt to boost the SME sector of the country, the central clients at 10% interest rate. The central bank would distribute the
bank has decided to introduce four new refinance and pre-finance fund through both banks and non-government organizations
schemes of worth BDT 1,000 crore. Funds for the schemes would (NGOs). However, the borrowers would have to pay 12% interest
be attained from organizations such as World Bank (WB), Asian rate if the loan is received from the NGOs.
Development Bank (ADB) and European Union (EU).
Bangladesh Bank suggested that it would be able to train up
After receiving the fund from the sources at 0.75% interest rate, it around 10 lac entrepreneurs and bankers all over the country
would be disbursed by the central bank to the scheduled banks under this scheme, and create awareness of the SME business
at 5% interest rate; the scheduled banks in turn would lend their among them.
18
Banks and PSPs to preserve electronic transaction records for 12 years l

The central bank, by issuing fresh regulations for Electronic Fund Transaction systems under EFT
Transfer-2014, has urged all the scheduled banks and payment
1 Point of Sale terminals
service providers (PSPs) to keep and preserve the records of the
2 Automated Teller Machines
electronic fund transfer (EFT)-related transactions for 12 years.
Bangladesh Bank believes that unexpected glitches and errors can 3 Kiosks or self-service terminals
be ironed out if the banks and PSPs preserve the records of EFT 4 Internet and other communication channels
transactions for 12 years. Additionally, the initiative would also help 5 Telephonic instruments including mobile devices
in unearthing money laundering and other financial crimes through 6 Credit and debit cards
the transaction systems. 7 Card-based and network-based stored value products
8 Electronic entries initiated by banks or payment service
The BB circular also stated that the banks and the PSPs have to settle
providers
the EFT transactions related complaints of the clients within three
9 Partly electronic or non-electronic payment instructions
days and such organizations have to keep records of the complaints
and their resolutions for five years. Source- Bangladesh Bank
Ministry of Textile and Jute to regulate textile sector l

The regulatory authority of the country’s textile sector has been placed with the textile department of Ministry of Textiles and Jute. The sector
was previously regulated by the Board of Investment (BoI). The decision was taken at a cabinet meeting which amended the provision of the
Industrial Policy 1991 which puts the textile sector under the BoI authority and stated that the textile department of the ministry of Textile
and Jute would oversee the regulatory issues of the sector. Textile sector was put under the BoI control back in October 1992.
According to the existing Industrial Policy, the Bangladesh Export Processing Zone Authority (BEPZA) regulates and controls the export
processing zones and Bangladesh Small and Cottage Industries Corporation (BSCIC) regulates the small and cottage businesses of the country.
Central bank raises foreign currency limit for students l

Student now can carry more money to foreign lands as the central bank has increased the limit which they can carry from USD 200 to
USD 500. Bangladesh Bank has issued a circular, in this regard, to all the authorized dealers of branches of all scheduled banks stating that
the students can carry USD 500 to all foreign tours or in case the student studies in a foreign educational institution. The previous foreign
currency carrying limit for the students of USD 200 was set back in 2009.
19
MARKET ROUNDUP
Currency Market Roundup

May, 2014
Money Market l
The Bangladesh interbank call money rate was around 5.50-6.00% on May 28, 2014.
Foreign Exchange Market l

Local: The USD/BDT interbank rate remained stable on May 28,2014. Trading volume was also fairly liquid.
International: Against a basket of major currencies, the USD held in almost an eight week peak on May 28, 2014. EUR was traded at USD
1.3635 and USD slightly inclined against Yen to stand as 102.01 Yen. The Australian dollar was traded at USD 0.9278 which was a one week
highafter a sharp fall of USD 94 cents in this month.
Treasury Bill/Bond Auction Information l

Auction Date Tenure & Name of the Securities Sale Value (in BDT mn) Weighted Average Yield (%)
20/05/2014 30-day BB Bill 4644.567 7.05
19/05/2014 91 days T.Bill 10810.139 7.26
19/05/2014 182 days T.Bill 8390.329 7.74
19/05/2015 364 days T.Bill 8359.56 8.47
07/05/2014 2 yr T.Bond 5500 9.27
14/05/2014 5yr T.Bond 7000 10.66
21/05/2014 10yr T.Bond 5500 11.75
23/04/2014 15yr T.Bond 3500 12.10
23/04/2014 20yr T.Bond 3000 12.24
* Sale value not applicable, Face Value used. Source: Bangladesh Bank
Financial Sector Prices l

The spread between weighted average lending and deposit rates declined slightly to 5.14 % in April, 2014 from 5.15 % in March, 2014.
The weighted average call money rate in the inter-bank market went down from 7.35 recent to 6.50 % in May 2014.
Bangladesh Bank has changed repo and reverse repo rate at 7.25% and 5.25% respectively, following a declining revision by 50 basis point
effective from February 1, 2013.
Exchange and Forward Rates l (As on May 28, 2014)

Major Currency Exchange Rates Major Currency Exchange Rates Exchange Rate of Some Currencies
BC Sell TT Buy BC Sell TT Buy
Currency Currency Currency Per BDT per
BDT BDT BDT BDT Currency
USD Currency
USD 78.00 77.00 CAD 74.00 70.45
EUR 107.13 103.14 HKD 10.17 9.84 INR 59.13 1.31
GBP 132.30 128.28 SGD 62.88 59.89 PKR 98.65 0.79
AUD 74.32 70.77 AED 21.41 20.79 LKR 130.38 0.59
JPY 0.79 0.75 SAR 21.08 20.42 THB 32.67 2.37
CHF 88.58 84.95 DKK 14.35 13.81 MYR 3.22 24.06
SEK 11.99 11.44 KWD 278.59 266.45 Source: Standard Chartered Bank.
20
Commodity Market Roundup

