Lack of investor confidence remains the biggest obstacle to developing Bangladesh's corporate bond market, and restoring trust requires strict regulatory action against issuers who fail to honour coupon payments, Bangladesh Bank Governor Ahsan H Mansur said yesterday.

Without restoring investor trust, any attempt to deepen the bond market would be futile, he said at a seminar titled "Bond Market Development in Bangladesh: Challenges and Recommendations", jointly organised by Bangladesh Bank and Bangladesh Securities and Exchange Commission (BSEC) in Dhaka.

The governor pointed out that weak enforcement of existing rules has badly damaged confidence, particularly in cases where issuers have failed to pay bond coupons without facing consequences.

In developed markets, he said, even a single missed coupon payment is treated as a serious default that triggers regulatory action and reputational damage. "But in our country, there is hardly any consequence if a company fails to pay bond coupons. No one seems to care."

He added, "Such regulatory laxity discourages investors from participating in the market. Restoring trust would require not only stricter rules but also effective supervision and enforcement to protect investors."

He noted that three macroeconomic factors are critical for bond market development: stability, lower interest rates and controlled inflation. "Without progress on these fronts, the bond market cannot grow."

BSEC and DSE sources said several issuers, including Sea Pearl Beach Resort, Regent Textile and a number of banks, have failed to make timely coupon payments, yet punitive action has been limited.

Questions have also been raised over compliance issues surrounding certain bond issuances, such as the Beximco Green Sukuk, further weakening investor confidence.

At the seminar, Mansur formally unveiled a concept note on bond market development prepared by a high-level committee formed following the chief adviser's directive. The concept note outlines the current challenges facing the bond market and proposes a phased reform roadmap extending to 2030.

Excessive reliance on bank loans

The governor said the central bank may consider discouraging excessive reliance on bank loans. If a company or business group seeks loans beyond the single borrower exposure limit, banks could suggest raising funds through bonds or equity instead, he added.

However, he cautioned that such measures should be implemented carefully and only alongside reforms that make the bond market more accessible and attractive. He also highlighted several pull factors to attract issuers, including tax incentives, shorter issuance timelines and lower costs.

Govt should introduce funded pension schemes

According to Mansur, the government and the business community must take the lead in developing the bond market, but the first step is to make it more protective and user-friendly so that both issuers and investors feel confident participating.

To broaden investor participation, Mnsur said the government should introduce funded pension schemes instead of non-funded ones, as pension funds can act as stable, long-term investors in bonds.

He also suggested forming a central coordination committee, supported by several sub-committees, to improve cooperation among regulators and ensure effective implementation of reforms.

Another proposal put forward by Mansur was allowing national savings certificates to be traded in the secondary market. He argued that if savings certificates become tradable, the overall bond market size could double, while giving savers greater liquidity and flexibility.

Bank loans still favoured: BSEC chairman

BSEC Chairman Khondoker Rashed Maqsood said bank loans remain easier to obtain than capital market financing in Bangladesh, which explains why companies continue to rely heavily on banks.

He said non-performing loans have risen partly due to mismatches between loan tenures and funding sources. The concept note, he said, recommends encouraging both the government and corporates to tap the capital market more actively.

After gathering feedback from stakeholders, BSEC plans to finalise new regulations to support bond market development, he added.

Govt working to attract foreign investors: Finance secretary

Finance Secretary Khairuzzaman Mozumder said that although the longstanding issue of double taxation on bonds has been resolved, new challenges have emerged in secondary trading due to frequent changes in ownership.

He described these as largely software-related problems that cannot be addressed manually at every stage, stressing the need for coordination between the National Board of Revenue and BSEC.

He also said the government is working to attract foreign investors to local currency bonds and has formed a committee to introduce secondary trading of savings certificates.

Private sector caution against restrictions

Uzma Chowdhury, corporate finance director of Pran-RFL Group, said that restricting bank loans could harm businesses if alternative financing channels are not sufficiently developed.

She argued that many private sector firms are reluctant to go to the capital market because they are reluctant to share profits, disclosure requirements and restrictions, and that further constraints could discourage investment rather than promote bond issuance.

Mashrur Arefin, president of the Association of Bankers Bangladesh and managing director of City Bank, stressed the importance of allowing foreign investors to freely repatriate bond investments.

He said bond market development would remain limited unless the policy rate is reduced and valuation mechanisms in the secondary market are simplified for retail investors. Imposing caps on private sector borrowing without a functional bond market, he warned, would only increase pressure on businesses.

80% debt financing from banks: Concept note

According to the jointly prepared concept note, Bangladesh's financial system remains overwhelmingly bank-centric, with about 80% of debt financing coming from banks.

Around 70% of bank deposits mature within a year, creating maturity mismatches and liquidity risks. The corporate bond market remains underdeveloped due to the dominance of bank financing, high issuance costs, complex regulations, weak appetite for non-sovereign debt, poor enforcement and the crowding-out effect of high-yield government savings certificates.

As of June 2025, Bangladesh had only 16 listed corporate bonds, 14 of which were issued by banks mainly to meet regulatory capital requirements. The total corporate bond market size stood at Tk33.34 billion, accounting for just 0.06% of GDP, compared to 5.73% for government bonds. In contrast, peer countries such as Malaysia, South Korea and China have bond market-to-GDP ratios exceeding 100%.

The concept note recommends phased reforms, including streamlining issuance procedures, offering targeted tax incentives, expanding the investor base, strengthening legal frameworks and improving secondary market liquidity through coordinated regulatory action. These reforms are planned over the short term by December 2026, the mid-term by 2027 and the long term by 2030.

Garment buying house entrepreneurs have warned that the commerce ministry's proposal to withdraw bonded warehouse facilities on the import of yarn of 10 to 30 counts could harm the country's readymade garment (RMG) sector and unsettle international buyers.

They described the proposal as "self-destructive" and urged the government to offer alternative support to domestic textile millers instead of withdrawing bonded facilities.

