BANGLADESHS

FURNITURE INDUSTRY
FORGING FORWARD TO FLOURISH
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FROM THE
EDITOR
Flourishing Furniture
On July 26, the Central Bank revealed the
Monetary Policy Stance for H1, FY2017-18. Like
the previous half-yearly stance, this time too the
Central Bank took a cautionary approach towards
money growth. Having discerned the trend of MPS
over the past 4 half-years, from expansionary to
accommodative to cautionary, it is evident that the
economy is safeguarding itself from the drastically
falling remittance inflows, lower exports and
possible upcoming high inflation risk.
Over the last decade, furniture industry has shown
laudable performance by having an average of
25% export growth over the years. The industry
generated employment for 2.5 million workers
who directly contribute in financial inclusion. The
INDUSTRY & EQUITY ANALYSIS TEAM
ASIF SAAD BIN SHAMS ADNAN RASHID
Email: shams@idlc.com Email: adnan@idlc.com
e-commerce furniture startup scenario has also
started to bolster since many of the small startups
are cracking big online deals now. Even now,
discerning the market demand, the local furniture
players are expanding their span of market reach in
countries like Canada, Nepal, Bhutan and the like.
This phenomenon is a witness that Bangladesh is
making international-standard furniture, which
cater to the taste and affordability of the burgeoning
middle-class slice of the society.
Adnan Rashid
Assistant General Manager
IDLC Finance Limited
SUSHMITA SAHA
Email: sushmita@idlc.com
 contents

04 18 32-33 NEW !

Cover Story Comparative Analysis Industry Update

BANGLADESHS FURNITURE PERFORMANCE ANALYSIS OF Plastic
TOP 10 COMMERCIAL BANKS Pharma
INDUSTRY
WITH IDLC Steel

20
Furniture has been rightly regarded as one of the Telecom
booster sectors, which has employed approx. 2.2

34-35
million people in the country already. The sector
has a growth rate of 19% per year since 2010, NEW !
which demonstrates the colossal promise. New Idea!

12
Doctorola
Month In Brief

EXPERT OPINION
Rising from scratch
22 36 NEW !

Economy At a Glance
Selim H. Rahman For the Record

24
Chairman and MD, HATIL Complex Ltd

14 37 NEW !
Design & Printing: nymphea l www.nymphea-bd.com

Youth Leadership
NSU YES! Club
Analytics
Policy in Review Trends In Home
Monetary Policy Stance: H1,
FY2018 26 Loans Of Financial
Institutions

16 Trailblazers
In Conversation with
Anis A. Khan
38
IDLC News CEO & MD, Mutual Trust Bank Limited Capital Market Review

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.
BANGLADESHS
FURNITURE
INDUSTRY
FORGING FORWARD
TO FLOURISH
By S. M. Farabi Ferdous

4 of 40
 BANGLADESHS FURNITURE INDUSTRY
COVER STORY FORGING FORWARD TO FLOURISH

In Bangladesh, Micro and Small and Medium enterprises (SME) are of paramount importance.The knack
of SMEs to grow the industrial base and escalating the volume of foreign trade has made them a national
developmental priority, especially in terms of moving Bangladesh to a more sophisticated manufacturing and
service base than currently exists. Given the pre-eminence of SMEs in terms of creating jobs in the country, there
FINTECH
is an emphasis on selecting booster sectors, whichTHE have highFRONTIER
NEW promise IN
forBUSINESS/BANKING
growth and, within these, identifying
sub-sectors, which provide an overall impetus for economic growth. Furniture has been rightly regarded as one of
the booster sectors, which has employed approx. 2.2 million people in the country already. The sector has a growth rate
of 19% per year since 2010, which demonstrates the colossal promise. There are more than 75,000 SMEs in operation in
different parts of the country, having an average of 15 people working in a single enterprise. With no exception to the other
SMEs of the country, furniture enterprises are mostly male-owned, family run enterprises with a sole proprietorship.

Furniture Industry in Bangladesh actively working on materializing the potential of this

Traditionally, the furniture industry in Bangladesh has
been regarded as a cottage based industry. In early 90s,
the furniture industry in Bangladesh transformed from
cottage based industry to mechanized mass production
oriented industries. Since then, the furniture businesses
started to grow with modern machinery, innovative
designs and the use of assorted materials.
The main variations of products are wood, processed
wood & Medium Density Fiber (MDF) board,
laminated board, particleboard, rattan/bamboo and
wrought iron furniture. For a more personal domain
such as ones home, the preferred raw materials are
solid wood, a combination of solid wood with other
materials like cane, rattan, laminated boards, plywood
and MDF. For office furniture designs which are usually
focused on the more contemporary style, the usage
of materials like plastic, MDF, laminated boards and
wrought irons are preferred. Around 70% production
of furniture sector of Bangladesh is home furniture and
30% is office furniture.
At present, Bangladesh is producing a wide variety
of international standard quality furniture. People in
Bangladesh are now going to choose local furniture
instead of foreign. The export of furniture and allied
products from Bangladesh started from 1995. There
is good potential for the export of furniture and
Bangladeshs furniture industries are ready for that. It
is estimated that, by 2018 Bangladesh will earn export
potential of crafts furniture accessories worth of USD
20 million along with furniture worth USD 60 million.
At present two relevant associations i.e., Bangladesh
Furniture Export Association (BFEA) and Bangladesh
Furniture Industries Owners Association (BFIOA) are
sector.
Furniture industry can emerge as the countrys second
largest employment generating sector, after RMG. At
present more than 45,000 enterprises and nearly 2.5
million un-skilled and semi-skilled people are engaged
in this sector. On average 60% of raw materials of
furniture sector are imported from different countries.
Of those, timber, wood coating materials, hardware
& accessories, world class fabrics etc. are major
importable items. Scarcity of skilled manpower in
handling modern equipment and machinery is limiting
the prospect of growth of this industry, which can be
addressed through setting up more Technical Schools
with a curriculum of short-term trade courses.
The total export growth target for the Fiscal 2013-
14 was nearly 13% from USD 28 billion last fiscal.
According to Export Promotion Bureau data, in the last
fiscal year of 2011-12, the country achieved 16% growth
in furniture export to earn over USD 31 million. The
figures showed, that in the Fiscal 2009-10, the furniture
export volume was USD 19 million, while it amounted
to USD 21million in 2010-11 and USD 27 million in
2011-12. In the fiscal 2011-12, the total export volume
was USD 27 billion.
FURNITURE IS A LABOR
INTENSIVE SECTOR AND
BANGLADESH HAS LARGE LOW
COST MANPOWER WHICH IS A
VITAL FACTOR IN BECOMING
COMPETITIVE IN THE WORLD
MARKET.