Global food price on the decline l
The global food index in April 2014 declined by an averaged 209.3 for extended season in New Zealand and a great begin to the dairy-
points which was down by 3.5 points or 1.6 % below from March year in the northern-hemisphere.
2014 at, and 7.6 point lower than previous year. A month ago decline
was generally created by a sharp drop of dairy costs, in spite of the Meat Price averaged 185.8 points in April 2014, 0.8 points, or 0.4 %,
fact that sugar and vegetable oil additionally fell. Alternatively, grains above March 2014. The main driver was increasing pig meat price.
and meat costs flattened a little bit. In addition, due to dry weather conditions affecting production in
Australia and the United States, bovine meat prices are in its historic
Cereal Price Index averaged 206.9 points in April, which is only 1 point high. On the contrary, prices of poultry and ovine meat were in stable.
or 0.5 % above from March yet 24 points or 10.3 % below than April
2013. Weather conditions improvement in the United States and little Sugar price decreased compared to March value and stood at 249.9
effect on the Ukraine’s pace of grain shipments played a role here. points in April 2014, 4.1 points, or 1.6 % below. A great production in
Rice prices had a tendency to weaken in the different markets, except the main producing regions, including Thailand, India, and Australia,
for aromatic rice, where it stayed stable. Vegetable Oil Price Index Price of sugar declined as it became available. Dry climate in most
averaged 199 points in April 2014, down 6 points or 2.8 % from March producing countries helped in production boost.
2014. Malaysia’s exports have been hit by the constant strength of the
country’s currency. On the other hand, Soybean oil prices appreciated FAO Food Price Index
slightly because of tightness in global soybean supplies.
Price of oil & fats decremented by 199 points in April, down 6

points (or 2.8 percent) from March. The slide in the index is driven
by palm oil, whose values dropped following reports of lower than
anticipated import demand, most notably from the European Union.
Furthermore, Malaysia’s exports have been hit by the persistent
strength of the country’s currency. Soybean oil prices, on the other
hand, appreciated slightly as the market responded to the lingering
tightness in global soybean supplies.
Dairy products saw a rapid fall of 17 points, or 6.3 %, over March 2014
and averaged at 251.5 points in April 2014. The demand for all dairy
products has been affected by reduced purchase by China and the
Russian Federation. In addition, supply of all daily products increased Source: Food and Agricultural Organization
International Commodity Prices l

Commodity Unit Price May 19, 2014 (USD/unit) Price April 30, 2014 (USD/unit) Change +/(-)
Crude Oil Barrel 102.61 91.00 0.13
Gold Ounce 1302.00 1292.00 0.01
Silver Ounce 19.55 19.28 0.01
Nickel Tonne 19785.00 18200.00 0.09
Tin Tonne 23555.00 23175.00 0.02
Lead Tonne 2121.00 2088.50 0.02
Aluminium Tonne 1724.50 1769.50 -0.03
Zinc Tonne 2085.00 2054.50 0.01
Copper Tonne 7009.00 6724.00 0.04
Source: LBMA; Worldal; WTRG.
21
INTERNATIONAL
Apple buys Beats for USD 3bn l
Apple Inc, the California based multinational corporation, has bought Dre would join Apple. Apple is acquiring the two companies for a
Beats Electronics and Beats Music for about USD 3 bn. This marks total of USD 3 bn, consisting of a purchase price of approximately
Apple’s biggest acquisition till date for a company that manufactures USD 2.6 bn and approximately USD 400 mn that will vest over time.
headphones and operates a fledgling subscription music service. Beats Electronics which makes the popular Beats headphones,
speakers and audio software hopes that the acquisition help it in
As part of the acquisition, Beats co-founders Jimmy Iovine and Dr. catching up with the fast-growing music industry.
Finger vein ID soon to substitute ATM cards l

A number of hi-tech Automated Teller Machines (ATMs) around the world have recently introduced a new feature called Finger vein ID which
is anticipated to replace the ATM cards. Via Finger vein ID, bank account holders can simply press their finger on an infra-red reader which
would recognize them by their unique pattern of the veins on their hands.
The particular technology was first developed in Japan and since then Finger vein ID for money withdrawal has become a common
phenomenon in the country. Recently, Poland has become the first country in European continent which has introduced the technology in
the ATMs.
The Finger vein ID technology was introduced by Japanese company, Hitachi. Under this technology, the finger of the user effectively acts
like a chip on a conventional bank card as the infra-red device detects the unique vein pattern just under the skin surface of a hand or a
finger. Experts claim that the finger vein ID system is almost impossible to forge as it requires the finger of a living person for the purpose of
authentication. Such technology would also eliminate risk of withdrawal of money by non-accountholders using stolen ATM cards.
International Economic Forecast

Year on year percentage GDP CPI
change
2013 2014 2015 2013 2014 2015
Global (PPP Weight) 3.00% 3.40% 3.90% 4.00% 3.90% 3.90%
Advanced Economies 1.40% 2.10% 2.70% 1.30% 1.50% 1.50%
Euro Zone -40.00% 1.30% 2.10% 1.40% 80.00% 1.40%
Developing Economies 4.60% 4.70% 5.10% 6.60% 6.20% 6.40%
Forecast as of March 2014

Source: Wells Fargo Securities, LLC
22
Insight Analysis l
Global business barometer
Executives remain optimistic about the outlook for business,

according to the latest ECONOMIST/FT survey of over 1,500
senior managers from 114 countries (updated May 15th 2014).
The balance of respondents who expect the climate for business
to get better over those who think it will worsen has dropped 10
percentage points to +32, but remains overwhelmingly positive.
Overall, 44% of executives reckon conditions will improve in
the next six months and only 12% think they will deteriorate.
Over a third of respondents believe the euro zone will fall into
deflation this year. A similar proportion (39%) believe China will
experience a debt crisis this year.
Source: The Economist/FT Survey
International Market Movement l