The concerns were raised at a press conference titled "The Country's Readymade Garment Industry in Crisis: A Struggle for Survival", organised by the Bangladesh Garment Buying House Association (BGBA) at its office in the capital today (25 January).

BGBA President Mohammad Mofazzal Hosen Pabel said the proposed decision had pushed the RMG sector "to the brink of death" and had triggered serious concerns among global buyers.

For several months, the country's textile millers and garment manufacturers have been at odds over duties and restrictions on yarn imports from India and other countries.

On 12 January, the commerce ministry requested the National Board of Revenue to withdraw bonded warehouse facilities for importing 10-30 count yarn, citing the need to protect domestic spinning mills.

The request followed appeals from the Bangladesh Textile Mills Association (BTMA) and recommendations from the Bangladesh Trade and Tariff Commission.

However, RMG sector leaders alleged that the commerce ministry's move was one-sided. Several textile and garment sector associations have held press conferences and sent letters to the government strongly opposing the move.

"Several buyers have expressed concern over the ongoing discord between the country's RMG and textile sectors," Pabel said, adding that many had already begun shifting their 2026 orders to competing countries.

He said global buyers and large retailers were increasingly worried about the overall business environment in Bangladesh, including political instability and security concerns.

"Buyers have expressed worries over safety, factory closures and reports of frequent mob violence," the BGBA president said, adding that disputes over yarn imports would further damage confidence.

Pabel also alleged that competitor countries were portraying Bangladesh negatively in global markets and that some buyers had imposed travel restrictions on visits to the country.

Responding to a question, he said any disruption to the RMG sector would ultimately affect buying houses, which act as a bridge between international buyers and local manufacturers.

Opposing the withdrawal of bonded facilities, he urged the government to provide incentives and policy support to make the textile industry more competitive.

"The government should make the spinning sector self-reliant so that RMG manufacturers can buy yarn from domestic sources at prices even 30 cents lower," he added.

He also said the association expected the next elected government to consult all relevant trade bodies on policy decisions affecting the textile and garment sectors, rather than holding discussions with a limited number of organisations.

Joint consultations would help identify core challenges and future prospects and lead to sustainable solutions, he said.

"As spinners are demanding the withdrawal of bonded facilities, it shows they are facing problems, while cutting bonded facilities would affect RMG manufacturers. Only joint dialogue can lead to solutions," he added.

Pabel said every policy decision carried both positive and negative consequences, but argued that the proposed move was taken through an unfair process involving only a few parties.

He warned that while some groups might benefit initially, the decision could prove harmful in the long run, particularly if export orders decline and begin to affect the textile sector as well.

Bangladesh's e-commerce sector has moved far beyond its early days of scepticism, emerging as a fast-evolving part of the country's digital economy.

At the center of this transformation is Daraz Bangladesh, the country's largest online marketplace.

Ben Yi, chief commercial officer of Daraz Group and managing director of Daraz Bangladesh, has overseen a year of steady operational upgrades, trust-building initiatives, and ecosystem development.

In an interview with Abbas Uddin Noyon of The Business Standard, he reflects on Daraz's journey, the lessons learned, and why he believes Bangladesh is approaching a new phase of e-commerce maturity.

Bangladesh's e-commerce journey has moved from low trust to much wider adoption. What were the most important shifts behind this transition?

Several factors came together. Smartphone penetration and digital wallets expanded rapidly, logistics became more convenient, and marketplaces grew as more sellers joined. This is a natural evolution seen in many countries. Bangladesh is still in an early stage e-commerce accounts for only about 2-3% of total retail but the potential is significant.

We can easily reach double-digit penetration in the coming years. At Daraz, we focused on shortening delivery times, introducing single-warehouse fulfillment, and improving reliability, which made online shopping faster and more convenient for consumers.

Looking back at 2025, what were the defining moments for Daraz Bangladesh?

There wasn't a single defining moment. Instead, 2025 was shaped by consistent progress through many small, detailed improvements month after month. These efforts reduced logistics lead times, lowered costs, and strengthened our commercial strategies, including building our Everyday Low Price (EDLP) channel and enhancing Flash Sales. We applied Alibaba's global experience through technology and product innovation, while adapting it to Bangladesh's market reality. This steady approach delivered strong results throughout the year.

Customer trust remains a major challenge. Why did Daraz decide to extend its return policy to 14 days across the entire platform?

Trust is fundamental to e-commerce growth. In Bangladesh, past market incidents made many consumers cautious about shopping online. Extending the return window to 14 days across the entire platform was a deliberate decision to address this directly. We want customers to feel protected and confident that Daraz will support them through refunds, replacements, or resolution if something goes wrong. This reinforces our long-term commitment to making online shopping safer and more reliable.

DarazMall has become central to your authenticity strategy. How does it work, and what impact has it had?

DarazMall is our crown jewel, inspired by Alibaba's Tmall. While we maintain strong quality controls across the entire platform, DarazMall verifies that sellers are reliable brand owners committed to long-term service and authenticity. We strengthened governance, added more brands, and introduced flagship stores with clear Mall tags for quicker purchase decisions. Our Authenticity Guarantee ensures replacement and three times cash back if a product is proven fake. This has significantly boosted customer confidence and brand performance in 2025.

How are you supporting sellers, particularly SMEs, to succeed in digital commerce?

From the beginning, we focused on building a strong seller ecosystem. Tools like backend systems, Daraz University, and incentives such as free delivery and virtual bundles help simplify selling. This allows SMEs to focus on sourcing quality products and managing supply chains.

Going forward, we are integrating AI tools to optimise listings, improve content relevance, and streamline buyer interactions. Drawing on Alibaba's experience, we want to empower more sellers to build sustainable businesses on Daraz.

Daraz Express has grown into a major logistics operation. What is its current scale?

When we entered Bangladesh, reliable logistics were limited, so we built Daraz Express to ensure customer satisfaction. Today, it handles over 70% of our parcels, and we are expanding it as a service for external brands and partners. Our fully digitalised system offers real-time tracking, and we have reduced end-to-end delivery to around two days. We are also launching same-day delivery in Dhaka soon, supporting demand across all 64 districts.