5 of 40
According to Bangladesh Furniture Industries Owners
Association (BFIOA), currently, the countrys furniture
exporters have been exporting to the US, Canada,
Australia, UK, Middle East, Gulf countries, and other
Asian countries, like India, Japan, Taiwan, Singapore,
Thailand and Vietnam. In the furniture market, the
major players are Otobi, Akhtar Furnishers Ltd, Navana
Furniture, Hatil, Partex Furniture etc.
A study on Export markets entry strategy for
Bangladeshi furniture manufacturers was conducted by
the Center for Industrial Studies (CSIL), an independent
economic research and consulting company founded
in Milan. The study shows that Bangladesh is able to
export USD 40 million by 2015 with an additional USD
10 million export of accessories & soft furnishing. This
export volume can increase up to USD 1 billion by 2020,
provided that there is increased productivity, better
market linkage and ensured compliance standards.
The potential can be materialized through exploiting
low labor cost which is a vital factor in becoming
competitive in the world market. In wood furniture
manufacturing, labor accounts for up to 40% of the total
costs. In Bangladesh labor costs account for 20% of the
production. Here, the hourly wage rate in furniture is
between USD 0.06 - 0.40, less than in China (USD 0.50-
0.75) which is the largest furniture exporting country.
Bangladesh Furniture Export Trend
Source: EPB
50
45
40
Export (USD Millions)
35
30 27.14
25 21.38
19
20
15
10
5 1.80 million people directly. It has not been long since
0
2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015
Industrialization is the only way for a developing country
like Bangladesh to gain in economy. Our goal to emerge
as a middle income country by 2021 much depends on
how we can explore and commercialize our industries.
Though Bangladesh is mostly known for its garments
and textile industries, there are other industries that
have the potential to capture the global market in the
near future. Furniture sector is one of them. Furniture
sector was included in the Export Policy, 2009-2012 as a
Special Development Sector and in Export Policy, 2012-
2015, it has been upgraded as a Highest Priority Sector
due to extreme export potentials.
At present two relevant associations i.e., Bangladesh
Furniture Export Association and Bangladesh
Furniture Industries Owners Association (BFIOA) are
actively working on materializing the potential of this
sector. Bangladesh Furniture Export Association has 19
members.
Sector Profile
The rapid growing furniture sector of Bangladesh
constitutes approximately 70,000 enterprises all over
the country. Most of the enterprises are of small and
medium scale.
Micro &
Firm Size Medium Total
Small
No. of Enterprises 70953 81 71034
Local market share
at sales price (Billion 42.2 24.45 66.65
BDT)
Manpower involved
1.77 0.03 1.8
(Millions)
The furniture industry in Bangladesh has been
experiencing healthy growth over the last 6 years. The
domestic market is exhibiting an upward trend and is
currently worth BDT 67 Billion. (Source: EU Technical
Report, 2012) Also, within that time, exports of wooden
furniture has increased by CAGR 104% to USD 38.94
Million (source: EPB), while the total number of
42.58 38.94
enterprises has grown by 68% to 71,034 (source: EU
31 report).
The growth in terms of turnover is around 19% per
annum. The industry is currently employing about
Bangladesh started exploring the export market, but
within a very short span of time, local manufacturers
have started exporting to the USA, Japan, European
countries, various provinces in India and other South
East Asian countries. In the export market, the average
export growth of the furniture industry has been slightly
above 20% annually. In the last fiscal, the country
achieved 16% growth in furniture export to earn over
USD 31 million according to Export Promotion Bureau
data. In the Fiscal 2009-10, the furniture export volume
was USD 19 million while it amounted to USD 21
million in 2010-11 and USD 27 million in 2011-12.
There is a huge opportunity, but the sector needs a large
number of skilled workers to meet the rising demand.
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 CATEGORY FURNITURE

HOME FURNITURE

Bed Bed as a single item holds the majority of the market share
among all home furniture. Solid wood is the main raw material
used to produce bed frames. Among other alternative materials,
processed wood, metal, and cane are also used.

Sofa The major raw materials used to produce sofas are solid wood
(sometimes processed wood, cane or metal), upholstery fabrics
and sponge-foams.

Cabinet There are different types of cabinets used in a home scenario like,
kitchen cabinet, show cabinet, dinner cabinet, cabinet for clothes,
storage cabinet etc. The major raw materials used to produce
cabinets are processed wood (sometimes solid wood), glass etc.

Table Dining tables, side tables, center tables, study tables, dressing
ENGAGED tables etc. The major raw materials used in table production are
ENTERPRISES solid wood (sometimes processed wood), glass, mirrors, metal
pipes etc.
75,000
Chair The major raw materials used to produce chairs are solid wood
EMPLOYMENT (sometimes processed wood and metal pipes), padding materials
(sponge-forms etc.), upholstery fabrics etc.
CREATION

2.5 MILLION Accessories Stools, hangers, wall shelves, shoe racks, mirror frames, bowls,
showpieces etc. Solid and processed wood, metal pipes, mirrors,
glasses, etc. are the main raw materials for production of such
EXPORT items.
DESTINATIONS
US, Canada, Australia, OFFICE FURNITURE
UK, Middle East, Gulf
Tables Office tables can be defined as different types like executive
countries, and other
tables, working tables, work stations, conference tables, computer
South Asian and East tables, etc., which are mostly produced using processed wood
Asian countries (sometimes solid wood), glass, locks, etc.

