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FROM THE
EDITOR

The curious case of Supply Chain Finance in Bangladesh

Supply chain finance is a much-acclaimed mode the banks, which is an unusual scenario in otherwise
of financing across the globe and especially in traditional loan products.
neighboring India. A key reason it is considered as
a product having lower delinquency rates by global Reverse factoring, which is broadly applied in
banks is, it mitigates the risk of misappropriation of other parts of the world, has yet to get broader
fund and ensures authenticity of cash flow of the acceptability in Bangladesh market. However, the
borrowers. Also, it lets the banks to take exposure most crucial challenge is, supply chain finance is
based on the stature of large corporates on which yet to be recognized as “a separate product” at
the payments are assigned to. regulatory level. It is still treated under the policy
of Short Term Revolving Loan. However, some
Although being a 20-years old market in Bangladesh commendable initiatives such as Digital Supply
financial sector, this segment is yet to produce Chain Finance Platform is taking place in the local
desired yield ascribing to some reasons. Firstly, market that breaths fresh air in this innovative
there is a lack of understanding about the concept product category. Also, there is a talk in the industry
of supply chain finance and its products despite its about the policy-making in regulatory level which
immense potential in Bangladesh market. Corporate will be the big push for this mode of financing.
entities show indifference in backing up their
suppliers, which is why suppliers have to take the
Adnan Rashid
fund at high rate. Also, here in case of non-payment Assistant General Manager
of corporates, the supplier becomes delinquent to IDLC Finance Limited

INDUSTRY & EQUITY ANALYSIS TEAM

ASIF SAAD BIN SHAMS ADNAN RASHID SUSHMITA SAHA FAHIM FAISAL
Email: [email protected] Email: [email protected] Email: [email protected] Email: [email protected]
 contents

04-05 15 24-27
Research in Focus IDLC News Trailblazers
Access to Financial • IDLC awards the First Ms. Sara Zaker
Services 2018 Finance Olympiad Vice Chairperson, Asiatic 3Sixty
Champions and theatre personality

06-11 16-14 28-29

Cover Story Industry Update
Supply Chain Finance Spotlight on Startup
Truck Lagbe • Telecommunication
Can it flourish in
• Pharmaceutical
Bangladesh by adopting
18-21
• Automobile
global best practices?
Supply chain finance is not a much • Cotton
popular mode of financing in
Sector Corner
30-31
Bangladesh, although being a 20-years
old player. Though some initiatives, for • Motorcycle industry in
example, Digital Supply Chain Platform Bangladesh
are new and commendable, the big • Runner Automobiles Month in Brief
push for this industry must come from First Bangladeshi Motorcycle
regulatory level by sketching out a Exporter
separate policy for this product.
32
Design & Printing: nymphea l www.nymphea-bd.com

12-14 22-23 For The Record

Economy At a Glance
Expert Opinion
Rizwan Dawood Shams
Deputy Managing Director and
34-36
Capital Market Review
Head of Business Finance,
IPDC Finance Ltd.

All rights reserved. No part of this journal may be reproduced in any form, by print, photoprint, microfilm or any other means without written permission from the publisher.
Access to Financial Services 2018

RESEARCH IN FOCUS
Global scenario of financial services and the Key Findings from FAS 2018
availability to access the services are the main
concerns of Access to Financial Service survey. IMF collected data from central bank of 189
International Monetary Fund collects data all over countries and published the key findings of the FAS
the world and analyses the recent trend financial survey 2018. It is expected by the FAS authority
services in different perspective. The information on that this survey will help the policymakers all around
financial services is collected based on administrative
the world to formulate and monitor the financial
data. The sources of data are both traditional
(e.g., commercial banks or other deposit-taking inclusion target and benchmark. Key findings of the
institutions) and digital (e.g., mobile money) financial survey was published in the report which are shown
service providers. in the diagram.

Non Branch Retail Banking Mobile Money Growth Data for SDG Target 8.10
Outlet The rate of mobile money adoption 1. the number of commercial bank
Reaching “last-mile” customers not considering the number of branches per 100,000 adults;
reached by traditional accounts 3% growth in Bangladesh
“brick-and-mortar” bank branch
networks.
33% growth in 2. The number of automated teller
Bangladesh machines (ATMs) per 100,000
1.4 times growth in adults.
Bangladesh 6% growth in Bangladesh

Fast growth is visible in the South Asian and Latin Myanmar etc. are also rapidly progressing in this
American counties on the non-branch retail agent sector. In Access to Financial Services Survey,
outlets, where the financial institutions target the International Monetary Fund showed the results of
rural customers who do not have the access to regular two Sustainable Development Goals, those are the
branch banking activities. Mobile money adaption number of branches of banks and the number of
is another key that was focused as the finding of Automated Teller Machines (ATM). Most growth of
this survey. Number of mobile money accounts this indicator is found in Asian region. And the worst
are almost double than the regular bank account situation in this indicator is found in Sub-Saharan
in those countries. This growth in mobile money is African region as there is five time fewer branches
visible in Africa as they are in the leading position in and ATMs than rest of the world.
mobile money growth. Countries like Bangladesh,

ABOUT THE RESEARCH

Access to Financial Services 2018 is a survey report published by
International Monetary Fund (IMF) which collects annual data on
indicators tracking financial access which is an important aspect
of development of a countries economy. It gives insight about the
financial products and policies that includes features which make
financial products more accessible to the end user.

4 of 36
Number of ATM Booth
213,396
2017
9,522

201,913
2016 9,019

183,993
2015 7,839

163,230 India
2014 6,259 Bangladesh

115,849
2013 5,273

97,121
2012 4,217
0 50,000 100,000 150,000 200,000 250,000

Here is a comparison between Bangladesh and last few years, whereas Bangladesh even do have
neighboring country India. India has shown a some growth in ATM installation but not up to the
tremendous growth in installing ATM Machine in mark considering India.

Number of Mobile Money Account Holder (In Million)

YEAR BANGLADESH INDIA

2014 24.20 12.15
2015 34.29 68.71
2016 41.04 211.85
2017 58.78 430.57

In the mobile money sector, Bangladesh is leading money and mobile banking. India is also in the run
the region. Bangladesh has been a hub for mobile with Bangladesh in this indicator.

Number of Commercial Bank Branches (In thousand)

Bangladesh China P.R: Mainland India
133.49

160,000
126.33
117.86

140,000
106.55

99.46
98.64

120,000
95.68
89.81
86.70
85.35

100,000
80,000
60,000
40,000
9.45
8.38

9.72
9.11
8.7

20,000
0
2012 2013 2014 2015 2016

Till now Bangladesh is lagging behind from both branches, but still can serve the customer base by
India and China in the parameter of the number of online banking facility and ATM all over the country.
commercial bank’s branch in the country. China This strategy is adopted by China to reduce the cost
is concentrating more to have online platform in associated with maintaining the branches.
banking so that they can reduce the number of

5 of 36
SUPPLY CHAIN FINANCE
CAN IT FLOURISH IN BANGLADESH BY
ADOPTING GLOBAL BEST PRACTICES??

6 of 36
 SUPPLY CHAIN FINANCE
COVER STORY CAN IT FLOURISH IN BANGLADESH BY ADOPTING GLOBAL BEST PRACTICES?

In most emerging markets, Small and Medium have other mechanism to minimize risk from supplier
Enterprises (SMEs) lack access to the credit and financing. For instance, selecting suppliers who have
liquidity they require for their daily working capital multiple corporate buyers under their belt hailing from
needs. Around the world, supply chain finance is a different industries.
growing source of external financing for corporations
and SMEs. Supply chain finance is considered as a Mechanics of Supply Chain Finance
win-win opportunity for all stakeholders in the supply
chain ecosystem- the corporates, their suppliers and Simply put, supply chain finance is a trip-art solution
dealers. It links small vendors to the large corporates, between the buyer (mostly multinationals) and a
which enables SMEs to access credit at a lower cost with Financial Institutions (FI), which allows suppliers to
minimal documentation and lesser collateral. join a programme to discount their receivables to the
FI which is delivered to and accepted by the buyer. The
Supply chain financing ensures that all parts of the solution provided by the FI is that they will make an
manufacturing process can stay in sync. A delay in the arrangement with the buyer and the supplier so that
production impacts the final sale of the product and supplier can get enough fund to continue production.
could cost the manufacturer money from loss of sales. This financial structure is an ideal solution that leads to
By receiving the payment ahead of time, the supplier twin advantages:
can deliver their portion of the chain efficiently, also,
without any additional cost to the buyer. Although they It reduces the average Day Sales Outstanding
are charged a fee for the cash in advance, this is small in (DSO) of the supplier and,
comparison to what the price would be if they were to
default on the commitment to produce entirely. It increases the Day Pay Outstanding (DPO) of the
buyer
In another viewpoint, the challenge in SME lending is
to reach and identify the new-to-banking borrowers Three parties are involved in supply chain finance:
and veracity of financial data of the borrower. This gets
mitigated to a large extent in supply chain finance by Buyer/Anchor
generating credit comfort from borrower’s transactional Supplier
behavior with large corporate. Financial Institutions
What is unique about this mode of financing is that Broadly, there can be two avenues of financing in supply
the credit provided by a lender is explicitly linked to
chain finance: Factoring (Supplier Financing) and
the value of a supplier’s accounts receivable rather than
Reverse Factoring.
supplier’s overall creditworthiness. Therefore, it allows
high-risk suppliers to transfer their credit risk to their
Factoring is a type of debtor finance in which a
high-quality buyers. Mostly these solutions are for
business discounts its accounts receivable (invoices) to
those companies which have inventories and sell those
a third party (called a factor) at a discount. This mode
to large corporate entities in a scheduled basis and their
of financing allows manufacturers to buy raw materials
working capital gets tied up in those large corporates. In
(or finished goods) in order to build inventory or fulfill
a bid to have a regular stream of cash flow which may be
large orders. It works by partnering with an FI that
required for undertaking another ongoing project, they
go for this mode of financing. It enables them to receive extends a corporate entity (buyer) trade credit, and it
the payment within few days of initiating the project, acts as an intermediary between anchor/buyer and its
which they were supposed to get after the agreement suppliers. The corporate entity places a purchase order
credit period. For this reason, it’s very attractive, relative to its supplier, supplier will deliver the goods to the
to other working capital products, being low cost and corporate anchors, then supplier will send the bill to
simple to access. the financial institution which shows that the order is
accepted by the corporate buyer. FI discounts the bill
Supply chain finance is cheaper than any other form of amount submitted by the supplier and pays the supplier
traditional financing, because FIs fix price based on the and finally corporate buyer pays FI on the net credit
risk exposure for every loan. For further security, FIs do terms(usually 30 to 60 days).