% Change on
Markets Index Dec 31st Dec 31st, 2013
One Week
In Local currency In USD
United States (DJIA) 16614.0 0.6 0.2 0.2
United States (S&P 500) 1888.5 0.5 2.2 2.2
United States (NAScomp) 4100.6 0.8 -1.8 -1.8
China (SSEA) 2144.1 1.9 -3.2 -5.9
Japan (Nikkei 225) 14405.8 2.7 -11.6 -6.9
Britain (FTSE 100) 6878.5 1.2 1.9 3.2
Canada (S&P TSX) 14673.7 0.1 7.7 5.0
Germany (DAX) 9754.4 2.4 2.1 1.6
Hong Kong (Hang Seng) 22582.8 3.8 -3.1 -3.1
India ( BSE) 23815.1 6.7 12.5 16.4
Pakistan (KSE) 28528.2 0.7 12.9 20.4
Singapore (STI) 3259.1 0.7 2.9 3.9
Source: The Economist.
Selected Economic & Financial Indicators l

% change on year-on-year
Global domestic product Consumer prices Current account balance Interest rates,
Unemployment
Country Latest 12 % of GDP % 10-year gov’t
Latest qtr 2014 latest 2014 rate, %
months, $bn 2013 bonds, latest
United States 2.3 0.1 2.6 1.5 1.7 6.3 -379.3 -2.2 2.54
China 7.4 5.7 7.3 1.8 2.8 4.1 188.6 1.7 4.03
Japan 3.0 5.9 1.2 1.6 2.6 3.6 8.9 0.4 0.60
Britain 3.1 3.2 2.9 1.6 1.8 6.8 -111.7 -3.4 2.80
Canada 2.7 2.9 2.3 1.5 1.5 6.9 -58.9 -2.9 2.29
France 0.8 0.1 0.9 0.7 1.0 10.4 -32.0 -1.7 1.81
Germany 2.3 3.3 1.8 1.3 1.3 6.7 277.9 6.9 1.37
Russia 2.0 0 0.5 7.3 6.0 5.4 36.1 1.3 9.07
Hong Kong 3.0 4.4 3.4 3.9 3.6 3.1 5.6 2.9 2.09
India 4.7 3.2 6.0 8.6 8.0 9.9 -49.2 -2.6 8.79
Singapore 5.1 0.1 4.2 1.2 2.2 2.1 54.4 19.4 2.30
Brazil 1.9 2.8 1.8 6.3 6.2 5.0 -81.6 -3.6 12.4
Mexico 0.7 0.7 3.0 3.5 4.3 5.3 -22.3 -1.5 7.75
*% change on previous quarter, annual rate. Source: The Economist.
** The Economist poll or Economist Intelligent Unit estimate/forecast.
23
MONTH IN REARVIEW
Business-firm Specific l
Green Delta Insurance Company Ltd. has brought an insurance product in the market which is exclusively aimed at catering the country’s
women population. The product tilted “Nibedita” insures the women against accidental loss of house holdings, death during child
births and traumas like robbery and rape. The product has been made affordable for all, as the lowest monthly premium of BDT 580 has
been charged for the insurance policy. The company claimed that it is focused on empowering the women in the country by creating a
platform for growth for the insurance industry of the country.
After opening up its first overseas showroom in Sydney in August last year, the furniture maker Hatil Complex has opened up its second
international outlet in Toronto, Canada. The 6,000 square feet, single-branded showroom was inaugurated on May 10,2014 at 1261
Kennedy Road, Toronto. Hatil suggest the showroom would be operated by non-resident Bangladeshis. There is huge potential for
furniture exports in Canada as the Bangladeshi community in Canada is substantial and also because price of wooden furniture is high
in Canada which makes low-priced Bangladeshi products attractive. The company had started to export from February, 2013 and has
shipped a sum of BDT 50 crore furniture, till date. Hatil suggested the company is planning to open up new outlets in North American
and European region.
Country’s largest electronics and home appliance retail chain, Singer Bangladesh, has launched Western Union money transfer facility
in collaboration with Western Union Company and Bank Asia. The service would enable people to transfer money from more than 200
countries across the world and collect from any singer outlets which are distributed in the country. Money can be collected until 8 pm
which surpasses the normal banking hours. 371 Singer Mega and Singer outlets would provide the service.
One of the leading telecom operators, Airtel has unveiled its online portal in order to serve its customers’ needs which can be accessed
from anywhere and at any time. The virtual platform in the name of ‘Airtel Online Experience Centre’ is a three dimensional animated
online portal which would provide some of the unique opportunities in order to access self-care services over internet and digital space.
Airtel claims the portal to be intuitive which would facilitate the company in creating awareness and enhance the knowledge of the
customers via visual demonstrations. Such virtual platform is also the first its kind in the country’s telecommunication industry.
Management Change l
Banks, Fis and Other Organizations
Name Position Organization
AKM Rahmat Ullah Secretary Institute of Chartered Accountants of Bangladesh
Golam Hafiz Ahmed Managing Director & Chief Executive NCC Bank
Azam J Chowdhury Chairman Prime Bank
Fazlus Sobhan Managing Director BASIC Bank
24
IDLC NEWS
IDLC Investments to Act as Issue Manager for the IPO of Impress-Newtex
Composite Textiles Limited l
Impress-Newtex Composite Textiles Limited (INCTL) has recently signed an agreement with IDLC Investments Limited to raise capital through
Initial Public Offering (IPO). IDLC Investments Limited will act as Manager to the Issue for the IPO.
INCTL is a flagship company of Impress Group, a reputed and diversified group of companies having over 30 years of experience in ready-made
garments with a proven track record of identifying business opportunities in diversified sectors. The company, established in 1995, is mainly
engaged in producing gray knit fabric, dyeing & finishing and export of finished fabrics to 100% export oriented knit garments industries.
Meer Sajed-ul-Basher, Group Chief Financial Officer, Impress-Newtex Composite Textiles Limited and Md. Moniruzzaman, Managing Director,
IDLC Investments Limited signed the contract. Reaz Ahmed Khan, Chairman and Md. Akram Khan, Managing Director of INCTL, Selim R. F.
Hussain, CEO & Managing Director of IDLC Finance, Rubayet-E-Ferdous, Chief Operating Officer, IDLC Investments and other high officials of
Impress and IDLC were also present on the occasion.
25
IDLC becomes exclusive Loan partner of Lamudi & Carmudi l
IDLC Finance Ltd., the largest multi-product financial institution of Recently a MOU signing ceremony was held at Lamudi & Carmudi
Bangladesh signed an exclusive partnership agreement with Lamudi. head office in Dhaka.Irteza A Khan, Head of Consumer Division, IDLC
com.bd & Carmudi.com.bd. Under this agreement IDLC will offer Finance Ltd, David Zwagemaker, Managing Director, lamudi.com.bd
exclusive loan facilities to the customers of lamudi.com.bd & carmudi. & Jakob Gillmann, Managing Director, Carmudi.com.bd were present
com.bd who will buy property & auto products from their website. at the signing ceremony.
IDLC CSR NEWS
Environmental Awareness Session in Viqarunnisa and