Chairs Office chairs are mostly made out of metal pipes (sometimes solid
and processed wood), padding materials (sponges, foams, etc.),
plastic, upholstery fabric (sometimes PU), mechanical, adjusting
device, etc.

Shelves and Shelves and cabinets used in office spaces are produced out of
Cabinets processed wood (rarely solid wood and metal pipes), glass etc.

Waiting lounge Used at offices and hotels; are made out of processed wood
sofas (sometimes solid wood and metal pipes), upholstery fabric or PU
etc.

Factory In the scenario of Bangladesh, the majority of the factory furniture

Furniture consists of working tables, trolleys, and adjustable high stools.

Ship Furniture Ship requires all kinds of furniture including the home and office
range, furniture for hotels and restaurants.

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In the last fiscal, Bangladesh earned USD 7 million target of about USD 38 million with 20% growth for the
from the furniture export to the US market and then current financial year while the government has set the
USD 5 million from the Swedish market. Meanwhile, total export target of USD 30.5 billion.
the Ministry of Commerce has set a furniture export

Categorization of furniture enterprises of Bangladesh

Based on material used to produce furniture, the SMEs in Bangladesh can be categorized according to the table below:

Category Product Raw Material Source

Majority of the wood is imported from Myanmar, Ghana,
Solid Wood All sorts of domestic and office
Ivory Coast, Malaysia, USA, Canada, and a few other
Furniture furniture made from Timber
European countries. The import duty on wood is 10.22%.
Except particle board, and melamine laminated board, all
Medium density fibre board (MDF),
Processed Wood other processed wood is imported from different sources,
plywood, melamine laminated
Furniture like China, Malaysia, and India. The import duty on
board, veneered particleboard, etc
processed food is 92.30%.
Mostly office furniture made from
Metal Furniture Stainless Steel is imported from China.
Stainless Steel
Cane and Rattan Obtained from both the local sources and imported sources
Home furniture, decorative
Furniture (Indonesia and Malaysia).

Majority of the raw materials used in the sector
are import based and the import duties are quite
high on processed wood (92.30%), which is now
becoming the main raw material to produce
furniture in the global furniture Industry. The
duty on solid wood is 10.72%, which is low but due
to the cost and environmental reasons, use of solid
wood in furniture is getting reduced in all over the
world in recent years. Processed wood furniture
is replacing solid wood furniture gradually.
Therefore, the high import duties on major raw
materials may hinder in achieving competitiveness
in the export market. Cane and rattan furniture
are environment friendly and are mostly used in
home furniture like, sofa, chairs, tea-tables and for
other decorative purposes.

Information Flow Marketplace

Supplier Manufacturer
Retailer
Customer

Manufacturer Distributor

Production Flow Retailer

8 of 40
Top players

HATIL Complex Limited The company has around 64 showrooms in Bangladesh,

Established in 1969, Hatil started off as a timber
company. It rebranded itself as a furniture producer in
1989. Hatil has 48 years of accumulated experience in
wood processing and furniture manufacturing. It offers
a wide range of products including home furniture,
office furniture, doors, furniture for children, etc. The
company is also providing Smart Fit furniture which
includes space-saving furniture like wall cabinets, sofa
cum bed, space saving bed, etc. Hatil has one of the largest
manufacturing plants which employs over 2000 people.
and is also expanding business internationally. Hatils
export coverage includes USA, Canada, Australia,
Saudi Arabia, Kuwait, UAE, Thailand, Egypt, Russia
etc. In addition to nationwide presence, Hatil is the
only Bangladeshi Furniture brand that operates single-
brand showrooms in Australia and Canada. Hatil is
committed to manufacturing environment-friendly
furniture and is the proud recipient of the HSBC-Daily
Star Climate Award. The company is also the only FSC
certified furniture manufacturer in Bangladesh.

Basic Information of Hatil Complex Ltd

Established 1969

Product profile Wooden, Melamine Laminated Chip Board, MDF, Cane and Metal furniture

No. of Showrooms 64

Countries exported to USA, Canada, Australia, Nepal, Bhutan

Potential export destinations India, and the Middle East

NAVANA Furniture Limited Designing Furniture. The annual production volume

NAVANA Furniture Limited, a sister concern of Navana
Group, was founded in 2002. NAVANA Furniture has its
factory in Savar, operating in more than 12,000 sq. m.
area. It sells Office solutions, Home solutions, Medical
and Lab solutions, Industrial solutions and Interior
of the company is BDT 1,200,000,000. The company
has around 44 outlets across Bangladesh and is also
expanding business internationally. At present, around
thousands of people are employed in the corporate
office and manufacturing plants of Navana furniture in
Bangladesh.

Basic information of NAVANA Furniture Limited

Established 2001

Product profile Home furniture, office furniture, project furniture, doors, wardrobes, sawn timber

No. of Showrooms 44

Countries exported to India

Potential export destinations European countries and Middle East

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Akhtar Furnishers Limited (AFL)

Akhtar Furnishers Ltd (AFL) commenced its business in 1976. At present, around 800 people are directly working under
the shade of Akhtar Furnishers Ltd. The company have their own seasoning capacity of 2000 cft. solid wood a month.
The annual production volume of the company is BDT 1,200,000,000.

Basic Information of Akhtar Furnishers Ltd (AFL)

Established 1976

Product profile Wooden, Melamine Laminated Chip Board and MDF

No. of Showrooms 32

Countries exported to Australia, UK, USA

Potential export destinations UK, UAE

SWOC Analysis

STRENGTHS Lack of awareness on technology and high volume

Low Labor Costs
Hand Carving Skills
Large domestic market with high growth rate
Workers are easy to train
Existence of strong leather industry
High quantity of available workforce
Capacity of product differentiation
Entrepreneurial skill
WEAKNESSES
Majority raw materials are imported, not easy to get
Problem with working and manufacturing process
Absence of raw material processing service
provider
Absence of design service providers
High cost of capital
Low Marketing, Accounting and Management skills
Lack of quality assurance
Lack in abiding environment and safety
compliances
Practice of wide range product manufacturing
Knowledge on modern furniture making is low
Knowledge on surface finishing is low
Low access to finance for manufacturers
Lack of skilled labor in furniture making
production machines
No export marketing initiatives by the producers
Lack of proper branding and marketing initiatives
as well as effective PR tools including website
OPPORTUNITIES
High growth in the purchase ability of domestic
consumers due to high GDP growth of the country
With quality improvements, a large export market
can be tapped
Backward linkage factories are growing
Government has listed Furniture sector as a thrust
sector for high export potentials, which may
enable the sector to enjoy duty exemption on raw
material import of exporting furniture.
Global Export Facilities for Bangladesh
Contemporary Hand Carving Existence of
forward linkage industry
Migration of furniture industry
CHALLENGES
Frequently disrupting electricity
Political instability
Image distortion due to recent negative working
condition issues in RMG sector which also poses a
threat