What have campaign events revealed about Bangladeshi consumer behaviour?

Mega campaigns like 11.11 have been hugely successful, and we now work with brands to offer compelling deals on a monthly basis. Consumers value strong discounts on big-ticket items during campaigns, while also returning for daily essentials. Operationally, we scaled warehouses and logistics to handle volume surges. During the last 11.11, deliveries were nearly as fast as regular orders, which shows how far our capabilities have come.

Why has Daraz invested heavily in talent development and inclusion?

Our success depends on our people. By attracting top talent and investing in their growth, we are building future e-commerce leaders for Bangladesh. The Daraz Future Leaders Programme helps young graduates gain fast, cross-functional exposure, while the dWomen initiative promotes female leadership and diversity. Inclusive teams bring better ideas and stronger insights into consumer behaviour, which ultimately benefits the business.

What are the biggest regulatory challenges facing the sector?

E-commerce in Bangladesh is still at an early stage, with significant long-term potential. Clear, stable, and practical policies are essential to support growth. As the country's largest e-commerce platform, Daraz works closely with policymakers to share industry insights and highlight operational challenges and opportunities, including areas like cross-border commerce and SME support.

What excites you most about Bangladesh's e-commerce future?

I'm excited by Bangladesh's prospects for stable economic growth, increased foreign investment, and rising consumer incomes. Daraz aims to accelerate e-commerce penetration by improving speed, service quality, and assortment depth, while helping professionalise the industry. Our long-term vision is a trusted, mature e-commerce ecosystem that delivers the best shopping experience for consumers and sellers and contributes meaningfully to the broader economy.

The government has increased monthly allowances and expanded beneficiary coverage for 15 social safety net programmes (SSNPs) for the upcoming fiscal year 2026-27 (FY27), which begins in July.

The Finance Division announced the decisions in a press statement yesterday following the 32nd meeting of the Advisory Council Committee on SSNPs, chaired by the finance adviser.

However, the move has drawn criticism from policy experts, who questioned the timing as the interim government has less than a month remaining in office. They also noted that implementation will fall to the next elected government, which is likely to follow its own manifesto commitments.

WHO GETS HOW MUCH

Under the Ministry of Social Welfare’s old age allowance programme, the number of beneficiaries has been increased by 1 lakh to 62 lakh. Of them, 59.95 lakh elderly citizens will receive Tk 700 per month, up from Tk 650, while 2.05 lakh people aged over 90 will receive Tk 1,000.

Allowances for “widows and husband-deserted women” have also been raised. Of the 29 lakh beneficiaries, 28.75 lakh will receive Tk 700 per month, while 25,000 women aged over 90 will receive Tk 1,000.

For persons with disabilities, the total number of beneficiaries under the disability allowance and education stipend programme has been increased to 36 lakh from 34.5 lakh. Most will receive Tk 900 per month from FY27, while 18,100 beneficiaries will receive Tk 1,000.

Education stipends for students with disabilities have been increased by Tk 50 at all levels. The revised rates are Tk 950 for primary, Tk 1,000 for secondary and Tk 1,350 for higher education.

Under the programme for “improving living standards of backward communities”, the number of beneficiaries has increased by 7,000 to over 2.28 lakh, while the monthly allowance has been raised from Tk 650 to Tk 700.

The number of student beneficiaries from backward communities has also been increased by 3,198 to 45,338. For FY27, monthly stipends have been set at Tk 700 for primary, Tk 800 for secondary, Tk 1,000 for higher secondary and Tk 1,200 for higher education levels.

In addition, 5,490 beneficiaries will receive skills development training under the programme.

Beneficiaries under the financial assistance programme for patients suffering from serious illnesses, including cancer, kidney disease, liver cirrhosis, stroke, related paralysis, congenital heart disease and thalassemia, have increased by 5,000 to 65,000. The one-time medical assistance has been doubled from Tk 50,000 to Tk 100,000.

The “mother and child benefit” programme under the Ministry of Women and Children Affairs will cover more than 18.95 lakh mothers, an increase of 1.24 lakh, with a monthly allowance of Tk 850.

The “food-friendly programme” of the Ministry of Food will support 60 lakh families starting FY27, up 5 lakh, providing 30 kg of subsidised rice for six months at Tk 15 per kg.

The Advisory Council committee meeting also raised the monthly allowances for Gallantry Awards-winning freedom fighters and families of martyred freedom fighters by Tk 5,000.

At the meeting, it was recommended that the monthly honorarium allowances for the families of martyrs and the injured from the July Mass Uprising, which fall under the Ministry of Liberation War Affairs, and the Vulnerable Group Feeding (VGF) programme under the Ministry of Fisheries and Livestock, be brought within the purview of the committee on SSNPs.

The meeting further recommended that in FY27, an additional 273,514 fishermen be newly included, bringing the total number of fishermen under the VGF programme to 15 lakh.

Officials said these revisions aim to enhance social protection and address the needs of vulnerable populations ahead of the next fiscal year.

However, policy experts say otherwise.

Mustafa K Mujeri, executive director of the Institute for Inclusive Finance and Development (InM), said the interim government has less than one month. A new government will come, and they will implement their own programmes in line with their manifestos.

“At this stage, there is no justification for taking any such decision,” he said.

The interim government could hike allowances and the number of beneficiaries in this fiscal year to give a better cushion to low-income people struggling amid persistent inflation, he added.

Selim Raihan, executive director at the South Asian Network on Economic Modeling (Sanem), said the interim administration could have increased the social safety nets allocation at the beginning of this fiscal year when it had time, and the pressure of inflation was high.

US President Donald Trump on Saturday warned Canada that if it concludes a trade deal with China, he will impose a 100 percent tariff on all goods coming over the border.