Shahid Anwar School l
In continuation of the environmental
awareness campaign across schools,
IDLC conducts one session at Viqarunnisa
School & College followed by two sessions
in Shahid Bir Uttam Lt. Anwar Girls’ School
and College .
The sessions, jointly conducted by LEADS

and IDLC and sponsored by IDLC, consist
of presentations and team-based activities
focusing on issues such as causes of
environmental pollution and wastage of
resources, and simple measures in everyday
lives to manage or mitigate those.
26
Certification of the 3rd Batch Trainees under the Skills Development Project l
IDLC has completed training of the 3rd batch under the skills their social and economic status, allows them to afford education
development project, jointly conducted with Fareast Knitting for their children, and contribute to family savings. Case studies
and Dyeing Industries Limited, ILO Bangladesh, Directorate of of some of these trainees have also been provided in the 2013
Technical Education, Gazipur Technical School and College, CARE Sustainability Report.
Bangladesh and Shiree. The 19 trainees of Batch 3 were provided
with completion certificates through a formal ceremony at Fareast Considering success of this model, the Directorate of Technical
Factory on May 20, 2014. Education of the Government of Bangladesh is now planning to
replicate similar model across five other districts, with support
The program, developing capacity of marginal women from North from IDLC.
Bengal and subsequently employing them as machine operators in
the RMG sector, has been running since June 1, 2013. Till date, we On the May 20 program, Mr. Selim R.F. Hussain, CEO and Managing
have completed training and arranged employment for 47 women Director, IDLC, and Mr. Asif Moyeen, Managing Director, Fareast,
in the first two batches. represented their respective organizations, along with other high
officials from the partner organizations. Mr. Kh. Md. Sufian Raji,
These women, who had little / no income, are now earning Taka Branch-in-Charge, IDLC-Gazipur Branch, was also present in the
7,000 – Taka 13,000 a month – which has significantly improved event along with his team.
A developed nation is
a prosperous nation.
At IDLC, we help you

contribute to this
process.
We are in the business

of financing happiness.
27
CAPITAL MARKET REVIEW

The month started with positivity in the initial week, but was However, as political vibes waned off a bit, and expectations
mostly depressive. While aftereffects of Q1 declarations stirred regarding upcoming national budget started taking over investor
up participation in the first week, following weeks were observed minds, the bourse signed a reversal from ongoing sloppy trend.
with depressing participation and continued weak sentiment. As Fueled primarily by large caps in the construction sector, DSEX
a result, market participants observed DSEX hitting below 4400, climbed back 70 points, ending at 4430 as May ended. Meanwhile,
alongside turnover retracting to a 7-month low. However, in the turnover also spiked in the final week of the month, averaging to
final week of the month, activity made a turnaround, with positive BDT 2545 mn.
impact on index. Hence, despite dropping 200 points within the
month, DSEX eventually closed at 4430. Turnover averaged to BDT Corporate activities were moderate in May. PHARMAID resumed
2975 mn, 36% lower than previous month. trade in the bourse on May 11. On the same day, CVOPRL made
sector and category change. HWAWELLTEX made debut in the
On the ground of lucrative prices from a 136 points shed off in bourse on May 14, dragging a significant portion of turnover on
last week of April, good Q1 earnings declaration by a number flipping. Meanwhile, WATACHEM was moved from OTC market
of scrips initiated a reversal in first week. However, with political to the main bourse, and absence of seller kept it untraded for 9
scenario getting cloudier, sentiment went on back foot, stopping sessions. During the month, BSEC approved IPO issuance of
the momentum. In this scenario, poor Q1 declarations by a few Ratanpur Steel Re-rolling Mills Limited (RSRM) and Non convertible
companies, particularly in the financial sector prompted another Coupon Bearing Subordinated Bond issuance of City bank Limited.
downtrend. As political volatility continued, sentiment stayed Meanwhile, directors of GQBALLPEN were fined for financial
passive, reducing turnover on a regular basis. Resultantly, DSEX misrepresentation. Alongside, BSEC sought to the ministry a one
dipped below 4400 psychological level on May 15, and touched year extension of existing 20% quota for affected small investors
month low of 4363 on May 20. Turnover erosion also continued, in all public issues. The regulator also approved new public issue
eventually putting daily turnover below BDT 2 Billion on May 20. rules during May.
Monthly Market Statistics l

