BRAC EPL Stock Brokerage Limited hosts “Bangladesh Investors Conference 2024”

BRAC EPL Stock Brokerage Limited, in collaboration with Asian Tiger Capital Partners, on Thursday hosted the Bangladesh Investors Conference 2024, a landmark event that brought together key stakeholders from the financial and economic sectors. This high-level conference served as a platform for discussions on the economy, policies, the investment climate, and reforms in Bangladesh’s financial sector, says a press release.

The conference featured an impressive lineup of participants, including distinguished economists and academicians, the governor and officials from the central bank, renowned policymakers, senior officials from top banks, executives from large corporations, prominent dignitaries, journalists, as well as both local and foreign investors.

The conference opened with remarks by Ahsanur Rahman, CEO of BRAC EPL Stock Brokerage Limited, followed by the opening speech of Dr Zahid Hussain, former Lead Economist of the World Bank Bangladesh.

Mr Ifty Islam, Chairman of AT Capital Partners, moderated the event.

The first panel discussion featured Dr Zahid Hussain, Dr Mushtaq Husain Khan, an economist and professor at the University of London, and M Masrur Reaz, Chairman of Policy Exchange Bangladesh.

They discussed economic trends, policy reforms, and strategies to enhance the investment climate.

Later, Mr Charles Robertson, author of "The Time Travelling Economist," joined virtually to share insights on Bangladesh’s Monsoon Revolution.

Following a tea break, the second discussion included Dr Ahsan H Mansur, Governor of Bangladesh Bank, Saiful Islam, President of DSE Brokers Association of Bangladesh, and Selim R F Hussain, Chairman of Association of Bankers Bangladesh Limited and Managing Director & CEO of BRAC Bank PLC.

This session addressed banking sector reforms and the opportunities and challenges within Bangladesh’s financial markets.

Honorable Governor - Dr. Ahsan H Mansur said “External sectors including (1) a high balance of payments deficit, declining foreign exchange reserves, and accumulated arrears, alongside domestic issues such as (2) soaring inflation and (3) significant difficulties within the banking sector. It’s like a perfect storm, where all these 3 elements converging at the same time in Bangladesh, coupling with political uncertainty are increasing economic challenges.”

Explaining fast forward to now, after 4 months, Dr Ahsan H Mansur said “Unsettled import payments were about $2.5bn, which has now come down to $0.3bn, and our objective is to bring it down to zero in 1-2months. All the hundreds of L/Cs opened were tracked, which companies and which banks are been rectified. We have been settling L/Cs opened by Beximco and S. Alam Group, who are now not here but their liabilities are. BB stopped selling foreign exchange, meaning previously the central bank was selling FX reserves regularly for the last 2years but now there is no intervention from BB. Thanks to remitters; remittances inflow grew by 26 per cent YoY in the last 5 months. Despite industrial unrest and power shortages, exports grew nearly 10 per cent YoY in the last 5 months. This helped improve the current account balance, besides the financial account balance also turned $0.9bn surplus from the previous -$1.7bn deficit. This trend is going to continue and so far, the external sector is managed, and we don’t see any crisis or major shock. Commodity prices are low, and exchange rate is fairly stable. Return on taka asset is much higher than the return from dollar asset, it is already reflected in the market. Bankers used to keep extra dollars in their nostro account, but now they have reduced their holdings and moved to taka assets.

“BB is not printing a single taka, rather collected through treasury. Trying to keep the domestic borrowingto a reasonable level, much below what was stipulated in the budget. BB tightened monetary policy and as well as cut down fiscal expenditures. The challenge we have is from the supply side, mostly due to floods during August-October and long monsoon delaying crops (onion, potato and winter vegetables) production by 1-2 months. However, soon they will come down to 30-40taka per kg and even farmers know that too. We have seen in the US, UK, Europe and other countries that it takes at least 12months for the inflation tightening measures to be reflected. We have to be patient and allow that time. On the other hand, we have eliminated import duties on all essential food items- onion, vegetable oil, sugar, etc. to make the prices more tolerable for the consumers. All the policies are in place, we are waiting for the economy to react. If inflation doesn’t come down by January, we have to tighten the policy rate further. I still believe,the policy rate of 10 per cent and lending rate around 14 per cent, is probably the peakwe have seen. Target is to reduce inflation to 7 per cent by end of June and less than 5 per cent in FY26.

“So much resources have been drained out of the banking industry in a very systematic manner, specifically by the state-owned banks, that now we have banks whose 87 per cent of loans were given to one family or its shadow representatives. We have already drafted a Bank Resolution Act, under which BB will be given the authority for liquidation, merger, injection of capital or any other necessary actions. We have provided liquidity support to 6 banks; we believe some will surely come out of crisis. Deposits don’t need to worry, they will be fully compensated, no matter what they will be fully protected. Islami Bank now has a net deposit surplus of BDT 600mn every day, meaning they have already come out of liquidity crunch. Similarly, a few other banks are on the verge of graduating from the situation, but some might remain questionable form, and we are looking into it. Our efforts on asset quality reviews of banks are ongoing, and from January representatives will start inspection bank by bank. We have been in touch with US Treasury, British Government, World Bank and European Asset Recovery Programs to get their support to recover the laundered money through legal procedures.”

Lastly, he also said “To conclude, the journey has just begun. We will solve the issues systematically, so that we can leave behind a much better external sector situation and overall macroeconomic situation for the next elected government, which is conducive for growth and prosperity.”

In total, around 500 participants, both local and international investors, attended the conference virtually via Zoom, reflecting the conference’s broad appeal. The Bangladesh Investors Conference 2024 has proven to be a pivotal gathering, focused on addressing challenges and driving transformative changes to unlock the country’s investment potential.

"This conference reflects our commitment to driving meaningful dialogue and fostering connections that can unlock Bangladesh’s immense economic and financial potential," said Ahsanur Rahman, CEO of BRAC EPL Stock Brokerage Limited. "We have created a space where stakeholders can exchange ideas, address challenges, and explore opportunities that benefit all."