Relations between the United States and its northern neighbor have been rocky since Trump returned to the White House a year ago, with spats over trade and Canadian Prime Minister Mark Carney decrying a “rupture” in the US-led global order.

During a visit to Beijing last week, Carney hailed a “new strategic partnership” with China that resulted in a “preliminary but landmark trade agreement” to reduce tariffs -- but Trump warned of serious consequences should that deal be realized.

If Carney “thinks he is going to make Canada a ‘Drop Off Port’ for China to send goods and products into the United States, he is sorely mistaken,” Trump wrote on his Truth Social platform.

“China will eat Canada alive, completely devour it, including the destruction of their businesses, social fabric, and general way of life,” he said.

“If Canada makes a deal with China, it will immediately be hit with a 100 percent Tariff against all Canadian goods and products coming into the USA.”

Trump insulted Carney by calling him “Governor” -- a swipe referring to the US president’s repeated insistence that Canada should be the 51st US state.

Trump this week posted an image on social media of a map with Canada -- as well as Greenland and Venezuela -- covered by the American flag.

Canada’s minister responsible for trade with the United States, Dominic LeBlanc, pushed back against Trump’s latest threat. “There is no pursuit of a free trade deal with China. What was achieved was resolution on several important tariff issues,” he wrote on X.

The two leaders have sharpened their rhetorical knives in recent days, beginning with Carney’s speech on Tuesday at the World Economic Forum in Davos, where he earned a standing ovation for his frank assessment of a “rupture” in the US-led global order.

His comment was widely viewed as a reference to Trump’s disruptive influence on international affairs, although Carney did not mention the US leader by name.

Trump fired back at Carney a day later in his own speech, and then withdrew an invitation for the Canadian prime minister to join his “Board of Peace” -- his self-styled body for resolving global conflict.

Initially designed to oversee the situation in postwar Gaza, the body appears now to have a far wider scope, sparking concerns that Trump wants to create a rival to the United Nations.

“Canada lives because of the United States. Remember that, Mark, the next time you make your statements,” Trump said.

Carney shot back on Thursday: “Canada doesn’t live because of the United States. Canada thrives because we are Canadian.” He nevertheless acknowledged the “remarkable partnership” between the two nations.

Canada heavily relies on trade with the United States, the destination for more than three quarters of Canadian exports.

Key Canadian sectors like auto, aluminum and steel have been hit hard by Trump’s global sectoral tariffs, but the levies’ impacts have been muted by the president’s broad adherence to an existing North American free trade agreement.

Negotiations on revising that deal are set for early this year, and Trump has repeatedly insisted the United States doesn’t need access to any Canadian products -- which would have sweeping consequences for its northern neighbor.

Matthew Holmes, executive vice president of the Canadian Chamber of Commerce, said in a statement that he hoped the two governments would “come to a better understanding quickly that can alleviate further concerns for businesses.”

The two nations, along with Mexico, are set to host the World Cup later this year.

The United States is in talks with Chevron, other crude producers, and major oilfield service providers about a plan to quickly raise Venezuela's crude production, Bloomberg News reported on Saturday, citing senior administration officials.

Officials have discussed deploying SLB, Halliburton and Baker Hughes to repair and replace outdated equipment, and refresh older drilling sites, the report said.

Reuters could not immediately verify the report. The White House, Chevron, SLB, Baker Hughes and Halliburton did not immediately respond to Reuters' requests for comment.

With limited investment, Venezuela could boost production by several hundred thousand barrels over the short term, the report said, adding that modern US equipment and techniques could revitalise existing wells and bring new production online within months.

US President Donald Trump said on Friday that US oil companies will soon start drilling for oil in Venezuela. Trump has been clear about his desire to boost oil production in Venezuela following the capture of the country's leader, Nicolas Maduro.

The Bangladesh Securities and Exchange Commission (BSEC) has rejected a 6% stock dividend proposal announced by Kay & Que (Bangladesh) for the financial year that ended in June 2025.

On 10 October last year, the engineering sector firm recommended a 4% cash and 6% stock dividend for its shareholders for FY25. The stock dividend component was subject to the approval by the BSEC.

According to its annual disclosure, the company had reported 1,316% growth in its earnings per share (EPS) for FY25, reaching Tk9.49 from Tk0.67 in the previous fiscal year.

The firm highlighted strong profitability growth in FY25, along with continued improvement in the first quarter of the current fiscal year. During the first quarter, its EPS rose 137% to Tk2.75, compared with Tk1.15 in the same period of the prior year, driven by higher sales turnover.

Today, Kay & Que's shares closed at Tk367.10 each, which was 0.43% lower than the previous trading sessions.

The company has recently made an "A2P Aggregator Agreement" with Robi Axiata, under which KAY & QUE will act as an A2P (Application-to-Person) Aggregator for Robi Axiata, providing services related to the delivery of SMS and notifications from various applications and digital platforms to end users. The company expects this partnership to positively influence its future revenue growth.

BSRM Limited reported that its consolidated net profit dropped by 11% year-on-year to Tk78.70 crore in the October to December of FY26.

Meanwhile, in the first half of this fiscal year, its consolidated revenue rose by 18% to Tk4,756 crore and the consolidated net profit inched up to Tk202 crore, compared to the previous year during the same period.

At the end of the first half, its consolidated earnings per share stood at Tk6.79.

The indices of Dhaka Stock Exchange (DSE) experienced correction for the third consecutive session yesterday as the cautious investors book profit as brief gain on the trading floor amid lingering political uncertainty ahead of the February election.

The benchmark DSEX index shed 27 points to close at 5,072. The blue-chip DS30 index fell 15 points to 1,948, while the Shariah-based DSES index declined 8 points to end at 1,018.

Market turnover edged down by 1.68% to Tk527 crore, compared to Tk536 crore in the previous session. Of the 392 issues traded, 107 advanced, 225 declined and 60 remained unchanged.

Market insiders said the stock market is hovering near the bottom as political uncertainty continues to weigh on investor confidence. In this environment, informed investors are selectively buying fundamentally strong stocks but opting for small, short-term gains rather than waiting for sizeable returns. This trend has led to frequent corrections after brief upward movements.