Index Movement (May, 2014) Advance/Decline (May, 2014)
Index Point Change % Change YTD change
Advanced Declined Unchanged
DSEX 4,430.48 -136.38 -2.99% 8.31%
DS30 1,609.27 -62.66 -3.75% 9.25% All Category 96 186 8
DSES* 992.82 -25.38 -2.49% 5.48%
Top Ten Gainers’ List (May, 2014) Top Ten Losers’ List (May, 2014)
Top Ten Gainers 29-May-14 30-Apr-14 % Change Top Ten Losers 29-May-14 30-Apr-14 % Change
RAHIMAFOOD 58.00 40.30 44% RENATA* 877.50 1,240.00 -29%
SALVOCHEM 23.30 18.80 24% ISNLTD* 10.20 14.40 -29%
AL-HAJTEX 126.10 105.80 19% MBL1STMF* 6.00 7.90 -24%
LAFSURCEML 78.50 67.70 16% BAYLEASING* 26.70 34.30 -22%
FASFIN 17.50 15.40 14% GENNEXT* 14.80 19.00 -22%
ENVOYTEX 50.80 45.00 13% BDFINANCE* 13.10 16.60 -21%
MEGHNACEM 135.70 120.90 12% RECKITTBEN 1,032.70 1,306.30 -21%
LEGACYFOOT 26.70 23.80 12% LINDEBD 905.40 1,133.70 -20%
AMBEEPHA 321.90 287.20 12% SHAHJABANK* 11.30 14.10 -20%
CENTRALINS 26.50 23.70 12% SUMITPOWER* 30.30 37.10 -18%

*% change includes post record date effects
28
Top Ten by Value (May, 2014) Market Capitalization

USD in mn
Top Ten (Value) 29-May-14 30-Apr-14 % Change Value
GP 266.30 268.90 -0.97% 3,145
LAFSURCEML 78.50 67.70 15.95% 2,797
SQURPHARMA 270.00 281.70 -4.15% 2,060
MPETROLEUM 282.80 300.50 -5.89% 1,620
MATINSPINN 43.00 42.10 2.14% 1,551
HEIDELBCEM 522.80 590.10 -11.40% 1,527
OLYMPIC 229.30 240.30 -4.58% 1,268
EHL 62.00 58.60 5.80% 1,191
BSCCL 179.00 182.10 -1.70% 1,084
HWAWELLTEX* 41.00 - - 1,054
*% change includes post record date effects
DSE Turnover and DSEX BDT in mn
Lowest P/E and Lowest P/BV ratio
Lowest P/E Lowest Price/NAV
PRIMEBANK 4.91 PHPMF1 55%
FAMILYTEX 5.56 GREENDELMF 56%
EBL 5.69 1JANATAMF 57%
SIBL 5.72 POPULAR1MF 58%
UCBL 5.76 MBL1STMF 59%
NORTHRNINS 6.09 ABB1STMF 59%
KPCL 6.35 DBH1STMF 60%
PREMIERBAN - IFIC1STMF 60%
IFIC 6.55 LRGLOBMF1 60%
SOUTHEASTB 6.72 EBL1STMF 64%
Market Cap Class wise Stock Movement
Top Ten Market Capitalization (May, 2014)
Top Ten Mkt Cap BDT mn % Change
GP 358,597 -1.0%
BATBC 137,537 -4.2%
SQURPHARMA 130,548 -4.2%
LAFSURCEML 80,123 16.0%
TITASGAS 76,805 -1.8%
ICB 74,063 -4.8%
ISLAMIBANK 40,724 -7.2%
RENATA 36,550 -29.2%
MARICO 35,666 -11.0%
PADMAOIL 32,524 -5.9% Recent Corporate Declaration l
AGM Record
Market Statistics (May, 2014) Company name SD CD Rights
Date date
Market Stat Unit 29-May-14 30-Apr-14 % Change
Ambee Pharmaceuticals Ltd. 16.06.14 28.05.14 20% 15% -
Bn BDT 2,885 2,953 -2.31%
Mcap (All)
Bn USD 37 38 -2.31% CMC-Kamal Textile Mills Ltd. - 29.05.14 13% - -
Bn BDT 2,295 2,361 -2.78%
Mcap (Equity) Salvo Chemical Industry Limited 27.08.14 25.06.14 10% - -
Bn USD 30 30 -2.78%
Mn BDT 3,233 4,364 -25.91% Marico Bangladesh Ltd. 19.08.14 02.07.14 - 50% -
Turnover
Mn USD 42 56 -25.91% *SD = Stock Dividend **CD =Cash Dividend.
29
Sector Indicators (May, 2014) l

Sector Per-
Sectoral Indicators
formance
Sector Value in BDT mn % of Total Trade Industry Cap Forward PE Trailing PE Price/BV May
Pharma 451.29 15.17% 8.04% 28.43 23.82 10.50 -5.47%
Textile 379.70 12.76% 1.33% n/a - 0.78 -1.44%
Bank 318.71 10.71% 17.19% 20.44 25.69 10.17 -3.72%
Engineering 299.09 10.05% 6.82% 29.25 30.33 5.02 1.21%
Fuel & Power 299.00 10.05% 13.21% 22.87 24.55 6.06 -5.62%
Cement 277.84 9.34% 5.97% 26.89 18.99 1.68 4.79%
Tele 222.55 7.48% 15.99% 12.62 8.22 1.03 -1.01%
Food 187.58 6.31% 2.35% 21.27 28.93 3.90 -3.83%
NBFI 110.60 3.72% 12.50% 16.49 11.26 7.43 -5.33%
Mutual Fund 76.20 2.56% 2.32% 13.16 16.79 2.15 n/a
Miscellaneous 74.00 2.49% 2.80% n/a - n/a -5.46%
Service 68.19 2.29% 0.73% 21.64 22.63 3.78 5.51%
Life Insurance 66.24 2.23% 4.27% 26.52 19.04 3.22 -6.36%
Non Life Insurance 44.21 1.49% 3.69% 16.28 13.75 2.80 2.49%
Tannery 41.08 1.38% 0.85% 20.98 20.11 7.61 -13.34%
Travel & Leisure 23.71 0.80% 0.18% 19.19 15.05 1.26 0.73%
IT 19.99 0.67% 0.15% n/a - n/a -2.81%
Ceramic 12.65 0.43% 1.14% 21.06 15.03 1.07 -1.47%
Jute 1.18 0.04% 0.02% - - 6.06 -6.61%
Paper & Printing 0.50 0.02% 0.02% - - 0.76 6.54%
Corporate Bond 0.32 0.01% 0.45% 23.08 23.13 3.29 n/a
2,974.61 19.67 19.43 5.43
Weekly (May 18 - 22, 2014) Mutual Funds Update l