7 of 36
 Purchase orders In global context, reverse factoring is more popular form
1 of financing as it cuts down the cost of big corporates,
Supplier Buyer
which motivates them to arrange a financing option by
2
Goods/services and invoices themselves for their suppler so that the supplier can
keep on supplying goods to meet large volume demands.
Discounted
Finance 5 4
Request
for discount
Confirmation/
approval 3 6
Invoice Since both the buyer benefits from being able to extend
Payment
Provided facility of invoices
their payment terms, and the supplier is receiving
F Platform
SC payment earlier; it has become a preferred method of
Financial
financing for both sides of the manufacturing chain. By
Institution taking advantage of reverse factoring, corporate entities
are not putting their business into any debt. They are
getting a flow of working capital to continue to function
Reverse Factoring takes place when an FI commits and meet their customers, vendors and employees’
to pay a company’s invoices to the suppliers at an needs.
accelerated rate in exchange of a discount. It is unlike
traditional invoice factoring, where a supplier wants to Supplier Finance in Bangladesh
finance his receivables. Reverse factoring is a financing
solution initiated by the ordering party to help their Supply Chain Finance was introduced in Bangladesh by
supplier to finance their receivables more easily.
IDLC Finance Limited in 1999, at a time when it was
Typically, at a lower interest cost than what factors
usually offer. an unchartered financing territory for the FIs. In 2006,
United Finance Limited started offering the facility and
Supplier invoices
customer
LankaBangla Finance Limited followed the suit. IPDC
Buying finance had a small portfolio of supply chain finance
Supplier
Organization
at that period, although it was discontinued after a
while. In 2016, IPDC Finance came back strongly with
Immediate
payment made supply chain finance with a view to capturing the lion’s
with small discount
share of the market. Meanwhile, few top-notch banks
Verified invoices
submitted for
introduced this facility and created small portfolio of
payment
their own. In Bangladesh, the most popular form of
supplier financing is factoring. Reverse factoring is
Bank not widespread because, the corporate entities are not
100% invoice value settled
at maturity
Service free to buyer i.e. only
repays 100% invoice value
willing to take the extra cushion for the suppliers.

How Supply Chain Finance benefits the stakeholders?

SUPPLIER CORPORATE BUYER FINANCIAL INSTITUTION

Early payment reduces Minimizes investment in Diversification of risk
financial dependence on working capital
buyer Quick asset building and fee
Reduces cost of goods sold revenue
Reduces cost of capital by
leveraging buyers credit Ensuring availability of goods Cross sell opportunity
rating of end user
Credit evaluation is simply
Increasing certainty of cash based on the movement of
flow goods
Defined end use resulting into
lower risk of diversification of
fund

8 of 36
Bangladesh Supply Chain Timeline

BANGLADESH SUPPLY CHAIN TIMELINE

IPDC Finance, EBL

returned to the
market with srong
Different banks like planning on
City Bank, Brac Bank supplier financing
IPDC FInance, EBL came into the
Came into Market. scenario.
United Finnce &
Lankabangla IPDC stoped supplier
IDLC Started Finance in the financing
Supplier Financing in equation
Bangladesh for the
First Time

1999 2006 2007 2016 2017

Market Players Working with the anchor on a recurring basis;

project based work is not desired by FI due to lack
Considering the size of portfolio, NBFIs are in the of accountability on the anchor
forefront in the dimension of supplier financing. IPDC
Finance, IDLC Finance, LankaBangla Finance, United Having multiple corporate buyers (preferably two
Finance are working on supplier finance for last decade. or three) in portfolio
Top-notch banks like Eastern Bank Limited (EBL), City
Bank, BRAC Bank are also getting into the market very Checking suppliers’ track record: A supplier is
recently. generally believed to have a good reputation if s/he can
maintain two years of experience with the corporate
Current portfolio of Market Players (Apprx.)
entity. By assessing the track record, the FIs can evaluate
Name of FI Portfolio Size the business behavior of the supplier with the anchor.

IPDC Finance Ltd. BDT 180 Crore Working on recurring basis: When a supplier
Lanka Bangla Finance Ltd. BDT 155 Crore receives contracts on recurring basis from a corporate
United Finance Ltd. BDT 130 Crore entity, the supplier is believed to have maintained good
quality of products/service. Project based financing is
IDLC Finance Ltd. BDT 74 Crore
not encouraged in supply chain finance since there is
Others BDT 61 Crore
limited cash flow from one project and supplier shows
Total BDT 600 Crore lack of accountability to the anchor.
Source: industry insider
Multiple Corporate Buyers in suppliers’
What makes “an eligible supplier”? portfolio: Having multiple buyers under suppliers’
In a bid to be under the green zone of the FIs, a supplier belt act as safety cushion because it reduces their risk
must fulfill the following criteria: if an order is cancelled from a particular buyer and the
loss is compensated by the earnings from other buyers.
Having a good payment track record of minimum
Besides, having buyers from different industry can
two (02) years with the anchor
diversify the risk of the supplier.

9 of 36
Why reverse factoring is not evident in Why Supply Chain Finance still could not gear
Bangladesh? up in Bangladesh?

While in other parts of the world, reverse factoring Supply chain finance is a 20-years old market in
is a very popular mode of supply chain financing. In Bangladesh. Despite being in the market for such a long
Bangladesh, the scenario is not evident due to- time, the product could perform to the desired level,
due to some reasons.
Absence of regulatory policy regarding supply
chain finance implies no legal implication on the Anchor’s Participation: Most of the corporate
buyer/corporate entities. Rather, they prefer to go entities in Bangladesh conduct their business on
for composite facilities. Therefore, they tend to credit. They purchase goods on credit from the
nurture a lukewarm behavior towards this mode of suppliers. however, corporate anchors are reluctant
financing. to provide assignments for the goods delivered.
The other side of the coin illustrates a scenario that Assignments are corporate Letter of Comfort
few corporate entities who approach for reverse that provides FIs a minimum guarantee that the
factoring, have already their line of credit all used goods are received by the anchor and the anchors
up. Therefore, it is prudent for the FIs not to go for recognize the credit amount as their payable. In that
those buyers, since they pose a high probability of case, the receivable of the supplier is recognized
default. officially by the anchor and this Letter of Comfort
lowers the risk level for the supplier. Therefore, with
Digital Supply Chain Platform assignment and with lower risk level, suppliers can
manage the fund in a low discounting rate which
Many industry players believe that blockchain can
is beneficial for them. However, this practice is
solve some of the supply chain finance problems as
not evident and this phenomenon makes the
the technology makes data credible, transparent and
suppliers bound to take financing with higher rate.
transaction settlement more efficient. Thus optimizing
Eventually, it demotivates the suppliers to use this
financing and reducing business cost. The technology
mode of financing.
promises to help organizations address some of the
biggest challenges in the supply chain, ranging from
Many corporate entities that used to give
counterfeit components to the complexity of product
assignments to the financer are not continuing
recalls. Tencent FiT, a division of Chinese media and
with the practice due to their negligence about
tech giant Tencent, is creating an open supply chain
supply chain financing.
finance platform based on blockchain technology.
Not yet a recognized product: Bangladesh
IPDC Finance Limited, one of the key market players
does not have any specific policy guideline or legal
in supply chain finance, is in the process of coming up
framework for factoring. Bangladesh Bank still
with IPDC Orjon, which is a digital supply chain finance
does not recognize supplier finance as a separate
platform powered by Blockchain technology. Being
product. Till date, there is no separate circular on
the first of its kind, “Orjon” aims to create a holistic
supplier financing products from Bangladesh Bank.
approach in supply chain finance realm in Bangladesh.
Currently it is being treated under the circular for
With this platform, IPDC zeroes in to target 25,000
Short Term Revolving Loan. Also, there is no legal
MSEs and providing services like factoring, reverse
framework for the security of the payment for
factoring, work order, and distributor financing. The
these products.
app enables the three stakeholders of supply chain
finance- FI, buyer and supplier to see the whole process An evident practical problem that the FIs face for
in the same interface, which brings more transparency not having any specific policy guideline on this
between these three parties. Also, the supplier can see product is, there is no law to make buyers liable
the financing cost for whole pool of bills and also for for payment. Generally, there are two options
single bills.