10 of 40
 Unfavorable tax and import duty policy
Industry is overtaking carpentry which may result
in the loss of hand carving skills
Value Chain Analysis
Here is a typical solid-wood manufacturing flow chart.
Most high-end companies follow this type of program
during the manufacturing process
The lumber is
Carefully selected
Air-dried and kiln-dried to about six or seven
per cent moisture content
Rough-cut to eliminate all warps, knots checks
and splits
Clean stock is assembled into dimensional stock
of various sizes, glued under pressure, and cut into
rough shapes of pedestals, legs, posts, or drawer
and frame component
These rough-cut solid parts are further refined by
bond sawing, then
Shapers contour the rough edges.
Dovetail machines cut interfacing joints
Boring machines pre-bore holes for dowels
Master carving machines carve up to forty duplicate
images at one time
Sanding is one of the most critical operations
because the condition of the piece in the raw
determines how well the finish will look. The wood
may be sanded by various belt, wheel and drum
sanders, as well as by hand
All parts are now ready for assembly.
Component parts such as drawers, doors, tops go
through sub-assembly
All parts flow to the cabinet room where the final
assembly takes place. They are fitted together and
thoroughly fastened with dowels, glue and screws,
either in combination or as a single procedure.
The assembled piece is placed in a hydraulic press
to ensure, tightly fitted joints and, at this point,
further reinforcements such as corner blocks are
added.
Table legs and leaves are numbered to assure proper
fit because these items are shipped flat in a box and
assembled at the store or at home.
Drawers and doors are fitted properly
(The writer is a Senior Executive Officer, Credit Risk Management and can be reached at ferdous@idlc.com)
11 of 40
The chief raw materials used are wood, laminated board,
wrought iron furniture, and processed wood & medium
density fiber wood, particle board and rattan bamboo.
However, most of these materials need to be imported.
Of the woods; Tic, Gamar and Hardwood come from
Africa, while Barmatic wood comes from Myanmar.
Growth Factors
Improve capacity of Business Intermediary
Organizations for building and developing
technical skills, marketing skills, management
skills, environment skills of the members.
Enhancement of Business Intermediary
Organizations and small businesss understandings
on export market requirements. Establish linkage
with international relevant bodies and trade bodies
and play an active role in the matchmaking for joint
ventures, foreign investment, expedite technology
transfer and stimulate export deals of local SMEs
with foreign buyers.
To enhance advocacy and lobbying supportive
activities; deal and negotiate with the relevant
Governmental bodies on the issues like
implementation of export friendly import duty
structure on raw materials, improvement of
infrastructural support, policy improvements
in favor of better access to formal financing,
introduction of bonded warehouse facilities
for duty free raw material import on exporting
commodity or cash incentives on export etc.
Develop a web portal cum database where all
its members portfolio is listed, which will play
an important role in the future development of
export linkages. Enable SMEs to disseminate own
information to the foreign buyers.
Create awareness on necessary technologies
required for enhancing quality and productivity
and facilitate the applications via training.
Properly seasoned timber/wood is not available for
furniture manufacturers and there is no existence
of service providers for seasoning, which results
in poor quality assurance and will surely hinder
the possibility of export business enhancement, so
establishment of a timber seasoning self-sustained
service center for SMEs is a crucial need.
Facilitate furniture designers creation process
and assistance to SMEs to develop new exportable
furniture line, branding cum PR materials and
local and export marketing.
 SELIM H. RAHMAN
EXPERT OPINION CHAIRMAN AND MANAGING DIRECTOR, HATIL COMPLEX LTD.

RISING FROM SCRATCH

HATIL, has 48 years of experience in wood processing, and furniture

manufacturing, thereby always ensuring that their customers get furniture
which is aesthetically pleasing, functionally superior and durable. HATIL, a
pioneer in exporting furniture in Bangladesh, currently supplies furniture to USA,
Canada, Australia, Russia, UAE, Thailand, etc. HATIL is committed to excellence
in everything they do, and are the only FSC Certified Furniture Manufacturer in
Bangladesh. MBR recently had a one-to-one conversation with Selim H. Rahman, the
Chairman and Managing Director of HATIL Complex Ltd.

Selim H. Rahman
Chairman and Managing Director, HATIL Complex Ltd.

MBR: Please tell us something about how HATIL was
started.
SHR: My father, the late Al-Haj Habibur Rahman,
founded H. A. Timber Industries Ltd., in 1966, and
used to only sell timber. Previously, the practice was
that people would buy wood and have carpenters build
the furniture in their homes. I worked for my father
for two years, doing the same work that he had been
doing. Although the business was doing well, I was not
enjoying my work.
on the spot, and said that instead of buying the timber
from me, she would be purchasing doors instead! This
was how HATIL was established in 1989. Then, the
customers who bought doors for me began demanding
for furniture. Hence, arising purely out of customers
needs, HATIL began manufacturing furniture.
Although, HATIL is renowned for selling furniture, we
actually started out by selling doors.
MBR: What is the significance behind the name
HATIL?