Following table exhibits the Open-End Mutual Funds (7) in order of YTD change in NAV.
Sl Initial Fund Re-Purchase Selling Effective % Change in NAV YTD Change Fund
Name of Mutual Funds NAV
No Size (BDT mn) Price Price Date* from last week in NAV Manager
1 MTB Unit Fund 1000 11.00 11.30 25-May-14 11.39 -0.52% 6.75% ACAML
2 Bangladesh Fund 50000 108.00 111.00 25-May-14 107.63 -0.21% 5.81% ICB AMCL
3 Shandhani Life Unit Fund 500 9.99 10.29 21-May-14 11.06 -0.36% 4.93% Alif AMCL
4 ICB AMCL Unit Fund 100 264.00 269.00 25-May-14 263.78 -0.04% 3.09% ICB AMCL
5 ICB AMCL Pension Holders' Unit Fund 100 218.00 223.00 25-May-14 217.71 -0.05% 0.00% ICB AMCL
ICB AMCL Converted First Unit
6 500 10.40 10.70 25-May-14 10.40 - - ICB AMCL
Fund***
7 Prime Financial First Unit Fund** 200 99.00 102.00 28-May-14 105.06 -0.23% -3.92% PAMC
* For ICB AMCL and ACAML, effective date is the date from which repurchase price, selling price and NAV are applicable.
For PAMC and Alif AMCL, effective date is the date until which repurchase price, selling price and NAV are applicable.
** Sale and repurchase of Prime Financial First Unit Fund remains closed each Thursday.
*** The fund is initiated in February, 2014
Weekly Change (%)of NAV of Closed-end Mutual Funds in 2014 l

Following table exhibits the Closed-End Mutual Funds (41) in order of YTD change in NAV based on latest NAV/unit as on May 22, 2014. On
the basis of Price/NAV, 36 Mutual Funds out of 41 were traded below their respective NAV. PHPMF1 and GREENDELMF had the lowest Price/
NAV and were traded at 45% and 43% discount, respectively. 1STPRIMFMF and GRAMEEN1 were traded at higher multiple than others, 85%
and 35% premium, respectively. Last week, NAV of 37 Mutual Funds decreased, 3 Mutual Funds increased and 1 remained unchanged. On the
other hand, price of 20 Mutual Funds decreased, 8 increased while 13 remained unchanged. On an average, price of Mutual Funds decreased
by 0.95% while NAV decreased by 1.6% from previous week, against a 0.74% decrease in DSEX over the week. In terms of price changes, 22
Mutual Funds outperformed DSEX over last week.
30
%Change of %Change in
Price (May Latest NAV/ Price/ YTD Change Performance against "Redemption "Fund
DSE Code Name of Mutual Funds Price from NAV from last
22, 2014) unit NAV in NAV DSEX (YTD) Year" Manager"
last week week
3RDICB 3rd ICB M.F. 240.0 324.8 74% -3.42% -3.77% 45.99% Outperformed 2014 ICB
5THICB 5th ICB M.F. 189.6 238.2 80% -2.32% -5.50% 24.40% Outperformed 2014 ICB
2NDICB 2nd ICB M.F. 270.0 305.5 88% -1.85% 0.00% 24.04% Outperformed 2014 ICB
4THICB 4th ICB M.F. 218.5 281.7 78% -1.84% -4.23% 21.39% Outperformed 2014 ICB
8THICB 8th ICB M.F. 69.6 74.8 93% 2.05% -4.82% 15.91% Outperformed 2014 ICB
1STICB 1st ICB M.F. 980.0 78% -1.02% -17.28% 13.72% Outperformed 2014 ICB
1,258.7
1JANATAMF First Janata Bank Mutual Fund 6.5 11.0 59% -2.99% -0.63% 11.00% Outperformed 2020 RACE
IFILISLMF1IFIL Islamic Mutual Fund-1 6.8 9.8 69% -1.45% -1.31% 9.34% Outperformed 2019 ICB AMCL