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Globally Supplier finance Volume in Mln (Euro)

China 405537

HongKong 46944

India 4269

Japan 37284

Singapore 44000

in a factoring deal: with recourse and without and half years since they started the
recourse. When a factoring contract is made ‘with
recourse’, the supplier is liable for the payment and business. Axis Bank’s Supply Chain
in case of ‘without recourse’, the buyer is liable for Finance arm has seen a steady
the payment. Currently, FIs can not exercise the
‘without recourse’ option since there is no legal
compound annual growth rate of
implication of this option in this market. 26% per cent since the past three
years.
No CIB implication for the anchor/buyer:
Since buyers don’t have any direct trade with the
According to the market analysts, any default in
FI, the financing contract does not reflect in their
repayment results in stop supply invocation by the large
CIB. Therefore, in case of default, buyers are not
corporates, which can jeopardise the business’ existence.
penalized in any way, which makes them more
indifferent and non-liable when the supplier fails This acts as a deterrent for borrowers According to
to make the payment. YES Bank, corporate anchors also help banks in the
delinquency management and keep NPAs low.
“Corporate linkages serve as an assurance”:
supply chain finance in India How to pave the way forward?

Reverse factoring leads the pack in India’s supply chain The driving force in this sector needs to arise from
finance realm. Negligible non-performing asset (NPAs) policy level. Unless factoring is considered as a
in the segment is a driving factor for banks, which separate product and both the parties will have
they attribute to the inherent structure of supply chain their due accountabilities, this product will keep
finance. on waning.

Bank of Baroda claims to have Corporate entities need to come forward with a
zero NPAs in this segment. They mentality towards supporting their suppliers. They
may identify the suppliers who they do business
sanctioned over Rs. 10 billion and
with most frequently and approach for reverse
have around 25 anchors within one factoring.

11 of 36
EXPERT OPINION IPDC FINANCE LTD.

IPDC FINANCE LTD.

LEADING THE WAY TO SUPPLY CHAIN FINANCE

Mr. Rizwan Dawood Shams joined IPDC Finance in 2007 and worked on
different projects to improve the corporate investments and asset management
through formulating different strategies. Currently he holds the position of
DMD & Head of Business Finance in IPDC finance. He is enthusiastic to create
a supplier financing friendly environment in Bangladesh and open the doorway
to explore a new dimension of corporate financing. Mr. Rizwan Dawood Shams
believes that there is a huge market for supplier financing in Bangladesh and it is just
a matter of time for the corporate buyer and supplier to adapt this form of financing.

Rizwan Dawood Shams

DMD and Head of Business Finance, IPDC Finance Ltd.
MBR: Supplier finance have been a popular mode of SME financing facilities. Most of the SMEs are not aware of
financing around the world. Despite being in existence their eligibility to get supply chain finance in relatively
in Bangladesh for quite a while, why do you think supply easy terms and condition. Moreover, promotion and
chain finance hasn’t yet become a mainstream mode of communication from financial organization’s end are still
SME financing? inadequate in volume. Because these products are operated
in a completely manual environment, financial institutions
Rizwan Dawood Shams: I have observed that, due to are not able to expand the financing facility beyond mega
consistent efforts by Bangladesh Bank and other local and cities. But as we can see, majority of the SMEs, who work as
multilateral agencies, the access to finance for SMEs have suppliers and distributors, do business outside megacities.
increased substantially in recent time. However, more often
than not, these finances are of high cost, inappropriately MBR: Why corporate entities still don’t consider Supply
structured, complex in process and do not adequately Chain Finance as a financing option and rather go for
support the growth aspiration of SMEs. In this condition, composite facilities like CC, OD?
Supply Chain Finance (SCF) can be a great financing tool
for SMEs, allowing them access to collateral free, fast and Rizwan Dawood Shams: CC and OD facilities are very
easy financing irrespective of their size. common and widely accepted among the corporate
houses in Bangladesh. However, these facilities can only be
In recent years, Non-Bank Financial Institutions (NBFIs) offered by banks, and not non-bank financial institution.
have played a significant role in introducing supply chain Therefore, IPDC cannot offer CC and OD to the corporate
finance to the big suppliers for domestic trade. In most houses. But under Supply Chain Finance, we do offer
cases, supply chain finance has now become somewhat Reverse Factoring Finance or Payable Financing to the
of an exclusive product offered by Non-Bank Financial corporates. Usually, we don’t focus on Reverse Factoring
Institutions in this country. Though the Supply Chain as our priority product because we know about their
Finance products were introduced in the financial market widely acceptable substitutes- CC and OD. The challenge
long ago, it withstands that SCF requires significant is to overcome the corporates’ reluctance to collaborate
operational resources for the financing banks/FIs to with their suppliers in availing supply chain financing
effectively mitigate the operational risk involved in the facilities. It is a deep-seated mindset of the corporate
process, thus resulting in slow penetration in Bangladesh houses to condone any need for timely payments to their
market. suppliers while they endeavor to maintain their own
treasury needs. By delaying supplier payments as much
Besides, one of the major reasons is the lack of awareness as possible, corporates strive to maintain a regular Net
among the SMEs regarding these sorts of unconventional Working Capital for themselves and in doing so, disregard

12 of 36
the necessity of faster payments to small suppliers. Most of the Supply Chain Finance. We are reaching potential
of the times, corporates do not realize how important it is SMEs, doing supplier conferences, promoting best cases
to ensure regular payments to their suppliers in order to of supply chain, and acknowledging the contributions of
maintain a healthy Supply Chain Management themselves. people and organizations. As we believe that collaboration
is the biggest innovation, we are working on levelling the
By changing this outdated viewpoint obstacles to function in supply chain sectors. Starting from
financing the suppliers and distributors, we are working on
that Corporates harbor about their enhancing the overall supply chain industry.
suppliers and providing the advantage
of unlimited financing through supply MBR: IPDC has launched a digital platform for
managing the supplier finance business. Can you
chain financing, our vision is to
elaborate how this new platform will help leverage
build better scopes for supply chain IPDC’s factoring business and what is unique about this
financing facilities over facilities like system.
CC and OD.
Rizwan Dawood Shams: Yes. We are to launch an
MBR: IPDC has entered the market of supply chain integrated supply chain finance digital platform powered
finance with significant branding initiative last year. by Blockchain technology. The main goals of the platform
What is you take on the prospect of supplier finance in include binding the suppliers/distributors (SMEs),
Bangladesh and how IPDC is approaching the market in corporates and IPDC together through a unique digital
comparison to other banks/FIs to be successful? platform that will ultimately provide SMEs online access
to financing, reducing the operation
Rizwan Dawood Shams: With the expenses for all parties and fast-
vision to serve underserved regions, tracking the transactions in a secured
IPDC has grown exponentially environment. The main beneficiary
since introducing SCF in 2011. of the project is the SMEs who
Besides, as a financial partner, IPDC are suppliers and distributors of
nurtures SMEs through developing large corporates/(OEM) and doing
viable solutions, specifically to meet business in all over Bangladesh.
their financial needs. By mitigating
perceived risk and thereby addressing key bottlenecks to Currently, IPDC is actively doing
SME lending, IPDC emerges as a game changer in SME factoring finance, work order finance and distributor
financing through Supply Chain Finance. Having laid financing but the penetration rate per corporate/enterprise
out the Strategic Five-Year Plan, IPDC aims to focus on is low due to absence of corporate-centric arrangement
expanding and deepening connections within corporates and lack of ecosystem. With the implementation of this
so that we can finance mid-market enterprises. digital platform and market development activities, we are
confident to increase the penetration rate per corporates/
In current SCF model, manual intervention for enterprises.
coordinating all the stakeholders is maintained. There
are several challenges that are faced by the financial This innovation will help us minimize the geographic
institutions. Longer processing time, communication gap, barriers, all the parties from different locations can have
barrier to geographical expansion, higher operational the access to the ecosystem. This minimizes the data or
cost and so on are some of the underlying key challenges. clerical issues usually encountered in manual processes.
These challenges instigate the urge to develop a proper The technology, via automation of processes and protocols,
supply chain ecosystem in the overall supply chain finance will remove middlemen once and for all. Companies and
management and we believe that the solution lies only in businesses will be benefited with lower cost fund and
automation. reduced transaction costs.