Despite the current volatility, participants are expecting a positive trend either before or after the election.

Over the past year, political uncertainty and several decisions taken by the market regulator were not well received by investors. Many investors exited the market, while a large portion of institutional and high-net-worth investors remained largely inactive. This situation pushed down the prices of even fundamentally strong stocks.

Analysts said political uncertainty remains the single most critical factor influencing market sentiment. Although expectations are that easing uncertainty could lead to a more positive market direction, the lack of full clarity has kept institutional and large investors cautious, limiting trading volumes.

They added that ensuring policy stability and restoring investor confidence could unlock strong recovery potential for the capital market in the coming period.

All major large-cap sectors closed in negative territory yesterday. The Food & Allied sector recorded the highest decline, losing 1.01%, followed by NBFIs with a drop of 0.95%. The Engineering sector fell by 0.67%, while Pharmaceuticals declined 0.62%. The Fuel & Power sector shed 0.49%, Telecommunication slipped 0.39%, and the Banking sector posted the lowest loss among large caps at 0.25%. Meanwhile, block trades accounted for 1.9% of the total market turnover for the day.

The Chittagong Stock Exchange (CSE) also closed lower, with the CSCX index dropping 8 points to 8,821, and the CASPI index decreasing 13 points to close at 14,247 reflecting negative sentiment across both major bourses.

BSRM Steel reported that its revenue jumped by 47% year-on-year to reach at Tk5,976 crore in the July-December of FY26.

According to the company's price sensitive statement filed on the Dhaka Stock Exchange today (25 January), its net profit rose by 10% to Tk193 crore during the first half of FY26, compared to the previous year during the same period.

At the end of first half, its earnings per share stood at Tk5.14.

Meanwhile, during the second quarter (October-December) its revenue grew by 31% to Tk3,339 crore and the net profit rose by 6% to Tk95 crore.

Garment manufacturers and investors in export processing zones (EPZs) have warned that a three-day general holiday around the upcoming national election could disrupt production and hurt exports.

The government has already declared February 10 to 12 as general holidays in industrial areas in connection with the national parliamentary election and referendum scheduled for February 12.

In response, the Bangladesh EPZ Investors Association has written to the Bangladesh Export Processing Zones Authority (Bepza), urging it to reconsider the plan. Bepza has said it is reviewing the matter in consultation with relevant stakeholders.

Khorshed Alam, executive director (Enterprise Service) of BEPZA, told The Daily Star that the authority received the EPZ investors’ letter yesterday and has already started discussions.

“We received the letter on Sunday. We will discuss the matter with all concerned parties, including relevant ministries, stakeholder associations, and factories inside and outside EPZs,” he said. “We will try to ensure that holidays in all industrial areas are observed at the same time during the election period.”

He added that BEPZA cannot take a decision on its own and that discussions are ongoing, with a final decision to be made at an executive board meeting.

In the letter, EPZ investors said enterprises in the zones follow production and shipment schedules agreed upon with international buyers months in advance, leaving little room for sudden changes.

Unplanned holidays, the association warned, would disrupt production, delay shipments and could result in penalties, order cancellations and loss of buyer confidence.

Garment factory owners outside EPZs raised similar concerns in a separate letter sent on Saturday to the secretary of the Ministry of Labour and Employment.

They said February already has fewer working days because of Shab-e-Barat, International Mother Language Day and weekly holidays. With the three additional holidays now declared for the election, the number of effective working days would fall to 19, which could seriously disrupt export-oriented garment production.

The letter also said global demand for garments has remained weak in recent months, with both orders and prices declining, forcing some factories to shut down. In this situation, factory owners are struggling to manage February wage payments and upcoming Eid-ul-Fitr bonuses.

Both garment manufacturers and EPZ investors have urged the government to consider declaring only election day as a mandatory general holiday in industrial areas. As an alternative, they suggested adjusting the holidays on February 10 and 11 against weekly or annual leave through an executive order.

The National Board of Revenue (NBR) is moving to fully automate value-added tax (VAT) and income tax refunds to make the process faster, more transparent, and less burdensome for taxpayers, NBR Chairman Md Abdur Rahman Khan said yesterday.

“Automated VAT refunds have already been introduced, and income tax refunds will follow the same path,” Khan said at a press briefing at NBR headquarters in Agargaon, held for International Customs Day.

He acknowledged that minor glitches might occur initially, saying such issues are inevitable when launching a new system. Similar problems were faced and resolved when e-return filing was introduced.

Refund disbursement has already started, which Khan called a “major development.” He added that automation will gradually extend to income tax refunds as well.

The main goal is to reduce direct interaction between taxpayers and officials. “The greater the distance, the greater the transparency,” Khan said.

According to him, the system would significantly reduce complaints, allow real-time tracking and ensure refunds are issued within a much shorter timeframe. If necessary, the law will be amended in the future to further strengthen the system.

Khan also said the government is working to rationalise overall tariff structure ahead of the country’s graduation from least developed country (LDC) status.

“A report on tariff transformation has been submitted to the chief adviser, including recommendations for reducing duties,” he said, adding that Bangladesh cannot maintain high tariffs after LDC graduation.

However, he said duties had been increased in some areas to protect domestic industries, while rejecting claims of frequent duty hikes.

“In the past one and a half years, we have not increased tariffs to raise revenue. Instead, in the public interest, we reduced duties on imports of rice, onions, potatoes, and soybeans,” he added.

Addressing concerns about rising fruit and import-dependent goods prices, Khan said the main reason is the sharp depreciation of the taka against the US dollar, not taxes or customs duties.

“The dollar has risen about 40 percent -- from Tk 80 to Tk 85 two years ago to around Tk 126 to Tk 127 now -- raising import costs significantly,” he said.

He added that no new duties were imposed on fruit imports during this period. “In fact, income tax on fruit imports was cut from 10 percent to 5 percent, and duties on date imports were reduced significantly,” he said.