A chance meeting with an employee SHR: Many people have searched

gave rise to my entrepreneurial
spirits. There was a gentleman in my
fathers factory, who had previously
been employed in a factory in
Saudi Arabia which manufactured
solid wooden doors for various
construction projects. From him, I
got the inspiration to expand our current product line to
include door manufacturing. With a little capital from
my father, I rented a small space opposite my fathers
sawmill, and purchased seasoned wood from him. I
also hired one carpenter and was developing plans with
him, when luck favored me again.
A customer arrived wishing to purchase wood from
me. Over the course of our transaction, I found myself
telling her about my plan of manufacturing doors.
She seemed impressed, and she gave me BDT 50,000
for the meaning behind the name
HATIL but have been unsuccessful.
H.A. Timber Industries Ltd. was
established by my father in 1966.
What a lot of people are unaware of,
is that when I joined the company
in 1989, I changed the name to
HATIL by using the acronym of the companys name!
MBR: What is the secret behind HATILs immense
success?
SHR: We have always been very focused on providing
the best quality products for our customers. When
we first started out, a customer would come to our
showroom, choose a product he liked, and sign on the
product, because he wanted to be assured that he would
receive the product that he verified with his own eyes.

12 of 40
However, the scenario is quite different now. A customer
would like a product in our showroom, and insist that
we send him a fresh piece from our warehouse, without
verifying the quality of the product. This shows the
immense faith that customers have in our products
and in our company. This positive perception and faith
of customers could be a big contributing factor to our
success.
MBR: What do you think about the furniture industry
in Bangladesh?
SHR: At present, the furniture industry in Bangladesh
has two types of players there are the smaller
companies who buy wood, hire carpenters and make
furniture, and then there are some big companies
who have achieved the international standard and are
manufacture furniture using machines. However, there
is a lot of scope for growth in the furniture industry
of Bangladesh. Just like the garments industry, the
furniture industry is labor-intensive, and can create
jobs on a massive scale. With the implementation of the
right Government policies, the furniture industry could
be the second largest exporting sector, after RMG.
MBR: What challenges did you face when you started
out? How do they differ from your current challenges?
SHR: Initially, when I started out, I had limited capital.
Additionally, carpenters would require advances, but
then delay coming back from holidays, which would in
turn cause production to halt for days. Since, furniture
manufacturing is a technical job, carpenters would
try to dominate negotiations, which was also quite
challenging.
The current challenges that we face are quite different
from our past challenges. The biggest challenges we are
facing now are in terms of cost, which is hampering
our price competitiveness in international markets.
Every month, we are paying BDT 14 lacs to purchase
13 of 40
diesel fuel for the generators, on top of paying BDT 25
lacs for the electricity bill. Delays at the port also cost
us, both in terms of money and time. Moreover, the
poor road conditions make it very expensive to send
products from Dhaka to the Chittagong port. However,
our biggest cost challenge, is the incredibly high import
duties on raw materials.
Since Bangladesh has to import most of the raw
materials for manufacturing furniture, the import duties
are incredibly high. Even though the Government has
agreed to give us an incentive of 15% i.e. 15% of the
import duty would be covered by exports, it is still not
enough. We cannot also avail the governments bonded
warehouse facilities since we do not have a 100%
export-oriented factory. Unless we are sure of getting
orders which will maximize the new factorys capacity
utilization to the fullest, we cannot go for such ventures.
MBR: How does HATIL differentiate itself from its
competitors?
SHR: In the past, furniture in Bangladesh were old
fashioned, stocky in build and took up a lot of space.
These sorts of furniture were best suited for the large
houses that were very popular in the past. When I see
furniture stores in Mirpur, still selling those antiquated
designs, I notice that they waste almost 50 cft of wood
making those furniture. If all the shops in Mirpur are
doing the same thing, just imagine how much wood is
being wasted! I consider this a waste of the countrys
natural resources.
We also ensure that we never compromise on quality;
starting from sourcing the best raw materials to smoothing
the production process we ensure that consumers get the
best quality products from us. We have been practicing the
Japanese quality management philosophy Kaizen since
2007. Additionally, we care deeply for the environment
and won the HSBC-Daily Star Climate Award in the
Green Operation Category in 2013.
POLICY IN REVIEW MONETARY POLICY STANCE: H1, FY2018
MONETARY POLICY STANCE: H1, FY2018
The Monetary Policy Stance for H1, FY2018 focuses on expediting short and medium-term macroeconomic
management, and endorsing socially responsible financing which would help achieve the governments
environmentally sustainable growth objectives. The cautionary Monetary Policy Stance for FY2018 focuses on price
stability, poverty reduction, economic growth, and employment generation.
The Monetary Policy Statement (MPS) for the first half
(H1) of 2018 was announced on July 26, 2017 by Fazle
Kabir, the Governor of Bangladesh Bank. Bangladesh
Bank (BB) decreased its credit growth targets for both
the public and private sectors due to the slow investment
trend. A cautionary stance was adopted after taking
into account falling remittance inflows, lower exports,
and rising inflation risks.
Highlights of Monetary Policy Statement (MPS):
July December 2017 (H1)
Broad Money (M2) grew by 11.7% against the
FY17 ceiling of 15.5%. The FY18 monetary
program has set 13.9% growth ceiling for M2, and
a 12% yearly average growth ceiling for Reserve
Money (RM). An annual average has been adopted
for the first time, in place of the point-to-point
target for RM, for improved adherence with the
chosen monetary stance. The benchmark repo rate
remains unchanged at 6.75 % following a review.
Domestic Credit grew by 11.3% against the FY17
ceiling of 16.4%, and has been set at 15.8% for
FY18. Private Sector Credit Growth was 16%
against the FY17 ceiling of 16.5%, and has been
set at 16.3% for FY18. Increase in the net sales of
National Savings Certificates (NSCs) caused public
sector bank borrowing to fall to negative 16.2%,
causing domestic credit to remain well below the
FY17 monetary program ceiling. Growth ceiling
for Public Sector Credit has thus been set at 12.1%
for FY18.
Mean inflation decreased to 5.44%, below the
FY17 ceiling of 5.80%. However, the upward trend
in food prices, caused by the flash floods in the
haor regions during the fourth quarter of FY17,
are indicative of an inflation outlook. Some of the
risks associated with domestic inflation may be
14 of 40
mitigated by the subdued global inflation brought
on by the tightening of money supply in the US
and the EU, and the low inflation prevailing in
India. Bangladesh Banks FY18 monetary program
intends to set a cautious, flexible course to contain
the annual average CPI inflation within the set
target ceiling of 5.5%.
GDP (Gross Domestic Product) growth was 7.24%.
A target of 7.4% real GDP growth has been set for
FY18. Although, the output growth momentum
looks robust, low FY17 export growth of 1.7% and
workers remittance inflow downturn to negative
14.5% pose threats to the external and local
demand led growth outlook for FY18.
To support the Governments inclusive and
environmentally sustainable production and
employment growth goals, policy supports for
financing of farm/non-farm MSME output
initiatives will be continued, with greater emphasis
put on employment focused sectors, and green
projects of adopting environment friendly
production practices. Additionally, the Central
Bank has plans of taking initiatives to facilitate
FDI through dedicated help desks/support units in
banks.
Multidimensional efforts are being made to
gradually transform Bangladesh Banks present
monetary targeting policy based framework
to a financial price targeting based framework,
and this is expected to continue in FY18, with
especial importance given to improving BBs
forecasting abilities, and getting rid of obstructions
to market-based financial pricing, including high
NPLs (Non-performing Loans) arising out of slack
lending practices, and non-market pricing of the
Governments non-bank NSCs borrowings.
MAJOR INDICATORS MPS
REMITTANCE
FOR THE LAST SEVERAL 1600
1465.68
HALF-YEARLY MONETARY 1400
1200
1338.31