It is a fact that we have been launching significant IPDC will adopt the Block Chain technology to build the
branding and communication activities since last year SCF ecosystem. Arguably, Blockchain technology is still at
with a motto to aware the SMEs regarding the benefits an early stage to become a business application. However,

13 of 36
there is no doubt about its massive potential to transform Supply Chain financing products are technical in nature
the business landscape both globally and domestically over and require strong dictum and monitoring on a regular
the coming years. The technology partner for developing basis. Moreover, a crucial part of the process is to acquire
IPDC’s Blockchain based platform is IBM, who has assignments from corporate houses, which proves to be
difficult most of the times. To prevail over these challenges,
recently completed first phase of similar project for two
a sound regulatory guideline from Bangladesh Bank will
leading bank and financial institutions of India.
not only reserve the rights of the Factors but will also
ensure the best possible interest of mass suppliers in the
We have already selected IBM as country represented properly.
our technological partner and both
India has accomplished this in 2012 and now their supplier
IPDC and IBM have been working finance business is more flourishing than ever.
together for development of this
‘Game Changer’ initiative for the Another policy that we recommend
country. is to Form Collaborative
Associations to create awareness
MBR: Is there any barrier from supplier’s end? Do they among corporate houses.
need adequate training on this concept? Influential bodies like Dhaka
Chamber of Commerce Industry
Rizwan Dawood Shams: Any new initiative initially goes
through rough path. We are also expecting the same. Some
(DCCI), Federation of Bangladesh
system related, and knowledge related challenges will be Chambers of Commerce Industry
there for this digital platform. However, we have identified (FBCCI), SME Foundation and
the challenges and planned strategies to overcome them. Bangladesh Supply Chain Finance
Suppliers are the key players, and most of them don’t have
Association (and more) can form
adequate technological knowledge. For that, we must
conduct comprehensive training programs and service
strong alliances to raise awareness
support. among Corporate houses about the
necessity and benefits of Supply
MBR: What policy development you recommend for Chain Financing.
flourishing supplier finance business in Bangladesh?
Through collaboration with such an associative body,
Rizwan Dawood Shams: The concept of Supply Chain corporates can be persuaded into being more flexible in
Financing might be a relatively new one in our region, giving out assignments.
but it certainly has a very promising future given our
If corporates were to accept Work Orders that entail an
market structure. Proper policies, if undertaken, will
assignment clause from their suppliers, rest of the Supply
positively change the face of supply chain financing in
Chain Financing process would become much easier, thus
Bangladesh, thus creating a flourishing economy through
creating prevalence of the products. If SMEs and corporate
the development of small businesses. The policies that we houses can prioritize Supply Chain Financing alongside
recommend for enhancing the supplier finance business in their regular financing endeavors, they can help create a
Bangladesh entail Supply Chain Finance Regulation policy sustainable value chain and a healthy eco-system for their
issued and maintained by the Central Bank of Bangladesh. Supply Chain Management.

14 of 36
IDLC NEWS IDLC NEWS

IDLC Awards the First Finance Olympiad Champions

The Date November 2, 2018 marked the final Gala impart knowledge and help enhance skills of the youth
Round of the first ever Finance Olympiad organized on financial literacy all across the nation. Against this
by country’s largest multi-product Non-Banking backdrop we have organized this Olympiad for the
Financial Institute IDLC Finance Limited at Krishibid students of school, college and university.”
Institution Bangladesh. More than twenty thousand
students registered and participated in the online The winners received laptops, mobile phone handsets,
finance Olympiad from 10 October 2018 to 25 October trophy, medals and certificates from IDLC Finance
2018 at the end of which 50 deserving contestants were
Limited.
shortlisted for the offline round. Later 24 contestants
competed for the champion’s title in two groups, in
‘Orther Ortho’ an E-learning platform was formally
front of a live audience.
launched at the end of the event. People can learn about
various financial topics from this website.
Kazi M. Aminul Islam, Executive Chairman of
Bangladesh Investment Development Authority
(BIDA) graced the event as the chief guest. Arif Khan, Jane Alam Romel, Group Chief Marketing Officer of
CEO and Managing Director of IDLC Finance Limited IDLC said, “People can learn about finance through
was also present during the event. interesting comics, detailed articles and exciting quizzes
on this website and they can connect the real life
Arif Khan said, “Being part of the financial sector for financial problems with real life solutions by enhancing
over 33 years, we believe IDLC has a responsibility to financial literacy skills.”

15 of 36
SPOTLIGHT ON STARTUP TRUCK LAGBE

TRUCK LAGBE
Truck Lagbe is a company which is building a network of trucking facility around all over Bangladesh with lowest possible
fare and creating hassle free truck hiring experience. Right now ‘Truck Lagbe has become a dependable marketplace for
both truck owner and customer.

Truck Lagbe “When we will be able to utilize

Truck Lagbe is building a network of trucking facility all the vehicle to 90 to 95%
around all over Bangladesh with lowest possible fare level, the overall costing for
and creating hassle free truck hiring experience.
Right now, ‘Truck Lagbe has become a dependable sending good will be lower.”
marketplace for both truck owner and customer.
The nailing phase
Identifying the problem.
Implementing the idea was not very easy because the
Hailing from a business oriented family, Mr. mode of the business is quite different than any other
Anayat Rashid was always enthusiast about mode of business and other mode of vehicles. There
starting something of his own, something new and is a misconception in the market that Truck Lagbe
innovative that could add value to the economy and has the same modality as Uber, Pathao and other
overall wellbeing of the society. He completed BBA relevant app based service solution, however that is
from North South University and then joined family not entirely true. The downside of any transportation
business. After running the business for twelve sharing business involves a common trust issue of the
years, he felt this vehicle owners
ecosystem about the safety
has rooms for and security
improvement in of the vehicle.
terms of process
E s p e c i a l ly,
efficiency. Idea of Truck Lagbe popped up in mind
when it comes to truck owners, they were not
when he was trying to move some goods from one
accommodative to change and ready to bank on a
place to another. It took him by surprise that there
new platform like Truck Lagbe.
exists some discrepancy in pricing when it comes to
hiring trucks of same model and for same distance.
Dealing with the truck drivers posed a real challenge
for them. Many truck drivers did not have any cell
His thought was simple, if he could incorporate
technology in this platform, it would be of great phone. Also, it was difficult to make them realize
value for both the customer and the truck owner about the benefits of this platform because they are
as the whole process becomes efficient because the never used to this type of service, they even hardly
truck owner is getting both up-trip and down-trip heard of such service till date.
and they can charge lower. In this way, customers
will have some cost benefit and it will be a win- Other hurdles include logistics support like goods
win situation for both the parties. According to Mr. itself, placement of labor to load-offload goods,
Anayet, utilization of the vehicles is the key reason setting the pricing because the pricing is always
transportation is costly in Bangladesh. As he opines, fluctuating and so forth.

16 of 36
 “If stock market can be automated
then why not trucking business,
because trucking business follows
same rule as stock market.”
The app of Truck Lagbe is built in-house. On a
regular day, they get almost 1000 requests.

Who does it serve?

Mr. Anayet Rashid Truck Lagbe targets commercial customers. The

CEO, Truck Lagbe initial plan was to entertain the need of SME and
large corporate clients. However, in this process, they
However, Mr. Anayet discovered a surprising fact got household customers who orders for truck to
about truck owners after venturing into this realm: get pack-and-shift facilities. Some of the customers
truck owners have a connotation of belonging required the service to get one-time benefit to
from a less-educative background, which is not move new household items like furniture or locker.
true in realty. A significant portion of them cater Reasonable pricing is a reason the platform is
to intellectual class like doctor, engineer and so growing popular day by day.
on. This is because they felt that transportation
is a good business to invest on. This particular About the team
community welcomed this initiative.
Truck Lagbe has a dynamic team consisting of 30
members. Selection of the team is mostly based
How it works? on their capability to work not just educational
background. Because in this business book smart
The Truck Lagbe model has same features as stock does not help much, street smart people are mostly
market, where customer can give the input of the required. Different third party organizations support
requirement of truck and the time. Truck owner throughout the whole operation process based
bids on that offer from customer. Among all those on requirement. The marketing team preferably
bids, customer choose the best rate from the app deploys one-to-one marketing method since the
and finally the deal is done. To ensure that the target customer group are not much social network
oriented.
trucks shows up on time, there is a rating system
for every truck. If any truck owner accepts any
offer but doesn’t show up on time, their rating Plans down the line
will be affected and the probability of getting trip
Currently, Truck Lagbe is looking forward to some
from the platform will be reduced. Besides if any
expansion plans. They are planning to introduce
causality occurs, it is matter of few minutes for the
two new types of vehicles, dump truck and specialty
customer to find another trip. Normally, the truck vehicles. The app is incorporating a new platform
drivers have enough understanding of road what is where bulk vehicle request can be placed to fulfil
going to happen, so, when they choose rides they the need of large corporate. Besides, improving user
make calculative choice to have multiple offers a experience is another target of Truck Lagbe. The
day. According to Mr. Rashid, vision is to get the desired ride with one click.