On the planned restructuring of the NBR into two separate divisions, Khan said the matter will be finalised after a secretaries’ committee meeting.

“Once the division of responsibilities is decided, a gazette will be issued, and organograms and designations will be adjusted accordingly,” he added.

The NBR chairman also hinted at a possible extension of the January 31 deadline for individual income tax returns. “We will consider it if some registered taxpayers miss the deadline,” he said, adding that no final decision has been made.

Bangladesh’s economic outlook for 2026 points to a potential growth of around 5 percent, with expectations of easing inflation, as per a recent government report. However, structural challenges remain, which will require strong governance and policy consistency.

The report by the General Economics Division (GED) of the Bangladesh Planning Commission -- titled Economic Update & Outlook January 2026 -- notes that macroeconomic stability is expected to improve.

Despite that, sustaining growth will require investment in skills and technology to diversify the economy beyond garments. This step is particularly significant as the country approaches graduation from the least developed country (LDC) category and navigates an ongoing democratic transition.

Recent data show signs of recovery. Provisional quarterly national accounts estimates released by the Bangladesh Bureau of Statistics indicate that economic activity strengthened in the first quarter of FY2025-26.

On a point-to-point basis, real growth rose to 4.50 percent, up from 2.58 percent in the same quarter a year earlier. Provisional estimates also suggest overall GDP growth at constant prices reached 3.72 percent in FY2024-25, with final figures to be benchmarked against annual GDP using internationally accepted methods.

The GED report underscores the importance of a stable and reformed political environment, alongside effective integration of technology, to shift the economy from low-cost labour dependence to higher-value activities.

The report cautions that risks persist from institutional weaknesses and elite uncertainty. With progress on the Sustainable Development Goals remaining slow, it recommends evidence-based policymaking and targeted village-level interventions to support inclusive and sustainable development.

India plans to slash tariffs on cars imported from the European Union to 40% from as high as 110%, sources said, in the biggest opening yet of the country's vast market as the two sides close in on a free trade pact that could come as early as 27 January.

Indian Prime Minister Narendra Modi's government has agreed to immediately reduce the tax on a limited number of cars from the 27-nation bloc with an import price of more than 15,000 euros ($17,739), two sources briefed on the talks told Reuters.

This will be further lowered to 10% over time, they added, easing access to the Indian market for European automakers such as Volkswagen, Mercedes-Benz and BMW.

The sources declined to be identified as the talks are confidential and could be subject to last-minute changes. India's commerce ministry and the European Commission declined to comment.

'Mother of all deals'

India and the EU are expected to announce 27 January the conclusion of protracted negotiations for the free trade pact, after which the two sides will finalise the details and ratify what is being called "the mother of all deals.

The pact could expand bilateral trade and lift Indian exports of goods such as textiles and jewellery, which have been hit by 50% US tariffs since late August.

India is the world's third-largest car market by sales after the US and China, but its domestic auto industry has been one of the most protected. New Delhi currently levies tariffs of 70% and 110% on imported cars, a level often criticised by executives, including Tesla chief Elon Musk.

New Delhi has proposed slashing import duties to 40% immediately for about 200,000 combustion-engine cars a year, one of the sources said, its most aggressive move yet to open up the sector.

This quota could be subject to last-minute changes, the source added.

Battery electric vehicles will be excluded from import duty reductions for the first five years to protect investments by domestic players like Mahindra & Mahindra and Tata Motors in the nascent sector, the two sources said.

After five years, EVs will follow similar duty cuts.

Market currently dominated by Suzuki and local makers

Lower import taxes will be a boost for European automakers such as Volkswagen, Renault and Stellantis, as well as luxury players Mercedes-Benz and BMW which locally manufacture cars in India but have struggled to grow beyond a point in part due to high tariffs.

Lower taxes will allow carmakers to sell imported vehicles for a cheaper price and test the market with a broader portfolio before committing to manufacturing more cars locally, said one of the two sources.

European carmakers currently hold a less than 4% share of India's 4.4-million units a year car market, which is dominated by Japan's Suzuki Motor as well as homegrown brands Mahindra and Tata that together hold two-thirds.

With the Indian market expected to grow to 6 million units a year by 2030, some companies are already lining up new investment.

Renault is making a comeback in India with a new strategy as it seeks growth outside Europe, where Chinese carmakers are making strong inroads, and Volkswagen Group is finalising its next leg of investment in India through its Skoda brand.

The European Union has suspended Generalised Scheme of Preferences (GSP) tariff benefits for a wide range of Indian exports from January 1, a move expected to significantly raise duties on shipments to the 27-nation bloc and weaken India’s price competitiveness in key sectors, according to a report by The Hindu.

The suspension applies to the 2026-2028 period and covers India, Indonesia and Kenya, the Official Journal of the European Union said, citing a regulation adopted by the European Commission on September 25, 2025.

The decision comes at a sensitive time, as India and the EU are expected to announce the conclusion of negotiations for a free trade agreement (FTA) on January 27.

According to trade think tank Global Trade Research Initiative (GTRI), about 87 percent of India’s exports to the EU will now face higher most-favoured-nation (MFN) tariffs following the withdrawal of GSP concessions. Only around 13 percent of exports, mainly agriculture and leather products, will continue to enjoy preferential access.

Under the GSP, Indian exporters were able to ship goods to the EU at duties below MFN rates. For example, an apparel item attracting a 12 percent tariff paid only 9.6 percent under the scheme. From January 1, exporters must pay the full duty.

The EU has removed GSP benefits across almost all major industrial sectors, including textiles and garments, plastics and rubber, chemicals, iron and steel, machinery, electrical goods and transport equipment, which together form the backbone of India’s exports to Europe. While the EU has periodically reduced preferences in the past, this marks a complete withdrawal for three years.