POLICY STATEMENTS, THE 1000 1150.64

1056.64
958.73
CENTRAL BANK HAS BEEN 800
600
TAKING A CAUTIOUS 400

APPROACH, WHICH THE 200

0
ECONOMISTS REGARD THE Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16 Dec 16

RIGHT ONE CONSIDERING In FY17, remittance inows declined by 14.5% due

THE CURRENT ECONOMIC to decreased demand for migrant workers in major
migrant labor hosting countries, and increasing
CONTEXT. difficulties in accessing legitimate channels for
sending money home.

INFLATION
8.50% BROAD MONEY
7.48%
7.50% 7.03%
7.47% 7.05% 16.43%
13.76%
6.50% 6.10%
13.55% 13.40%
5.71% 13.07%
5.50% 5.92%
5.51%
5.49%
4.50% 4.90% 4.56% 4.51%
3.50%
General Food Non-Food
2.50% Dec 15 Jan 16 Feb 16 Mar 16 Apr 16May
16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16
Jan 16Feb
16Feb 16Mar
16Mar 16Apr
16Apr 16May
16May 16Jun
16Jun 16July
16July 16Aug
16Aug 16Sep
16Sep 16Oct
16Oct 16Nov
16Nov 16Dec
16Dec 16
Broad Money (M2) grew by 11.7%, well below
Average CPI Ination gradually declined to 5.44% the FY17 ceiling of 15.5%, and was a key player in
in June 2017, well below the programmed FY17 helping contain the CPI ination of FY17.
ceiling of 5.80%.

INTEREST RATE SPREAD PRIVATE SECTOR CREDIT GROWTH

4.95% 16.40%
16.20%
4.90% 4.86% 16.20%
4.84% 4.85% 16.06%
4.85% 16.00%
15.80% 15.97% 15.60%
4.80% 15.88%
4.75% 4.72% 15.60%
15.40% 15.30% 15.60%
4.70%
4.65% 15.20% 15.20%
4.65%
15.00%
4.60% 15.01%
14.80%
4.55% 14.60%
4.50% 14.40%
Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16 Jul 16 A ug 16 Se p 16 Oct 16 N ov 16 De c 16 Ja n-17 Fe b-17 Ma r- 17

In FY17, the intermediation spread between Private Sector Credit Growth grew by 16% in May
weighted average rates on bank deposits and loans 2017, well within the targeted ceiling of 16.5%,
has narrowed by only 12 basis points, reecting high and helped increase private investment and
levels of NPLs in banks with lax lending disciplines. consumption.

15 of 40
IDLC NEWS IDLC NEWS
Dhaka Bank Limited signs MoU with IDLC Finance Limited for partnership on various financing facilities
IDLC Finance Limited countrys leading Non-Banking
Financial Institution has recently partnered with Dhaka
Bank Limited one of the reputed banks in the industry.
The purpose of this partnership is to have a synergy
between the organizations. Through the MoU signing it
is expected that both the entities will have a successful
partnership for implementation of financing medium to
large-scale projects for Corporates in the area of Trade
Finance, Agency Service and Treasury Deals.
1st session on Environmental & Social Risk Management for IDLC employees
As a part of E&S Teams activities on capacity
development program of IDLC Employees, the 1st
session on Environmental & Social Risk Management
of IDLC employees was held on July 27, 2017 at IDLC
Knowledge Center.
It was a half-day session for business RMs & CRM
representatives with the covered Issues like:
New ESRM 2017 Guideline of Bangladesh Bank
16 of 40
Mr. M. Jamal Uddin, Deputy Managing Director &
Head of Business of IDLC Finance Limited and Mr.
Emranul Huq, Additional Managing Director of Dhaka
Bank Limited formalized the signing in an agreement
signing ceremony. The Ceremony was adorned with the
presence of Mr. Arif Khan, CEO & Managing Director
of IDLC Finance Limited. Senior officials of both the
organizations were present during the signing ceremony.
Comparison between ERM 2011 & ESRM 2017
Frequently Ask Questions regarding ESMS Software
Sector specific checklists & Corrective action plan
before financing
E&S team will arrange another 2 sessions by this year
for building readiness of IDLC employees on E&S Risk
Management which is now an integral part of credit risk
assessment and sustainable business practice.
IDLC NEWS HALF-YEARLY EARNING DISCLOSURE OF IDLC