17 of 36
SECTOR CORNER MOTORCYCLE INDUSTRY IN BANGLADESH

MOTORCYCLE INDUSTRY IN BANGLADESH

More than half a dozen of firms are establishing facilities
to assemble and manufacture two-wheelers in Bangladesh. MOTORCYCLE INDUSTRY FACTS
Till now Runner Motors and Walton is the local motorcycle
manufacturer in Bangladesh. Apart from that motorcycle Market Size BDT 4,000 crore (approx.)
industry is dominated mostly by Indian motorcycle More than 1,000 bikes sold daily
brands.
3.6 lakh units of motorcycle sold locally in
Market Share of Motorcycle (2015) 2017, up from 44% y-o-y

Monthly demand 8000 units, whereas

monthly supply 6000 units

Around 60% motorcycles sold in the country

12% manufactured locally

6% Sales of bikes in 110-125 cc segments have

driven by the popularity of ride sharing
service
8% 30% raw materials sourced locally and 70%
53% imported

9% Runner Automobiles: the first motorcycle

exporter in Bangladesh

Runner exported 1000 units to Nepal; in talks

12% to export to Bhutan

Honda is establishing manufacturing plant at

Gazaria in Munshiganj

ACI Motors developing assembling plant of

Bajaj TVS Auto Hero Honda
Yamaha motorbikes at Rajendrapur plant in
Runner Walton Other Gazipur
Source: Financial express

Impetus for growth of this industry:

Motorcycle Sales Statistics
Growing middle-class pie
Reduction in supplementary duty on motorcycle e
ve rag 3.6 Lakh
parts import has reduced overall cost of ona
th
manufacturing motorcycle, cutting down the grow
price of locally manufactured motorcycles in 60%
2 Lakh
Bangladesh.
Popularity of ride sharing apps. 1.43 Lakh

Government policy to increase manufacturing

of motorcycle in Bangladesh to 5 lac by 2021 and 2015 2016 2017
doubling in by 2027. Source: BRTA

18 of 36
Bangladesh still a long way to go amongst High cost of registration
other Asian countries in owning bikes
Not adequate financing options for motorcycle by
87% FIs. Although of late, BRAC Bank and City Bank
83% started giving out bank loans

Indian brands are real threat for local manufacturers

60% because Indian brands hold lions’ share of the
market
47%
43% Future Prospects
As purchasing power of our country is improved,
19% people are more getting into purchasing
transportation of their own

Pathao, Uber, Shohoz, Obhai and other relevant

service apps are making bike more acceptable to
mass

Financial institution are initiating new products to

Bangladesh Pakistan India China Malaysia Thailand
finance motorcycle
Source: Different global website
As manufacturing cost of motorcycle is reduced and
Challenge demand growing fast, foreign brands have a strong
motive to establish plant in Bangladesh which will
Lack of vendor development for manufacturing
allow customers to have quality motorcycle with
required components and supply of those to
manufacturers lower price.

Market Player

19 of 36
RUNNER AUTOMOBILES
FIRST BANGLADESHI MOTORCYCLE EXPORTER

Marketing Director of Runner Group, Amid Sakif Khan is associated with

the company for last 3 years. He concentrated his focus into different aspect to
promote ‘Runner Motor’. Runner motor, which is the first of its kind to export
motorcycles, developed its strategy to reach customers from every segment of our
country with different price option and variety feature based on the preference of the
customer.

Amid Sakif Khan

Director, Marketing, Runner Group of Company

MBR: Can you briefly share the important events that We analyzed the growth trend of the country and came
helped Runner Automobiles reach this peak? up with the visionary plan of manufacturing motorbikes
locally. Motorbike market size in Bangladesh is about
Amid Sakif Khan: The motorbike industry was already 500,000 bikes. We expect that it would increase this year as
there and it was growing. Products from China, Japan and the political situation is stable now.
India were dominant in the industry. All the companies
further improved their product quality. The companies MBR: In midst of the flocks of Indian and Chinese
exceled based on the economic growth of our country. bikes, how Runner, being a Bangladeshi manufacturer,
For example, Indian companies would want to establish ensures quality of the bikes?
a regional office in Bangladesh and start selling their
products and they already have a manufacturing plant Amid Sakif Khan: When we started manufacturing, we
in India. Runner was assembling motorbikes in the ensured we have quality control and after sales service. We
early stage in the year 2000. We started manufacturing test our components both serially and randomly in our
motorbikes realizing the country’s growth as well the plant. If the components fail to meet the benchmark, we
industry. As economy of Bangladesh is growing, it needs discard them and halt the shipment of those components.
mobility to keep up the pace. We wanted to manufacture We give our feedback to the vendors so that they can
motorbikes locally and make it affordable for mass people improve the quality of the components. This is how we
so that mobility takes less cost and saves the time. This ensure quality control.
is how our manufacturing operation started and now we
started exporting to some neighboring countries. MBR: What is the philosophy of Runner automobiles
in case of positioning the brand in the market? How do
Bangladesh’s GPD and export are increasing and you differentiate Runner from its competitors? What is
dependency on import is decreasing. We had a technical your USP?
support collaboration with a Chinese company,
‘Dayang’ for the initial setup but now our company also Amid Sakif Khan: We have focused on affordability
collaboratively workes with Indian, Korean, Chinese and and comfortability first, then comes features of the
other companies in the automotive industry. Runner bikes. Pricing of the bike depends on the features it has
has the capacity of producing 500 motorbikes in a day. and people have a very subjective views on quality. For
In the facility we produce fuel tank, frame body, stands, example, a person may find Maruti car very practical,
handles etc. and source others such as, plastic components, whereas the other person may find BMW cars are over
seats, chains from local vendors who manufactures these
featured. So, as a manufacturer we cannot define quality;
components locally, electric components from different
it rather depends on the perception and affordability of
countries. As a manufacturer we make our design source
components based on the designs. Automobile industry individuals. The pricing also differs due to import duties
came into scalability when people’s purchasing power was on bikes and its components. Customers will exercise
increasing. For instance, we see a lot of luxury cars on their purchasing power more if the product is affordable.
the street which reflect the spending behavior of people. Runner’s automobile first enabled customers to purchase

20 of 36
motorbikes in installment. After that, other companies MBR: What are your activities when it comes to giving
in the industry followed the trend. Recently, we have customers a superior experience?
convinced the banks to finance motorbikes like car loans.
We make customers dream about owning bikes and we are Amid Sakif Khan: We constantly learn from the feedback
of our customers. We try to improve our services
designing our products accordingly. We cater our products
accordingly. We approach our customers warmly so that
to the market based on customers’ need. Our bike ranges
they can experience a great service from us.
from BDT 60,000- BDT 260,000. Our company mostly
generates revenue from 80cc and few premium bikes. The demand of bikes in Bangladesh is very high. Due to
For example, we would recommend a Pathao bike rider heavy traffic in Dhaka city and easy movement, people are
to purchase a 100cc double rider bike with more power, preferring bikes than any other mode of transportations.
‘Runner Bullet’ on the same note ‘Kite Plus’ is a unisex As the infrastructure of the country is growing, the
product for the trendy young people which has a radio and need for transportation is also increasing. The increased
USB hub in it. We always try to come up with new features purchasing power of the people are influencing them to
and we further improve those features based on the market have their own private transportation in affordable pricing.
feedback.
MBR: Of late, Runner went through few important
MBR: What is your marketing strategy? events: Going for IPO, starting export to Nepal. What
are your future initiatives for expansion and capture the
Amid Sakif Khan: Our first strength is that we are a market?
Bangladeshi brand. We carry our nation’s flag where ever
we are stepping in. As a Bangladeshi automotive brand, Amid Sakif Khan: The investment we have got from
capital market will be used for R & D of the company. It
we are focusing more on this area to make all people
will help us to improve our product quality and expansion.
believe that this is our
Since the year 2000, we are
nations product but not from
manufacturing two wheelers.
other countries. So, brand
We are expecting that we
building by several ATV
will experience an upward
and BTL activities are there
growth against the foreign
nationwide. E.g. Runner
competitors. We also want to
is with cricket. We are the
further improve the quality of the product and services we
associate partners of Bangladesh cricket team for the home
cater. Currently we are manufacturing two wheelers and
series. Other than that, we are with BPL, Rajshahi Kings,
expect to manufacture three wheelers in near future. As the
our brand ambassador is Shakib Al Hasan, one of the
automobile industry is mostly dependent on technology we
icons of Bangladesh. One of our strengths is to give totally
expect that, our graduates from engineering background
customized products for the corporate customers. Other would contribute to the country’s development. We also
core strength is our distribution channel. We have around have a vision to manufacture four wheelers.
300 showrooms and over 150 dealers all over the country.
These showrooms are our marketing hub. MBR: How would you opine about the growth of
Bangladeshi motor cycle market?
MBR: What is the current demand of Bike due traffic
situation in Bangladesh?
Amid Sakif Khan: The sustainability is very difficult
in this industry. Many companies emerged with good
Amid Sakif Khan: Demand of the bike has increased after
products and faded away with the time. Bangladeshi RMG
Uber & Pathao have introduced ride sharing app in Dhaka
has a huge market worldwide and we aspire to reach that
city but overall the industry for bikes are growing. In
level as automobile manufacturer. The government’s policy
Bangladesh, 100cc bike has the biggest segment. Yamaha
is proved very favorable for the motorbike manufacturers.
and Suzuki cater the racing segment. Hero and Bajaj serve
We got the approval to manufacture up to 500cc bikes
both commuter and racing segment. Runner is no different
than those companies; however, it caters the customers locally for the export market. So far we have only worked
with affordable bikes. Runner is focused on serving quality up to 150 cc bikes and manufacturing, 180cc, 200cc, 250cc,
products with affordable pricing. We have servicing center 300cc and 500 cc bikes are the next steps for us. We are
1.5 times more than the showrooms we have all over the customizing our products according to the climate of
country. We provide genuine services and components the countries we want to export. So far government has
within the affordability of the customers. We could make supported us immensely. We expect that government
it possible due to favorable government policies for the would continue helping us to expand the industry. A
manufacturers. collective support can only make an industry successful.

