LOCAL ECONOMY

 Textile Sector's Reduced Tax Benefits May End Soon

 May 19, 2025

• The government is considering phasing out reduced tax rates for the textile sector, aiming to align it with the standard corporate tax rate of 27.5%. This move is part of a broader effort to streamline tax structures and boost revenue.

• The National Board of Revenue (NBR) plans to maintain the prospective tax system through fiscal year 2027-28. This approach allows taxpayers to know applicable tax rates in advance, facilitating better financial planning and investment decisions. (Read more)

 Bangladesh cannot assume India's northeast is a captive market

 May 19, 2025

•  India has imposed restrictions on imports of ready-made garments and other goods from Bangladesh into its northeastern states. This move aims to ensure balanced trade relations and address concerns over market access

• Officials caution that Bangladesh should not consider India's northeast as a captive market for its exports, especially while limiting the region's access to Bangladeshi markets. The emphasis is on fostering mutual access and equitable trade practices. (Read more)

 Structural weaknesses, poor governance plague economic reform: Debapriya

 May 19, 2025

• Economist Debapriya Bhattacharya highlights that despite some economic stabilization, Bangladesh's reform efforts are stalled due to deep-rooted structural problems and poor governance. He emphasizes that without economic stability, other reforms cannot be sustainable.

• The FY26 budget process is criticized for lacking public engagement and inclusivity. Bhattacharya points out minimal dialogue outside Dhaka and limited inclusion of diverse groups, leading to concerns about coordination and transparency in economic policymaking. (Read more)

 Unemployment rises further in Oct-Dec 2024

 May 19, 2025

• Bangladesh's unemployment rate rose to 4.63% in the October–December 2024 quarter, up from 3.95% in the same period the previous year. This marks the highest rate in recent years, with an additional 330,000 people becoming jobless during this time.

• The labour force participation rate dropped to 48.41% in the October–December 2024 quarter, down from 50.27% a year earlier. This decline is primarily attributed to reduced participation of women in the workforce. (Read more)

 Only splitting the NBR may not help

 May 19, 2025

• Experts say breaking it up won’t fix deeper issues like outdated systems and lack of coordination.

• Improving tax policy, modernizing processes, and building skilled leadership are more important than only structural changes. (Read more)

Exchange rate of dollar rises slightly

May 19, 2025

• The US dollar's interbank rate rose to Tk 122.78, up from Tk 122.60, following Bangladesh Bank's move to a market-driven exchange rate system.

• Central bank officials report a stable foreign exchange market, attributing it to higher remittance and export earnings. Banks are selling dollars to importers at Tk 122.70 and buying from exporters at Tk 122.30–Tk 122.50. (Read more)

CA advises preparing ‘realistic’ budget

May 19, 2025

• The Chartered Accountants (CA) recommend making the national budget realistic and achievable to avoid economic problems later.

• They suggest focusing on controlling inflation and boosting investment to support steady economic growth. (Read more)

STOCK MARKET BD

 Yields on T-bills show mixed trend

May 19, 2025

• Yields on Bangladesh’s Treasury bills showed mixed results in the latest auction, with some tenors rising and others falling slightly.

• 
  Despite the mixed yield movement, investor demand for government T-bills stayed strong, signaling ongoing confidence in these safe investments. (Read more)

 Govt measures imminent to make visible changes in market

May 19, 2025

• The government is set to take quick and strong actions to improve the stock market and bring back investor confidence. Officials say these measures will create clear and positive changes soon, helping to stabilize the market and encourage more investments.

• They also plan to improve market regulations and strengthen oversight to protect investors and make the market more transparent. This effort aims to prevent unfair practices and make trading fairer and safer for everyone involved. (Read more)

 How ICB's dividend plan for FY25 may boomerang on unitholders

May 19, 2025

• The Investment Corporation of Bangladesh (ICB) has proposed allowing mutual funds to distribute dividends from current fiscal year profits without meeting full provisioning requirements. Experts warn that this could lead to capital erosion, as funds may shrink in size after dividend payout

• ICB suggests allocating 20% of profits for provisioning and the remaining 80% for dividends. However, mutual funds are required to maintain 100% provision against unrealized losses. Paying dividends without complete provisioning is seen as distributing capital rather than profits (Read more)

 Stocks down in early trading

May 19, 2025

• The Dhaka Stock Exchange saw a drop in early trading as investors remain cautious amid global economic worries and local market instability. Many stocks lost value, causing overall market sentiment to weaken.

• Market participants are watching closely for any signs of recovery but remain hesitant to buy heavily due to ongoing uncertainties. Experts say cautious trading will likely continue until clearer positive signals emerge. (Read more)

Fintech

  Govt to form independent board to run Nagad

 May 19, 2025

• The government plans to create an independent board to run Nagad, aiming to improve its management and transparency. This move is expected to boost confidence among users and investors.

• By setting up a separate board, the government wants to ensure better oversight and decision-making at Nagad. This will help make the digital financial service stronger and more reliable. (Read more)
  

 Banking

 Trust Bank’s Q1 profit drops 8%

 May 19, 2025

• Trust Bank reported an 8% year-on-year decrease in its Q1 2025 profit, totaling Tk 29.37 crore. This decline was primarily due to increased operational expenses. Earnings per share (EPS) for the quarter fell to Tk 0.32 from Tk 0.35 in the same period last year.

• Despite this, the bank's net operating cash flow per share (NOCFPS) improved to Tk 13.82, up from Tk 7.10, attributed to higher customer deposits and a reduction in loans and advances

• Additionally, income from investments surged by 91% to Tk 313.26 crore, bolstered by increased investments in treasury bills and bonds. Commission, exchange, and brokerage income also rose by 25% to Tk 96.99 crore, driven by higher foreign exchange gains. (Read more)

 GLOBAL ECONOMIC HEADLINES

 China’s Economy Feels the Sting From Trade War (WSJ)

Xiaomi Plans Nearly $7 Billion Investment in Chip Design (WSJ)

Asia shares slip on soft China sales, Wall St futures (Reuters)

Nvidia plans to sell tech to speed AI chip communication (Reuters)

Scott Bessent warns of maximum tariffs as US takes tougher line on trade talks (FT)

Gold prices rise as US rating downgrade fuels haven demand (investing.com)

IMF Tightens Conditions for Pakistan to Get Fresh Loans (Bloomberg)

African Central Banks to Join Emerging Market Peers Easing Rates (Bloomberg)

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