GRAMEENS2 Grameen One : Scheme Two 16.4 18.7 88% -1.20% -1.06% 8.98% Outperformed 2023 AIMS
PHPMF1 PHP First Mutual Fund 5.8 10.5 55% -1.69% -1.23% 8.39% Outperformed 2020 RACE
POPULAR1MF Popular Life First Mutual Fund 6.6 11.2 59% 0.00% -0.54% 8.36% Outperformed 2020 RACE
ABB1STMF AB Bank 1ST Mutual Fund 7.2 11.9 61% 0.00% -0.75% 7.32% Outperformed 2022 RACE
GRAMEEN1 Grameen Mutual Fund One 45.2 33.5 135% 0.44% -1.30% 7.26% Outperformed 2015 AIMS
IFIC1STMF IFIC Bank 1st Mutual Fund 6.5 10.9 60% -2.99% -0.09% 6.97% Outperformed 2019 RACE
NLI1STMF NLI First Mutual Fund 9.2 12.4 74% 2.22% 0.08% 6.91% Outperformed 2022 VIPB
SEBL1STMF Southeast Bank 1st Mutual Fund 8.6 12.0 72% 0.00% -0.08% 6.86% Outperformed 2021 VIPB
TRUSTB1MF Trust Bank 1st Mutual Fund 7.4 10.9 68% 0.00% -0.64% 6.24% Outperformed 2019 RACE
EBLNRBMF EBL NRB MUTUAL FUND 7.0 10.8 65% 0.00% -1.10% 5.15% Outperformed 2021 RACE
First Bangladesh Fixed Income
FBFIF 8.4 11.1 76% -9.68% -0.27% 4.91% Outperformed 2022 RACE
Fund
GREENDELMF Green Delta Mutual Fund 5.6 9.9 57% 0.00% -0.30% 4.67% Outperformed 2020 LR Global
AIBL1STIMF AIBL 1st Islamic Mutual Fund 7.5 10.5 71% 0.00% -0.76% 4.59% Outperformed 2021 LR Global
AIMS1STMF Aims 1st M.F. 41.6 49.6 84% -0.24% -0.96% 4.46% Outperformed 2015 AIMS
EBL1STMF EBL First Mutual Fund 6.6 10.2 65% 0.00% 0.49% 3.78% Outperformed 2019 RACE
NCCBLMF1 NCC Bank Mutual Fund 1 7.1 10.5 67% -1.39% -0.57% 3.64% Outperformed 2022 LR Global
MBL1STMF MBL 1st Mutual Fund 6.3 10.2 62% -4.55% -0.10% 3.43% Outperformed 2021 LR Global
ICB3RDNRB ICB AMCL Third NRB Mutual Fund 5.1 7.5 68% 0.00% -0.53% 3.15% Outperformed 2019 ICB AMCL
EXIM1STMF EXIM Bank 1st Mutual Fund 7.6 11.3 67% 1.33% 0.09% 3.10% Outperformed 2023 RACE
ICB AMCL Sonali Bank Limited 1st
ICBSONALI1 8.7 10.3 84% -1.14% -0.39% 2.99% Outperformed 2023 ICB AMCL
Mutual Fund
RELIANCE1 RELIANCE ONE MUTUAL FUND 9.1 12.4 74% 0.00% -0.32% 2.83% Outperformed 2021 AIMS
Prime Bank 1st ICB AMCL Mutual
PRIME1ICBA 5.3 7.6 69% 1.92% -0.78% 2.69% Underperformed 2019 ICB AMCL
Fund
PF1STMF Phoenix Finance 1st Mutual Fund 5.4 7.3 74% -1.82% -0.54% 2.67% Underperformed 2019 ICB AMCL
LR Global Bangladesh Mutual Fund
LRGLOBMF1 6.7 10.8 62% 0.00% -1.01% 2.46% Underperformed 2021 LR Global
One
DBH1STMF DBH First Mutual Fund 6.4 10.1 64% 0.00% -0.49% 2.13% Underperformed 2019 LR Global
ICB Employees Provident MF 1:
ICBEPMF1S1 5.5 7.6 73% 0.00% -0.52% 2.02% Underperformed 2019 ICB AMCL
Scheme 1
ICBISLAMIC ICB AMCL Islamic Mutual Fund 20.0 16.9 118% -1.96% -0.88% -0.65% Underperformed 2014 ICB AMCL
ICBAMCL2ND ICB AMCL Second Mutual Fund 6.2 8.0 77% 1.64% -0.50% -1.47% Underperformed 2019 ICB AMCL
ICB2NDNRB ICB AMCL 2nd NRB Mutual Fund 10.0 10.7 94% -5.66% -1.02% -1.84% Underperformed 2018 ICB AMCL
ICB1STNRB ICB AMCL 1st NRB Mutual Fund 29.8 24.2 123% -3.87% -0.98% -3.43% Underperformed 2017 ICB AMCL
1STPRIMFMF Prime Finance First Mutual Fund 18.9 10.2 185% -1.05% -0.78% -10.41% Underperformed 2015 ICB AMCL
31
INVESTMENT INSIGHT: Lafarge Surma Cement Ltd.