Half-Yearly Earning Disclosure of IDLC

1st Half 2017 (January June 2017) Performance compared to 2.34% and 22.30% respectively, in the
Highlights of IDLC Finance Limited: same period last year. The NPL (Non-performing Loan)
ratio stood at 2.84% as at June 30, 2017 compared to
Net Profit After Tax of BDT 1,169mn, 33% year on 2.98% as at December 31, 2016.
year growth
Diluted Earnings Per Share (EPS) in H1 2017 is
BDT 3.28 against BDT 2.72 in the same period last While our core
year lending business
Customer assets grew by 13% in 2017 to reach BDT
70bn continued its
IDLC Finance Limited reported Net Profit after Tax
growth momentum
of BDT 1,169mn in the first half of 2017, recording a and delivered
substantial growth of 33% from the same period last consistent nancial
year. Earnings per Share (diluted) also increased 21% to
reach BDT 3.28 for the period. performance
In these 6 months IDLC acquired 5,779 new customers
in the rst half
and grew the Customer Assets portfolio by 13% or year of 2017,
BDT 7,927mn to end the first half with a loan book our subsidiaries
of BDT 70bn. This growth in customer assets was
driven primarily by the SME Loans, which experienced
produced
a healthy 18.6% growth in this period. SME loans exceptional results
currently comprise 45% of the total loan book of IDLC to elevate the
with close to BDT 31bn. The other business segments
of the company - Corporate and Consumer Finance overall protability
and, especially the two major subsidiaries IDLC to a new height
Investments Limited and IDLC Securities Limited
also delivered strong performance. Arif Khan
CEO & Managing Director
In the reported period, IDLCs annualized ROA and IDLC Finance Limited.
ROE figures stood at 2.77% and 22.89% respectively,

17 of 40
PERFORMANCE ANALYSIS OF
TOP 10 COMMERCIAL BANKS* WITH IDLC
TOP 10 COMMERCIAL BANKS*
BRAC Bank Limited Pubali Bank Limited * Considerations
Dutch-Bangla Bank Limited Southeast Bank Limited 1. Period of the financials:Half-yearly
Eastern Bank Limited The City Bank Limited 2017
Islami Bank Bangladesh Limited Trust Bank Limited 2. Based on two criteria :Loan
Prime Bank Limited United Commercial Bank Limited PortfolioandNet Profit after taxes

RETURN ON 3.0% 2.8%

ASSETS (ROA) 2.5%

Half-yearly annualized 2.0% 1.6% 1.5% 1.4%
1.5% 1.1% 1.0%
1.0%
0.8% 0.8% 0.7% 0.7% 0.7%
0.5%
0.0%
IDLC BRAC Eastern The City Trust Dutch-Bangla Southeast United Islami Pubali Prime
Finance Bank Bank Bank Bank Bank Bank Commercial Bank Bank Bank
Limited Limited Limited Limited Limited Limited Limited Bank Bangladesh Limited Limited
Limited Limited

RETURN ON 25.0% 22.9%

20.1% 19.7%
EQUITY (ROE) 20.0% 16.3% 15.7%
Half-yearly annualized 14.3%
15.0% 11.7%
10.3% 9.2% 9.1%
10.0% 7.1%
5.0%

0.0%
IDLC Trust BRAC Eastern Dutch-Bangla The City Islami United Pubali Southeast Prime
Finance Bank Bank Bank Bank Bank Bank Commercial Bank Bank Bank
Limited Limited Limited Limited Limited Limited Bangladesh Bank Limited Limited Limited
Limited Limited

LOANS AND 700.0 661.7

ADVANCES 600.0

(In Billion) 500.0

400.0
as of June 30, 2017
300.0 207.0 213.7 237.3
169.5 171.0 178.3 181.3 186.2 186.8
200.0
70.2
100.0
0.0
IDLC Trust Eastern Prime BRAC Dutch-Bangla The City Southeast Pubali United Islami
Finance Bank Bank Bank Bank Bank Bank Bank Bank Commercial Bank
Limited Limited Limited Limited Limited Limited Limited Limited Limited Bank Bangladesh
Limited Limited

18 of 40
 LOAN PORTFOLIO 20.0%
17.3%
18.0%
GROWTH 16.0%
(Y-T-D, %) 14.0% 12.7%
12.0%
9.3%
10.0% 8.2% 7.9% 7.4%
8.0% 6.1% 5.8%
6.0% 5.0%
3.4% 3.1%
4.0%
2.0%
0.0%
Trust Bank IDLC Finance Eastern Bank Islami Bank Southeast Dutch-BanglaThe City Bank United Pubali Bank Prime Bank BRAC Bank
Limited Limited Limited Bangladesh Bank Limited Bank Limited Limited Commercial Limited Limited Limited
Limited Bank Limited

NET PROFIT AFTER 3.5

2.91
3.0
TAXES (In Billion) 2.5 2.27
(6 months, 2017) 1.91
2.0 1.71
1.42 1.32
1.5 1.91 1.18 1.17 1.14
0.88
1.0

0.5

0.0
Islami BRAC The City Eastern Dutch-Bangla United Southeast Trust IDLC Pubali Prime
Bank Bank Bank Bank Bank Commercial Bank Bank Finance Bank Bank
Bangladesh Limited Limited Limited Limited Bank Limited Limited Limited Limited Limited
Limited Limited

COST-TO-INCOME 80.0% 73.0%

(Half yearly, 2017) 70.0% 60.7% 62.9%
60.0% 55.2%
48.9% 49.0%
50.0% 41.9% 44.6%
36.7% 37.3%
40.0% 33.2%
30.0%
20.0%
10.0%
0.0%
Southeast IDLC Trust Eastern Pubali Prime Islami The City BRAC United Dutch-Bangla
Bank Finance Bank Bank Bank Bank Bank Bank Bank Commercial Bank
Limited Limited Limited Limited Limited Limited Bangladesh Limited Limited Bank Limited
Limited Limited

NON-PERFORMING 9%
8% 8%
LOAN 7%
5.9% 6%
31st December,2016 6%
5.2% 5.4%
5% 4.8%
4% 3.9%
3.2% 3.4%
3% 2.8% 2.98%
2%
1%
0
Eastern IDLC Trust BRAC Islami Southeast Dutch-Bangla Pubali Prime The City United
Bank Finance Bank Bank Bank Bank Bank Bank Bank Bank Commercial
Limited Limited Limited Limited Bangladesh Limited Limited Limited Limited Limited Bank
Limited Limited

19 of 40
NEW IDEA! DOCTOROLA

DOCTOROLA
Doctorola.com is a tech-based startup whose purpose is to make healthcare service delivery easily accessible and
convenient, to make positive impacts in peoples lives. It is the pioneer online doctor appointment service platform
in Bangladesh, which provides information about doctors and appointments in real-time through a fully integrated
system. The company has displayed remarkable growth over the last two years, and recently, MBR had an opportunity
to have a one-to-one conversation with Mr. Mohammad Abdul Matin Emon, Founder, Managing Director & CEO of
Doctorola.