21 of 36
 KEY
INFO
Private credit growth Remittance inflow up Inflat
slumps Gen
at 14.95% 7.70% 5.43
in August'18 y-o-y in July

IMPORT MONETARY AND

CREDIT DEVELOPMENTS
10%
17% Industrial raw materials 34%
10% 2672.9
Intermediate goods 10% Net Foreign Assets of banking system

8% Consumer goods 10%

Others 17%
8566.7
Net Domestic Assets of banking system

14% Petroleum & petro.prodts. 8%

34% Machinery for misc. inds. 14% 1433.9
Currency outside banks
8% Capital machinery 8%
9705.6
Deposits

REMITTANCE 2017-18 2016-17

1.16 Oct 1.01

1.21 Nov 0.95

1.17 Dec 0.96

1.38 Jan 1.01

1.14 Feb 0.9

1.3 Mar 1.08

22 of 36
 ECONOMY AT
tion rate Down
neral inflation
A GLANCE
3% in September 18 SEEING ECONOMIC
TREND IN DATA
SPREAD OF ADVANCE LIQUIDITY POSITION OF
& DEPOSIT RATE THE SCHEDULED BANKS
0.57%

8.40%
4.5 Specialised Banks
10.65% State owned Banks
4.46
4.45 4.45
4.44
4.4 4.41
Private Banks
4.4
38.34% (Other than Islamic)

4.31
Private Banks (Islamic)
Foreign Banks
4.27 4.27 42.04%

Oct-17 Nov-17 Dec-17 Jan-18 Mar-18 Apr-18 May-18 June-18 July 18 Aug 18 Sep 18
Total Liquidity Assets for December 2015 was BDT 2577.94 Billion

INFLATION EXPORT

Non-Food Inflation (point to point) Food Inflation (point to point)

2% 40%
7.87% 7.62%
7.32% 7.62%
7.09% 7.13% 7.27% 7.09% 7.03%
6.56%
4.87% 6.18%
5.97%
JUTE WOVEN GARMENTS
5.45%

4.73% 5.42%
4.08% 4.49%
4.10% 3.85% 5.98%
3.75% 3.61% 3.49%
3.44% 3.36% 3.52%
3.23%
42% 1% 14%
19%

Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 KNITWEAR FROZEN FOOD OTHERS
Inflation rate in March 2018 decreases as food inflation falls

23 of 36
 MS. SARA ZAKER
TRAILBLAZERS VICE CHAIRPERSON, ASIATIC 3SIXTY AND THEATRE PERSONALITY

Ms. Sara Zaker

Vice Chairperson,
Asiatic 3Sixty and theatre personality
Ms. Sara Zaker has a diversified professional career fulfilling roles of theater personality, TV actress,
entrepreneur and social activist. In a one-to-one conversation with her, MBR had an endeavor to
portray her action-packed life and be enlightened about her take about advertising industry and youth
development.

Childhood and germination of Creativity She studied in Viqarunnisa Noon School. When
in Holy Cross College, she joined Nagorik Natya
Ms. Sara Zaker was born to Mrs. Alia Amin (a school Sampradaya; and so, started her life on stage. She later
teacher) and Late Retd. Major S.M. Amin. Her initial did her Honours and Masters in English Language and
schooling started in the Army cantonment. Soon Literature from Dhaka University.
afterward her father moved to Dhaka after an early
retirement from the Armed Forces in 1962. Sara was Prelude to Stage:
the third one of the four siblings.
Back in those days, Viqarunnisa Noon School had
Although army families have an orientation of being only English as their medium of education. Since she
disciplined and restrictive, her family, nurtured an came from English Medium background, her grip on
environment which was more supportive towards Bangla was somewhat compromised. Then came the
cultural and other extracurricular activities. The free Liberation War in ‘71. Sara joined Stage in the post-
spirit of intellectual minds of the parents of Sara liberation years of ‘72 and ‘73. As the story goes, her
Zaker had a greater impact on her childhood than the father was convinced by his friend’s advice (Sector
harsh army discipline. She started showing a knack Commander Colonel Zaman) and deemed it was
for cultural activities long before she entered into the important for Sara to be well versed in Bangla. In a bid
theatre after her SSC in 1972. to improve her Bangla, Sara was encouraged to join in

24 of 36
Nagorik Natya Sampradaya. That is how her career in Stage Theatre is the mainstay
theatre got off the ground.
At this juncture, after forty-five years on the stage,
Tampering mass media: there is no doubt that STAGE is the mainstay in Sara
Zaker’s life of creativity.
Sara Zaker started having experience and expertise
in theatre in the 70s and 80s, but she never nurtured Stage Theatre was the most popular mode of
any interest for acting in TV dramas. In the 70s and entertainment during 70s-80s and even 90s. However,
80s, her presence on TV drama was limited. In early
‘Natok’ on stage is becoming more and more niche
90, she took up the challenge of working in Oyomoy a
as other option of entertainment, such as shopping
long drama serial of Mr. Humayun Ahmed. She is still
and eating in the malls, being entertained by channel
remembered for the role she played as Elachi Begum.
programs and YouTube on cell phones. What with the
Ms. Sara believes that being in theatre has its charms movies in cineplexes has taken over of the psyche of
and challenges, however in order to be on top of the youth.
mind of the audience one needs to dabble in the mass
media, or else he/she goes out of the radar of the Sara Zaker believes that Stage Theatre will always
general audience. This thought kept her going as a be niche, as it is in the other countries of the world.
column writer in ‘Prothom Alo’ for long fifteen years However, with the burgeoning population of the Dhaka
--- “Shubondhu Shomipeshu”. And as a continuum, Metro, it would be healthy if the percentage of the
she played the role of an anchor on a television mental population visiting the Theatre Houses should remain
health show ‘Ami Ekhon Kee Korbo’ for long five years. the same i.e. if it was four percent of the population

25 of 36
who were theatergoers in the Dhaka City in the 80 s,
it should be the same four percent in the third decade
of the 21 st century, in Dhaka City. And in order to
achieve that Stage Theatre needs to be dynamic in its
activities and promotional practices.

Corporate houses such as IDLC, BRAC Bank and

Unilever are taking positive steps to bring back the
glory of the stage and attract ‘first-time’ audience to
“Life is a precious”
the stage. The Government of Bangladesh has played
Sara Zaker believes there is no particular incident
a tremendous role to promote theatre with the limited which can be the most memorable because she
budget that is allocated to them. More of state and considers each moment of her life is memorable.
corporate support is required to place Stage on its What she got from this life has been a bundle of joyful
well-earned pedestal. energy. She had been with drama for long forty-five
years. She never thought she would be a social activist
Sara Zaker wants to make a considerable audience or a women’s rights activist when she was a child or in
base for theatre. Alongside, she feels that theaters her teems. Life was totally different in those days from
should come up with new strategies, use digital media what it is now. As life unfolded before her, she realized
and use other ways to advertise the plays. that her Stage Plays, her Entrepreneurship in Asiatic
3sixty, her Women Activist agendas, made her what
she is today. So, life itself is a memorable journey for
We want to make sure people her and a precious one.
do not get disheartened when
Recreation
they come to the theatre after
being stuck at traffic jam for Sara Zaker reads books in her free time. Reading
books require a relaxed mind which becomes a bit
hours. We have to move with difficult for her as she is occupied with so many tasks,
the times in terms of the quality yet she tries. She also likes to take a stroll in the park,
listen to music or standup comedy while she is doing
of our plays and also make use her rounds in the park.
of smart communication to
Most of all she likes to spend time with family and
attract more audience to the friends and “have an adda”; an English term for which
theatre hall.” is hard to find!