GTRI Founder Ajay Srivastava said Indian exporters will face higher trade barriers in the near term, compounded by rising compliance costs and the rollout of the EU’s Carbon Border Adjustment Mechanism. He warned that in price-sensitive sectors such as garments, the loss of GSP could divert EU buyers toward duty-free suppliers like Bangladesh and Vietnam.

India’s goods trade with the EU stood at $136.53 billion in 2024-25, with the bloc accounting for about 17 percent of India’s total exports.

After repatriating a record amount of profit as dividends to its owners last year, Marico Bangladesh – a subsidiary of India-based multinational personal care major Marico Limited – is now set to remit Tk448 crore to India for the first nine months of the current financial year 2025-26.

In FY25, Marico repatriated over Tk1,000 crore to its owners in India as dividends. The dividend figure was an all-time high, according to company data.

Its financial statements show that in the first nine months, Marico's dividend payout ratio stood at 99.62%, meaning the company retained less than 1% of its profit and paid out almost its entire earnings as dividends.

During April to December – covering the first nine months of the financial year, as it runs from April to March – Marico Bangladesh posted a profit of Tk497.97 crore with earnings per share (EPS) of Tk158.09.

During the first nine months of the current financial year, it declared a 1,575% interim cash dividend based on its audited quarterly profit, with the latest 475% interim cash dividend of Tk47.5 for each share for the third quarter during the October to December quarter.

As the majority shareholders in the Bangladesh subsidiary, Marico Limited will receive the majority of this payout.

Already, Marico Bangladesh had disbursed the previous two quarters (April to September) interim cash dividend to its shareholders, including both local and Indian owners.

In the previous year, Marico Bangladesh paid the record 3,840% cash dividend or Tk384 against each share, including 1950% cash dividend and 1890% interim dividend in the previous three quarters.

The dividend payout was 204.8%, which is significantly higher compared with the last five financial years.

The lowest dividend payout was 13.7% in FY24, meaning it retained its majority profit earned as there were foreign currency shortage and foreign investors were facing hurdles to repatriate dividends.

Of the total Tk1209.60 crore dividend for FY25, Marico repatriated Tk1088.10 crore – or equivalent to 90% to India to owners of the company as the owners held 90% stake of the company, and the rest 10% availed by the local investors – including institutional and general shareholders.

Strong revenue, profit growth

According to its audited financial statement ending in December, Marico's year-on-year revenue grew by 24% to Tk1,545.16 crore, while its net profit after tax grew by 8.54% to Tk497.97 crore with an EPS of Tk158.09.

At the same time as the previous financial year, its revenue was Tk1,245 crore and net profit Tk458.79 crore.

It said through a disclosure on stock exchanges on Sunday, EPS has increased in the third quarter of FY26 as compared to Q3 of FY25 due to increased revenue and optimisation of operating expenses.

Its net operating cash flow per share stood at Tk109.79 in the Q3 (Oct-Dec) against Tk88.35 in the same time of the previous year due to higher collection from customers.

Its net asset value per share by the end of December declined to Tk92.22, which was Tk239.13 as of March 2025 due to the declaration of final dividend for FY25, and interim dividends for FY26, said Marico Bangladesh.

On Sunday, its share price closed at Tk2,770.40 each on the Dhaka Stock Exchange, a 0.23% higher from the previous trading session.

Two listed companies of BSRM Group, the country's largest steel manufacturer, posted a combined 33% growth in revenue to Tk10,732 crore during the July-December period of the 2025-26 fiscal year, driven mainly by higher sales price amid volatile market conditions.

The growth in revenue, however, was not matched by a similar rise in profitability as elevated business costs continued to weigh on earnings.

According to their half-yearly financial statements, both BSRM Limited and BSRM Steels Limited recorded higher topline performance in the first half of the fiscal year, but net profit growth remained modest due to rising raw material prices, higher financing costs and overall inflationary pressures.

BSRM Limited, which is primarily engaged in the production of mild steel products through its melting, rolling and re-rolling mills, reported an 18% year-on-year increase in consolidated revenue to Tk4,756 crore in the first half of FY26.

During the same period, the company's consolidated net profit edged up to Tk200 crore, while earnings per share stood at Tk6.79.

Despite the improvement over the six months, the company's second-quarter results reflected pressure on profitability. In the October-December quarter, consolidated revenue rose 14% to Tk2,411 crore, but consolidated net profit declined by 11% year-on-year to Tk78.70 crore, with earnings per share falling to Tk2.64.

The company said the weaker quarterly profit was mainly due to higher operating and input costs.

On the stock market, shares of BSRM Limited closed 1.67% lower at Tk81.80, while its market capitalisation fell by Tk53.74 crore to Tk2,442 crore.

BSRM Limited has an annual production capacity of 1.75 lakh tonnes of MS rod and 11.25 lakh tonnes of billet, making it a major supplier to the country's construction and infrastructure sectors.

According to the company, it continued to operate in a challenging environment marked by domestic economic pressures and global uncertainty.

Meanwhile, BSRM Steels Limited posted a stronger revenue growth compared to its sister concern. It reported a 47% jump in revenue to Tk5,976 crore in the first half of FY26, while net profit rose by 10% to Tk193 crore. Earnings per share for the period stood at Tk5.14.

In the second quarter alone, the company recorded a 31% increase in revenue to Tk3,338 crore, supported by higher sales volume and price adjustments. Net profit during the quarter increased by 6% to Tk95.50 crore, with earnings per share reaching Tk2.54.

Despite the improved financial performance, the company's share price also declined, closing 2% lower at Tk68.60. Its market capitalisation dropped by Tk52.66 crore to Tk2,579 crore.

BSRM Steels manufactures MS billets, which are the basic raw material for rods, using scrap and sponge iron, and subsequently produces MS products through re-rolling mills. The company has an annual production capacity of 12.50 lakh tonnes of billets, 5 lakh tonnes of MS products and 1 lakh tonnes of wire rods.

The Bangladesh steel industry, estimated to be worth around Tk75,000 crore, plays a crucial role in national infrastructure development and industrial employment.

