Business & Finance News

Thursday, July 29, 2004

Compiled by SDNP

Head Lines

First Islamic mutual fund on the cards
Fund awaits SEC approval

The asset management company of unbundled Investment Corporation of Bangladesh, ICB Asset Management Company Ltd, yesterday announced its plan to launch the first mutual fund based on Islamic principles.

Another unit fund for pensioners is also expected to be launched in local market early next month, said Khondker Md Iqbal, chief executive officer of ICB Asset Management Company.

"We have already applied to the Securities and Exchange Commission seeking permission for launching the two new products -- ICB AMCL Islamic Mutual Fund and ICB AMCL Pension Holders Unit Fund," the CEO said.

He was speaking at a press conference organised by ICB Asset Management Company at its office in Dhaka to announce dividends of the company's two existing funds -- ICB AMCL First Mutual Fund and ICB AMCL Unit Fund -- which were launched last year.

According to Iqbal, the Islamic mutual fund will be a close ended fund that will be governed by Islamic Shari'ah law. A five-member Shari'ah board comprising eminent Islamic scholars will advise in managing the fund worth Tk 10 crore.

Explaining the reason of launching the Islamic mutual fund, he said different studies reveal potentiality of such a fund, especially by investors who are reluctant to invest in the conventional products.

He also said there are about 1230 Islamic mutual funds in the US and over 200 in the Middle Eastern countries.

Regarding the Pension Holders Unit Fund, Iqbal said to ensure a minimum return on investment for the pensioners, a nine percent dividend has been guaranteed for the in next five years.

"Retired officials of government, semi-government, autonomous bodies and bank officials will be eligible for investing in the fund worth Tk10 crore open-ended fund," Iqbal said.

The minimum investment in the fund has been proposed at Tk 50,000 while the maximum ceiling at Tk 10 lakh, he added.

At the press conference, Iqbal also told reporters that the company has declared 12 percent dividend for ICB AMCL First Mutual Fund and 10 percent dividend against ICB AMCL Unit Fund.

Expressing satisfaction over performance of the funds launched last year, Iqbal said, "It's a good return on investment considering the life span of the funds which is only one year old."

Apart from funds issued by ICB Asset Management Company and the parent ICB, two other companies -- Bangladesh Shilpa Rin Sangstha (BSRS) and Asset and Investment Management Services (AIMS) of Bangladesh -- also operate similar funds in the market.

ICB Managing Director Md Ziaul Haque Khondker, ICB Asset Management Company Ltd Chairman Md Fayekuzzaman and ICB General Manager Md Jahangir Miah also spoke at the press conference.

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Cash incentive for farm products raised to 30pc

The government has increased cash incentive for export of agriculture products to 30 percent from 25 percent to encourage commercial farming and processing.

Bangladesh Bank (BB) yesterday in a circular informed all commercial banks about the decision, which has come to complement the government's recent measures to invigorate the backbone sector of the economy.

The government in this year's budget allocated a Tk 600 crore agriculture subsidy, which will support irrigation, seed and fertiliser requirements of farmers.

Earlier, the government waived interest on agricultural loan. Besides, considering the countrywide flooding, the government asked the banks to defer agriculture loan recovery drive until recession of floodwaters.

Finance and Planning Minister M Saifur Rahman earlier assured the exporters of reducing 20-25 percent airfare for agriculture products transported by Biman Bangladesh Airlines. But the assurance is yet to be fulfilled.

In another development, the central bank yesterday asked the nationalised commercial banks (NCBs) and specialised banks to inform it about their agriculture loan disbursement target by Sunday.

The central bank move came following the government's repeated promise of taking up massive post-flood rehabilitation programmes for agriculture sector which has been devastated by the raging flood.

The decision was taken at a meeting between the officials of agriculture loan department of the central bank and NCBs and specialised banks, which disburse about 95 percent of total agriculture loans.

According to preliminary estimate of the government, the flood may cause a loss of Tk 30,000 crore to Tk 40,000 crore, mostly in agriculture and infrastructure sectors.

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High-powered Chinese team arrives July 31

Dhaka, Beijing move to strengthen economic ties


The Bangladesh Observer

Bangladesh and China, two close friends bound by economic and other form of cooperation, are expected to further strengthen their ties when a high powered delegation arrives in Dhaka on July 31 to explore the possibilities of cultural, trade and communications interactions, reports BSS.

The team from China’s Yunnan province, whose geographical and other proximity with several neighbours of Beijing have uniquely placed it for multi-facet cooperation in the regional arena, will be led by province’s Vice-Governor Shao Qiwei.

The delegation that includes officials, private sector entrepreneurs and academics will spare no efforts for multi- dimensional links that covers a direct air route with provincial capital Kunming.

Since reform and opening began in the Communist China, the country has continuously expanded its capital market and as an emerging power of enormous economic prowess, its economic and trade relations with the outside world are on the increase and consequently China’s economic and social development are now an acknowledged remarkable feat.

Many of its provinces are bristling with touches of modern economic advancement and the Yunnan province is no exception. In fact, the importance of this province is particularly significant because of vast opportunities for being window and gateway of China to the Southeast and South Asia.

Capital Kunming is a beautiful city buzzing with presence of tourists in one hand and economic activities on the other .As a part of the federal government’s policy, Yunnan is becoming closer with several countries by opening up cooperation.

A direct air flight between this city and Dhaka or Chittagong should not take more than two hours but it takes more than 24 hours taking into account the hassles of connecting flight via Bangkok.

“It makes no sense when regional and sub-regional cooperation has become an essential ingredient of development among different nations for mutual benefits” Vice Governor Shao Qiwei told a group of visiting editors and senior journalists from Bangladesh recently.

Direct air links would help foster business and trade links, he said and stressed that central Chinese government encourages such close relations with neighbours.The delegation includes officials from China Eastern Airlines so that concrete talks take place in Dhaka on the issue of direct air service.

Yunnan has taken praiseworthy lead in the Bangladesh-China- India-Myanmar(BCIM) economic cooperation and sufficient progress has also been made towards the avowed objectives. This will benefit more than 405 million people of Bihar and northeast India, Myanmar, Bangladesh and of course Yunnan province.

With the rich natural resources and vast development potentiality, the area locates in the connecting belt of three huge markets of Middle East, Southeast Asia and South Asia, enjoying favourable geographical situation and important ecological position.

It is expected that Bangladesh will take full advantage of the opportunities both at bilateral and multilateral plan for both its own sake and regional cooperation.

The visit of the delegation from Yunnan is a step in the right direction for enhancing Sino-Bangladesh cooperation and also providing impetus to regional interactions. After all, Dhaka can not lag behind in an era of progress and development through interactions for mutual benefits.

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