26 of 36
27 of 36
INDUSTRY

UPDATE
TELCOS SPEND TK 104CR ON DIGITAL
MARKETING
Spending on Digital Ad
B T R C
TELECOMMUNICATION & Campaign (2017-18)
confirmed BDT
43.31
104 crore spending on ‘Digital Campaign’ by
top mobile operating companies. Grameenphone
remained the top paymaster with a spending of
BDT 43.31 crore, followed by Robi (BDT 32.14
32.14
crore) and Banglalink (BDT 28.65 crore). Rising
popularity of digital media over traditional media 28.65

is the key force behind the scenario as it is cost

effective. Due to Digital Marketing’s rapid growth,
the telecommunication regulator will introduce
an advertising guideline on social media e.g.
Facebook, Twitter, Instagram, Viber, WhatsApp,
Imo, YouTube, Google and so on. The government
wants to bring transparency in Digital Marketing
sector to protect a huge sum of money to stay at
home. GP Robi Banglalink

PHARMACEUTICAL
CONFIDENCE POWERS PHARMA
EXPORTS

Pharmaceutical recognized as ‘product of the year

2018’ bagged USD 103.46 million to home; a consequence
of strong manufacturing base and skilled manpower in
the sector. Bangladeshi manufacturers meet 98 percent of
the local demand having a market size (local) of BDT 200
billion. The US, the UK and Australia are the sector’s export
hotspot including 151 other destinations. Exporters are
reckoning their export volume to grow significantly by the
full- fledged trade of Active Pharmaceuticals Ingredients
(API) - on which the government has declared 20 percent
cash incentives. Patent cost exemption facilitated the
sector to lower the production cost. Massive investment in
research is needed to help flourish the sector further with
the growing recognition of Bangladeshi pharmaceutical
products in global market.

28 of 36
KOREAN AUTOMOBILES EYE
BANGLADESH MARKET
Sale of Korean automobile
AUTOMOBILE in Bangladesh soared by
20 percent in last three years due to import of
brand new cars and its affordable pricing. Korean
cars gained popularity in the country for its
sophisticated design at competitive price. In 2017,
BRTA registered 21,959 Korean cars from 21,062
units in 2015. Demand for cars are increasing as
each year 2 million Bangladeshis are promoted
to middle and affluent class according to Boston
Consulting Group (a US based multinational
management consulting firm). KIA- a Korean
automobile company anticipates to grow its
market share in Bangladesh. At present, Hyundai
has an assembly plant at Kalurghat in Chattogram
and the company expects to manufacture cars in
the same plant in next five years.

COTTON CULTIVATION
STEPS UNDERWAY TO BOOST
COTTON YIELD
The government plans to expand country’s
cotton production to 2.5 lakh bales from 1.65

Cotton Production bales (last fiscal year’s production) in next five years
to curb dependency on cotton import. The Cotton
2018 1.65 Development Board (CDB) will utilize lands in hilly
and char areas to cultivate cotton and as part of the
2017 1.56 goal, the board is providing BDT 15,000 per head to
boost cotton farming from an allocated fund of BDT
2016 1.53 5 crore. Local yarn producers and spinners spend
USD 3 billion on cotton import, making the country
2015 1.52 the largest cotton importer in the world. The country
imports 50% of cotton from India due to low price.

2014 1.44 However, the CDB expects to meet 5-7% of the local
demand annually by using hybrid seeds.

29 of 36
 MONTH IN BRIEF

Country’s Remittance The 1.5% slash in

household soared 31.57% government’s tax loan- deposit
debt plunged to USD1.12 revenue dived to ratio to 83.5% by
to 3.3% of GDP billion year- BDT 582 million BB and upcoming
in 2018 from its on-year in in Q1 from BDT national election
peak 5.1% in September as pulled down
831 million in
2005, according taka depreciated
previous year due private credit
to the Institute 3.68% against
to slothful trading growth to 14.95%
of International USD
Finance’s data activities. in August’18.

Foreign Investors' Turnover in Stocks Net foreign Bangladesh

investment in ranked 5th with
1147.43 1099 80 million users
1031 965 premier bourse
881 856.78 among top internet
755 hits BDT 459.85 using countries in
357.99
459.85 crore as investors Asia, led by China
purchased (Tk. with 772 million
247.51 crore) stocks internet users,
according to the
more than they sold
Jan Feb Mar Apr May June Jul Aug Sep Internet World Stats
(BDT212.34 crore). data

The country’s Country’s Country’s trade Bangladesh

export earnings export earning discrepancy bagged USD
from merchandise witnessed 41 billion by
goods exceeded swelled by
142% growth exporting 744
the target of 19.30% as import goods and
14.74% to in Q1 mainly
on the back of payment rose by products to 202
USD3.14 billion
countries in FY
in September’18, RMG export, 5.66% to USD
confirms the 2017-18, confirms
according to 8.82 billion
Export Promotion Commerce Minister
Export Promotion
Bureau (EPB) data. Tofail Ahmed
Bureau data

30 of 36
 MONTH IN BRIEF

Inflation fell to 18 months low NRB waived Pran confirmed

of 5.43% in September’18 riding on 15% VAT on export order
the back of nonstop decrease in food worth around
local compressor
prices
production USD 5.25 million
Inflation
through the
although 25%
5.88
5.71
5.68 exposition of more
5.63
custom duty (CD)
5.57
5.54 than 500 products
5.51
5.48
5.43
being unchanged at Sial Food Fair,
world’s one of
the largest food
Jan Feb Mar Apr May Jun Jul Aug Sep
exhibition

Community 13 banks Brac Bank RMG export to

bank gets the undergone inaugurated the USA soared
agent banking
final approval of EPS shrinkage by 5.83% to
to serve the
Bangladesh Bank due to huge unbanked USD 4.17 billion
as 59th scheduled provisioning population and mainly due to
against elevate rural the increasing
bank among economy, aiming
defaulted loans Christmas
four banks in the to recruit 5,000
spending by the
pipeline agents in five
years Americans

The country’s foreign borrowings soared The country’s Banks’

by 141% to USD 54.73 billion in June’18 from agro product capital
USD 38.88 billion in March’16 due to higher
export bagged adequacy
short- term foreign debt of total debt.
BD's External Debt Fiscal Year- End Stock (In Billion USD)
USD 635 million ratio fell to
in FY 2017-18 10% in Q2
42.5
36.2
33.82

from 27% higher from 10.11%

than that of as banks’
12.23

FY’17 (USD 500 asset quality

9.03
6.98

million).
2016 2017 2018 waned
Source: QFSA Report April- June 2018, BB

31 of 36
 For the Record

“TIME WILL COME WHEN “To ensure the optimum

THERE WILL BE NO use of limited resources
we need to take up
VILLAGES IN THE COUNTRY projects based on study
OUT OF THE RANGE OF outcome”
AGENT BANKING” Ziaul Islam, Senior secretary of the planning
division, on Govt approves record number of
SIR FAZLE HASAN ABED, chairman of Brac Bank, on projects in a calender year
inauguration of its agent banking services

“THE GOVERNMENT
“Our “Bangladesh
has been HAD BEEN GIVING
board has
growing SPECIAL CASH
unanimously
faster among INCENTIVE FROM
given final
the Asian TWO PER CENT
approval to nations over TO 20 PER CENT
the proposed the years, ON 35 PRODUCTS
Community and this WITH A VIEW TO
growth has
Bank ENSURING EXPORT
attracted us,”
Ltd after VALUE MORE
Rambo Huang, department

scrutinizing
manager for international COMPETITIVENESS”
sales of Quanzhou
City Sanlian Machinery Tofail Ahmed, Commerce Minister, on
all relevant Manufacture (SL Machinery) country’s export

documents” “WE HAVE BEEN RUNNING THIS BUSINESS

SINCE 1996, MOSTLY IMPORTING FROM
Md. Serajul Islam, BB
CHINA, AND NOW IT IS TIME TO MOVE FOR
spokesperson and executive ASSEMBLING”
director, on proposition of new Md Oliullah, managing director of Al Amin Brothers, on inauguration of
banks mobile handset assembling plant in Gazipur

32 of 36
33 of 36
CAPITAL MARKET REVIEW MONTHLY MARKET STATISTICS

Monthly Commentary:
During the month of October, Market experienced During the month, few major sectors managed to close
some correction, extending the losing streak from in positive territory. Among them, Telecommunication
the previous month. Though the broad index, DSEX yielded the highest return appreciating by 2.6%.
started the month in positive territory, it lost 84.8 The sector’s large cap scrip GP advanced by 2.5%.
(-1.6%) points and settled at 5,284.1 points by the Besides, Bank and Textile increased by 1.7% and 0.9%,
end of the month. At the same time, DS30 settled at respectively during the month. On the contrary, Non-
1,878.0 points with 11.7 (-0.6%) points loss and DSES Life Insurance (-9.0%), Cement (-8.9%), Engineering
settled at 1,225.5 points with 16.6 (-1.3%) points loss. (-6.9%), Life Insurance (-6.5%), and Fuel & Power
(-2.6%) had the highest selling pressure.
Likewise, market participation decreased during the
month with an average turnover of BDT 5.5 bn (USD Meanwhile, MSCI Frontier Markets Index was down
66.0 mn), a 25.2% decrease from that of the previous by 3.5% during October. Sri Lanka, and Pakistan both
month. Fuel & Power sector was the turnover leader gained 1.6%, while Vietnam lost 10.1% this month. So,
with 20.0% contribution to the month’s average Pakistan and Sri Lanka outperformed Bangladesh this
turnover. Textile followed next, contributing 17.4%. month.