Lafarge Surma Cement Limited (DSE: LAFSURCEML)
Current Price (5/29/2014) 78.50
Total Number of Share (mn) 1161.37
Free Float (%) 29.94%
Forward PE* – LAFSURCEML 36.30x
Trailing PE * – LAFSURCEML 36.86x
Forward PE – CEMENT 29.25x
Based on latest earning disclosure
1
Q1, 20142 Company Profile

Financials (BDT Mn) 2012 2013
(Unaudited) Lafarge Surma Cement Ltd. (DSE: LAFSURCEML) was incorporated
Revenue 10,640 11,330 2,672 in November, 1997 as a private limited company. Later in 2003, the
Gross Profit 4,189 4,703 1,013 company went public and got listed in both DSEX and CSE. The
Operating Profit 3,336 3,986 796 company is a unique cross border commercial venture spanning
between Bangladesh and neighboring India. It has two subsidiaries
Net Profit After Tax 1,853 2,546 628
named Lafarge Umium Mining Private Ltd. and Lafarge Mawshun
Total Asset 18,523 19,027 19,234 Minerals Private Ltd. The former operates its quarry in Meghalaya,
Total Equity 8,381 11,045 11,693 India and supplies the parent with limestone extracted from the
2
Year ends on December 31 quarry through a 17 km long cross border conveyor belt.
Q1, 2014
Growth (%) 2012 2013 Key Revenue Drivers & Company Insight
(unaudited)
LAFSURCEML is a manufacturer and marketer of cement and clinker
Revenue 74% 6% -4% primarily in the local market. The company has strong backward
Net Profit After Tax - 37% -10% linkage through its subsidiaries. Although, procuring from the
quarry in India was halted due to legal complexities, procurement
resumed in August, 2012. The company sources its chief raw material
Q1, 2014 limestone and produce clinker from it on its own. Merging with
Per Share (BDT) 2012 2013
(unaudited) continuing ride, capacity utilization rate was greater than 100% in
Restated EPS 1.60 2.19 0.54 last consecutive two years. Accordingly, revenue rose by 74% and
Book Value Per Share 7.22 9.51 10.07 6% respectively, in 2012 and 2013, riding on both increase in price
and volume sold.
Q1, 2014 Last year, the company signed a contract of outsourcing with Madina
Others (%) 2012 2013
(unaudited) Cement Ltd. and initiated a new brand of cement, “POWERCRETE”.
Gross Profit Margin 39% 42% 38% This has added capacity to the fleet of Lafarge. Besides, a recent
Operating Profit Margin 31% 35% 30% merger agreement was held between Lafarge of France and Holcim
of Switzerland.
Net Profit Margin 17% 22% 24%
ROA 10% 14% 3% Financial Performance
ROE 25% 26% 6% Despite political chaos in local area, LAFSURCEML passed a robust
Stock Dividend - - - year of 2013. Together with top line growth and margin improvement,
Cash Dividend - - - which is backed by full fledge backward support; NPAT showcased
Source: DSE; Quarterly & Annual Reports of LAFSUECEML and Research, 37% growth in 2013. Tight cost control mechanism and reduced
IDLC Investments Ltd. interest payment due to repayment of major debt led Operating
and NPAT margin to 35% and 22%, respectively. Besides, receipt of
Terminologies insurance claim of BDT 170.5 mn, against machine breakdown added
boost in company’s bottom line. But, in Q1, 2014, Revenue and NPAT
Free Float : % of total shares not owned by Sponsors/ Directors, and Govt. declined by 4% and 10%, respectively on YoY basis. In the meantime,
Forward PE: Based on Annualized Earnings of the latest declared quarter with its persistent improvement in NPAT, negative retained became
BDT -316.2 mn in Q1, 2014 which was BDT -2,789.9 mn in same time
Trailing PE: Based on Latest 12 Months Earnings
period of last year.
DISCLAIMER
This Document has been prepared and issued by IDLC Finance Limited on the basis of the public information available in the market, internally developed
data and other sources believed to be reliable. Whilst all reasonable care has been taken to ensure that the facts & information stated in the Document are
accurate as on the date mentioned herein. Neither IDLC Finance Limited nor any of its director, shareholder, and member of the management or employee
represents or warrants expressly or impliedly that the information or data of the sources used in the Document are genuine, accurate, complete, authentic
and correct. Moreover, none of the director, shareholder, and member of the management or employee in any way is responsible about the genuineness,
accuracy, completeness, authenticity and correctness of the contents of the sources that are publicly available to prepare the Document. It does not solicit
any action based on the materials contained herein and should not be construed as an offer or solicitation to buy sell or subscribe to any security. If any person
takes any action relying on this Document, shall be responsible solely by himself/herself/themselves for the consequences thereof and any claim or demand
for such consequences shall be rejected by IDLC Finance Limited or by any court of law.
32
34

Monthly Business Review

Transféré par

Informations du document

Copyright

Formats disponibles

Partager ce document

Partager ou intégrer le document

Options de partage

Avez-vous trouvé ce document utile ?

Ce contenu est-il inapproprié ?

Droits d'auteur :

Formats disponibles

Monthly Business Review

Transféré par

Droits d'auteur :

Formats disponibles

Volume 10 l Issue 05 l May 2014

All rights reserved. No part of this newsletter may be

The Leather Footwear Industry in Bangladesh:

Focus on the Footwear sector

One other major advantage that Bangladesh holds and its

Source: Export promotion Bureau

Analysis of export growth statistics

comparison to all other continents, by charging an average price

Source- The World Footwear Yearbook 2012

Asia persists on being the powerhouse of footwear industry in terms

Source- The World Footwear Yearbook 2012

Recent developments in China

“The leather industry of our country frequently faces

Bangladesh to meet up 15% of global cotton demand by 2022

The consumption of cotton consumption in Bangladesh would

Largest coal-based power project to be set up in Cox’s Bazar

Private sector credit slightly inclines

At the backdrop of political uncertainties, the private sector credit

Balance of payments sluggish in March

Even though, net other investment declined, higher portfolio

USD 60 million to be lent by World Bank for VAT reforms

Selected Economic Indicators

Item Period/As of Value/ bn Period/ As of Value/ bn +/(-)%

Foreign Exchange Reserve (USD) May'14 20.03 May'13 14.40 39.12%

Revenue Collection (BDT) March '14 108.27 March'13 101.83 6.32%

Source: May 2014, Selected Economic Indicators, Bangladesh Bank

Foreign investment in stocks for April registers highest amount in 12 months l

Source: Dhaka Stock Exchange

Import rise by 30.7% on year-on-year basis l

Source: Bangladesh Bank

Myanmar’s ban on timber export may hurt local market l

Category wise Export Import LC statistics

July-April July-April July - February, 2014 July -February, 2013

Cumulative investment in eight EPZs at the end

Cumulative employment in eight EPZs at the

Source: Bangladesh Export Promotion Zone Association

Default loans grew by BDT 7,589 crore in 3 months l

CEMS organizes two of the biggest medical expositions in the country l

Central bank’s refinance scheme benefits 10,000 women entrepreneurs l

11 manufactured products to receive policy supports and cash incentives l

Bangladesh Bank to initiate BDT 1000 crore of SME refinance

Banks and PSPs to preserve electronic transaction records for 12 years l

Ministry of Textile and Jute to regulate textile sector l

Central bank raises foreign currency limit for students l

Currency Market Roundup

Foreign Exchange Market l

Treasury Bill/Bond Auction Information l

Financial Sector Prices l

Exchange and Forward Rates l (As on May 28, 2014)

Commodity Market Roundup

Price of oil & fats decremented by 199 points in April, down 6

International Commodity Prices l

Crude Oil Barrel 102.61 91.00 0.13

Gold Ounce 1302.00 1292.00 0.01

Silver Ounce 19.55 19.28 0.01

Nickel Tonne 19785.00 18200.00 0.09

Tin Tonne 23555.00 23175.00 0.02

Lead Tonne 2121.00 2088.50 0.02

Aluminium Tonne 1724.50 1769.50 -0.03

Zinc Tonne 2085.00 2054.50 0.01

Copper Tonne 7009.00 6724.00 0.04

Source: LBMA; Worldal; WTRG.

Finger vein ID soon to substitute ATM cards l

International Economic Forecast