As the market leader, BSRM has continued to supply steel to major national projects, including bridges, railways and power infrastructure, according to the company's annual report for FY25.

However, the operating environment remained highly volatile during the period. At home, political uncertainty and macroeconomic challenges such as foreign exchange volatility, tight liquidity conditions due to higher interest rates and persistent inflation put pressure on operating costs and consumer demand.

Internationally, ongoing geopolitical conflicts disrupted global supply chains and added to uncertainty in commodity markets.

BSRM also reported a decline in sales volume of MS rods during the first half of the fiscal year, mainly due to weaker domestic consumption and slower implementation of large infrastructure and private development projects.

These factors limited the group's ability to turn higher revenue into stronger profit growth.

Despite the headwinds, BSRM said it continued to focus on operational discipline, cost optimisation and quality assurance to maintain consistent product standards and plant reliability.

The group also pursued strategic initiatives to improve process efficiency and strengthen supply chain resilience in order to mitigate rising input costs and market volatility.

The General Economics Division (GED) has projected a delicate balance between a recovering growth trajectory and persistent structural hurdles, saying the economy could grow at 5.0 per cent in the current calendar year.

According to the January 2026 Economic Update and Outlook released on Sunday by the GED under the Planning Commission, the economy will expand by 5.0 per cent in 2026.

The report highlights a "fragile but resilient" recovery as the country navigates a complex democratic transition and prepares for its graduation from the Least Developed Country (LDC) category.

It notes a significant rebound in economic activities compared to the previous fiscal year.

Provisional data for the first quarter of FY26 shows real Gross Domestic Product (GDP) growth rising to 4.50 per cent, a sharp increase from the 2.58 per cent recorded in the same period last year.

The GED said the most pressing concern remained the stubbornly high inflation, which was currently outpacing wage growth and squeezing household purchasing power.

While price inflation increased by 0.20 percentage points last month, wage inflation only grew by 0.03 percentage points to 8.07 per cent, indicating that real income was falling behind.

On a positive note, the external sector showed signs of stabilisation.

Gross foreign exchange reserves strengthened to $33.19 billion in December 2025.

Remittance inflows hit a robust $3.22 billion that month, aided by a more favourable exchange rate and regulatory incentives.

Earnings stabilised at roughly $4.0 billion per month, with the readymade garment (RMG) sector continuing to provide the bulk share of foreign currency.

The GED cautioned that despite the 5.0 per cent growth outlook, several risks could derail the recovery.

"The economy will require strong governance, policy consistency, and sustained investment in skills to diversify beyond the garment sector. Uncertainty among economic elites and institutional weaknesses remains a significant risk during this transition," the report said.

Bangladesh's overall inflation rate edged up further in December, driven mainly by a faster rise in food prices, according to the Economic Update & Outlook (January 2026) released today (25 January) by the General Economics Division (GED) of the Planning Commission.

General inflation increased to 8.49% in December, up from 8.29% in November, reflecting renewed upward pressure from the food basket amid persistently high non-food inflation.

Food inflation rose to 7.71% in December from 7.36% a month earlier, while non-food inflation remained elevated at 9.13%, indicating continued cost pressures beyond food items.

The GED report says the acceleration in food inflation during the month was largely led by higher prices of fish and other protein items, although rice inflation continued its downward trend across all categories, offering some relief to consumers.

Despite inflationary pressures, the report highlighted several positive developments in the broader economy. External sector stability improved, supported by export recovery, strong remittance inflows and resilient import demand.

At the same time, bank deposits maintained double-digit growth, while private sector credit growth showed a modest uptick in November, according to the report.

On the fiscal front, the government has finalised the FY2025–26 Annual Development Programme (ADP) in line with budget priorities, aiming to support growth and social development.

The report also highlights the launch of the SDG village piloting initiative by the GED to advance localisation of the Sustainable Development Goals.

As part of the pilot phase, three villages – Telikhali in Khulna, Sonar Para in Kurigram and Mitingachori in Rangamati – have been selected to implement an integrated, village-level development framework.

The initiative will involve baseline surveys, need-based interventions, resource mobilisation, and a monitoring and evaluation framework, with lessons expected to inform scaling up in other lagging regions.

The initiative aims to operationalise national SDG priorities at the grassroots level by addressing multidimensional development gaps in a coordinated and inclusive manner.

According to the GED report, the SDG village piloting initiative will be implemented through baseline surveys, need-based interventions, resource mobilisation, and a monitoring and evaluation framework.

The lessons and experiences from the pilot villages are expected to scale up sustainable development programmes in other villages and lagging regions of the country.

Planning Adviser Dr Wahiduddin Mahmud today (25 January) said the government is moving away from financing large-scale development projects through foreign loans and stressed the need for avoiding a 'debt trap'.

"We do not want to take loans for big projects unnecessarily. Institutions like the World Bank often come with many project proposals. If some are genuinely high priority, we may consider them. But these issues are now being discussed and assessed very carefully," he told reporters after an ECNEC meeting.

The adviser said the government will accept loan-funded projects only if they are of critical national priority and cannot be financed or implemented with domestic resources or expertise. He noted that some initiatives, such as pollution monitoring, do not justify large loans or foreign consultants.

"Measuring pollution is not that difficult. The instruments involved are not extraordinarily complex. There is no need to take large foreign loans for such purposes," he said.

He added that as Bangladesh prepares for LDC graduation, interest rates on foreign loans are rising, making them more expensive and underscored the importance of relying on domestic capacity.

The adviser also warned against attractive but unnecessary projects offered by multilateral lenders like the World Bank and the Asian Development Bank (ADB).

"We will take only those loan projects that are truly necessary, where foreign support is genuinely required. Everything else should be done with our own resources, even if on a smaller scale," he said. He also highlighted the government's intention to reduce long-standing dependence on loans in social sectors, including education.

"There is no point in becoming trapped in a vicious cycle of debt. We want to move away from heavy reliance on loans in all sectors," he added.