Monthly Market Statistics l

Table: Index Movement

Index Point,
Indices 1M Return 3M Return YTD Return 3Y Return
October 2018

Bangladesh

DSEX 5,284.1 -1.6% -0.3% -15.4% 15.8%

DS30 1,878.0 -0.6% -0.2% -17.7% 8.8%

DSES 1,222.5 -1.3% -2.3% -12.1% 11.9%

Peer Countries

Pakistan (KSE 100) 41,649.4 1.6% -2.5% 2.9% 21.6%

Sri Lanka (CSE - All Share) 5,953.5 1.6% -3.2% -6.5% -15.5%

Vietnam (VNI) 914.8 -10.1% -4.4% -7.1% 50.6%

MSCI Frontier Markets Index 521.1 -3.5% -9.1% -18.3% -2.0%

All returns are Holding Period Return

Table: Market Statistics (October, 2018) Graph: DSE Turnover and DSEX

Market Statistics 31-Oct-18 30-Sep-18 % change

Mcap All (USD mn) 45,819.7 46,235.4 -0.9%

Mcap Equity (USD mn) 38,835.3 39,237.2 -1.0%

Daily Avg. Turnover (USD mn) 66.0 88.3 -25.2%

34 of 36
Table: Top Twenty Market Cap (October, 2018)
Mcap1 Daily Avg. Turnover
DSE Code Sector 1M Return 3M Return YTD Return 3Y Return
(USD Mn) (USD Mn)

GP Telecommunication 6,116.2 0.8 2.5% 0.6% -15.0% 74.9%

BATBC Food & Allied 2,381.3 0.0 -1.3% 1.6% -0.4% 17.9%

SQURPHARMA Pharmaceuticals & chemicals 2,185.9 1.2 -2.0% -0.1% -11.5% 33.5%

UPGDCL Fuel & Power 1,824.4 3.1 -5.1% 15.0% 150.0% 247.5%

RENATA Pharmaceuticals & chemicals 1,064.2 0.1 3.9% 2.1% 13.3% 42.1%

ICB NBFI 956.2 0.1 0.6% -9.0% -20.8% 10.6%

BRACBANK Bank 900.5 0.6 -1.9% 7.2% -18.8% 142.9%

LHBL Cement 617.7 0.3 -14.1% -18.6% -36.2% -45.4%

BERGERPBL Miscellaneous 679.4 0.1 -1.8% -3.0% 19.9% 27.1%

SUMITPOWER Fuel & Power 557.8 2.6 7.1% 13.5% 22.0% 47.5%

OLYMPIC Food & Allied 521.0 1.1 6.6% 5.8% -24.2% 1.5%

KPCL Fuel & Power 493.3 5.9 -3.6% 67.9% 95.7% 79.8%

ISLAMIBANK Bank 451.2 0.1 -0.8% 3.1% -33.0% -2.3%

TITASGAS Fuel & Power 450.7 0.1 -3.3% 0.0% -13.6% -38.9%

MARICO Pharmaceuticals & chemicals 447.0 0.0 0.7% 5.3% 12.2% -16.5%

BXPHARMA Pharmaceuticals & chemicals 367.1 0.3 -7.4% -13.9% -26.9% 16.5%

CITYBANK Bank 367.1 0.5 -0.9% 6.4% -40.2% 86.2%

MJLBD Fuel & Power 372.0 0.2 1.9% 3.4% -5.2% 52.3%

IFADAUTOS Engineering 309.1 1.7 -8.6% -4.7% -7.1% 120.1%

DUTCHBANGL Bank 318.4 0.1 7.5% 13.6% -12.8% 38.5%

All returns are holding period return

1Mcap as on last trading session of the month

Table: Top Ten Gainers’ List (October, 2018) Table: Top Ten Losers’ List (October, 2018)
DSE Code 31-Oct-18 30-Sep-18 % Change DSE Code 31-Oct-18 30-Sep-18 % Change
IBP 33.0 10.0* 230.0% BDAUTOCA* 258.2 436.0 -40.8%
SILVAPHL 26.9 10.0* 169.0% GBBPOWER 8.7 13.9 -37.4%
NORTHERN 668.7 325.8 105.2% WMSHIPYARD* 20.0 26.6 -24.8%
LIBRAINFU 879.6 635.6 38.4% NAVANACNG 48.1 63.7 -24.5%
ISNLTD 36.3 26.8 35.4% KPPL 17.8 23.1 -22.9%
BEACHHATCH 12.0 9.1 31.9% REPUBLIC 32.3 41.8 -22.7%
SHAHJABANK 31.7 24.4 29.9% LEGACYFOOT* 204.6 262.8 -22.1%
JUTESPINN 95.3 73.4 29.8% ARAMIT 386.4 496.3 -22.1%
SONARGAON 18.0 14.0 28.6% AZIZPIPES 144.7 184.5 -21.6%
ADVENT 41.1 33.3 23.4% STYLECRAFT 3224.9 4106.8 -21.5%
*IPO offer price of IBP and SILVAPHL *Represents post record date adjustment

35 of 36
Table: Top Ten Closed End Funds based on 5 years’ (CAGR) performance
Fund Price1 NAV1 Price/ Dividend NAV Return3 Redemption
DSE Code
Manager (BDT) (BDT) NAV Yield2 (%) Year
2018 YTD 2017 2015-17 2013-17

NLI1STMF VIPB 11.8 14.0 84.1% 11.9% -10.8% 31.8% 21.9% 19.3% 2022
SEBL1STMF VIPB 11.8 13.1 90.2% 11.0% -11.1% 31.1% 20.2% 18.5% 2021
GRAMEENS2 AIMS 11.8 18.2 64.8% 10.2% -3.4% 24.7% 13.6% 17.2% 2018
RELIANCE1 AIMS 9.1 12.8 70.9% 12.1% -3.1% 21.2% 13.5% 16.3% 2021
IFILISLMF1 ICB AMCL 6.8 8.0 84.6% 13.2% -9.1% 11.8% 10.3% 15.4% 2020
PRIME1ICBA ICBAMCL 5.7 7.7 74.2% 12.3% -12.0% 21.7% 12.5% 14.3% 2020
1JANATAMF RACE 4.4 10.7 41.1% 4.5% -5.4% 20.9% 13.0% 13.6% 2020
PHPMF1 RACE 4.3 10.5 40.8% 7.0% -5.7% 25.0% 13.8% 13.2% 2020
POPULAR1MF RACE 4.1 10.8 38.1% 4.9% -5.3% 22.7% 13.2% 12.9% 2020
PF1STMF ICBAMCL 5.2 7.5 69.2% 9.6% -12.5% 16.7% 10.9% 12.8% 2020

1
Price and NAV published on October 29, 2018;
2
On latest cash dividend declared
3
CAGR computed for respected periods, except for 2018, adjusted for dividend. YTD returns of funds debuting within the year represent return generated since debut, hence is not
directly comparable with return of funds that operated throughout the year.

Table: Fund Managers Performance Summary

Fund Managers’
Dividend NAV Return
Fund Manager AUM (BDT mn) P/NAV Ranking by Return1
Yield (%)
2018 YTD 2017 2015-17 2013-17 2017 2015-17 2013-17
RACE 30,793 41.3% 0.9% -5.6% 21.8% 12.7% 11.7% 5 4 4
LR Global 9,675 64.9% 10.3% -7.6% 23.3% 12.5% 9.5% 4 5 5
ICB AMCL 5,643 76.4% 7.1% -11.6% 16.5% 10.6% 11.9% 7 6 3
AIMS 4,036 65.9% 12.4% -3.4% 24.0% 13.9% 16.6% 3 3 2
VAML 2,775 74.1% 16.2% -12.8% 18.6% - - 6 - -
VIPB 2,011 88.1% 15.1% -11.0% 31.4% 20.8% 18.8% 1 1 1
SEML 1,542 80.1% 3.3% 3.3% 8.7% - - 9 - -
ATCP AMCL 770 76.2% 15.2% -3.1% 26.1% 16.2% - 2 2 -
CAPM 1,187 80.5% 2.6% 0.5% 10.8% - - 8 - -
AMC Industry
58,433 55.8% 5.7% -6.6% 21.3% 12.6% 12.1% - - -
(Closed end)
1
Position of the respective fund manager in the ranking of 6 managers by return in respective

Graph: Sector Return (October, 2018)

Sector Return (October, 2018)

Jute 56.4%
Telecommunication 2.6%
Bank 1.7%
Travel & Leisure 1.4%
Textile 0.9%
NBFI 0.0%
Food & Allied -0.66%
Pharmaceuticals & Chemicals -1.1%
Tannery -2.5%
Fuel & Power -2.6%
Miscellaneous -3.2%
Services & Real Estate -4.7%
IT -6.0%
Life Insurance -6.5%
Ceramics -6.5%
Engineering -6.9%
Paper & Printing -7.9%
Cement -8.9%
Non Life Insurance -9.0%

-27.0% -18.0% -9.0% 0.0% 9.0% 18.0% 27.0% 36.0% 45.0% 54.0% 63.0%

36 of 36
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