How it all started displaying relevant information like whether a doctors

Mr. Mohammad Abdul Matin Emon, an entrepreneur
at heart, wanted to establish a business which could
sustainably support his expenses, and growth, but also
create an impact. He convinced his friends (co-founders
of the company) of the importance of investing in
the healthcare sector, despite none of them having a
background in healthcare. After much deliberation,
the founders decided to contribute in the management
aspect of the healthcare service industry in Bangladesh.
Initially, they conducted a survey of 12 hospitals and
discovered that almost 70% of the patients were coming
from outside Dhaka, suffering long journeys and high
expenses. They also became privy to the common
phenomenon where everybody wishes to get treated
under the few prominent doctors
in Bangladesh, who are almost
always overbooked due to the large
demand of patients. Hence, Mr.
Abdul had the idea of establishing
Doctorola, an online doctor
appointment service platform
which would ensure that patients
had access to the doctors best for them, as opposed to
the best doctors.
Service Offerings
Doctorola help make online appointments for patients.
The company is not focused on getting people
appointments with the best doctors, but appointments
with the doctors best for them. The company also checks
whether the patient goes through with the appointment
and ensures that patients attend all follow-up checkups
with their appointed doctors.
The company is also dedicated to maintaining an
online directory of doctors which is updated regularly,
chamber location has changed or fees have increased or
appointment timings are different.
Doctorola answer around 400 to 450 medical queries
on a daily basis, either through their call center or by
means of Facebook chats. The company has a team of
10 trained agents and 5 in-house doctors who respond
to these sorts of queries. Trained agents match patients
symptoms and needs against a basic guideline and
refer to the type of doctor best suited for treatment.
When symptoms are too medically advanced, these
patients are referred to the in-house doctors who are
able to provide advice on the best course of treatment
or referrals to other doctors.
Doctorola host live shows on Facebook six days a
week, where specialists hold 45
minute sessions answering patients
queries via phone or Facebook
comments and Messenger. This
particular service is incredibly
popular and every show gets
between 20,000 to 45,000 views on
average. Additionally, Doctorola
hold live radio shows called Doctorolai Amar Daktar
in partnership with Colors FM Radio. Doctorola also
regularly publish a blog which covers a wide range of
topics of medical interest, written by a doctor, and has
over 200 video contents on different medical topics.
Overcoming Challenges
Financials
Initially, the founders invested their own money to
finance the development of the platform for Doctorola,
which took almost six months to complete. Later, they
were able to present their business idea to venture
capitalists, and raise investment capital to fund their

20 of 40
business. Doctorola is the first Bangladeshi startup to
raise investment funds using venture capital.
Doctors Mindsets
Initially, when the company first started out, doctors
were unwilling to sign up on Doctorolas platform,
unimpressed by the companys initiative, and having no
faith in the business proposition. After the first three
months of establishing the organization, Mr. Abdul
and his team were only able to convince 19 doctors to
join their platform. However, over the last two years,
Doctorola has been greatly able to overcome this
challenge by convincing doctors all over Bangladesh
of the benefit of joining its cause. Currently, there
are around 7,500 doctors who have partnered with
Doctorola, ranging from small and mid-level doctors
to well-known specialists. In the past, the company had
to spend hours trying to convince doctors to join their
cause; at present, there are around 20 to 25 new sign ups
on Doctorola, on a daily basis, with doctors proactively
contacting the organization themselves. Changing the
mindset of doctors and the processes of the hospitals
has been an immense challenge which Doctorola was
able to successfully overcome.
Patients Mindsets
People have a negative opinion regarding the
countrys healthcare sector most people believe
doctors to be swindlers incapable of providing the
right treatments, and hospitals to be businesses,
which are only focused on making money, not
patients welfare. This lack of faith in local doctors
abilities has pushed more people to embrace the
practice of going abroad for treatment, which has
led to the booming of the medical tourism sector.
Doctorolas biggest challenge till date has been
21 of 40
changing this mindset of patients; although there
has been some progressive change, there is still a
long way to go.
Future Aspirations
At present, Doctorola deals with around 500 patients
daily. The companys vision is to increase this number
to 30,000 patients by 2020, which would still only be
5% of the total number of people who require medical
attention in Bangladesh on a daily basis.
The company also offers discounts on hospital tests
to make treatments more affordable for the patients.
Currently, Doctorola is offering this benefit to 37
hospitals it intends to increase this number in the
future. The company is in partnership with 500 hospitals
at present; it aspires to be connected with every hospital
in Bangladesh in the future.
Doctorola is working on establishing more partnerships
to create more valuable products. The company intends
to bring telemedicine to Bangladesh within the next
two months. Telemedicine means remote consultation
a man, living in the rural areas, could opt to consult a
doctor in Dhaka over video conferencing.
Doctorola also proposes to bring health insurance to
Bangladesh to increase the affordability of treatment
for the citizens. Additionally, it wishes to create a
referral system, where, depending on a patients
needs, one doctor could refer him/her to another
doctor. A patient could visit the doctor in his village
who would recommend him to a specialist, provided
that his medical needs were beyond the local doctors
capabilities. Mr. Abduls ambitious plan is to create an
effective referral network in Bangladesh over the next 8
to 10 years, which will be commercially sustainable as a
business model.
 KEY
INFO
PRIVATE SECTOR CREDIT GROWTH SME CREDIT DISBURSEMENT

16.03%
in May 17
BDT 1128.98
July-March, FY 2016-17, 22.38% Growth Y-O-Y
bil

IMPORT MONETARY AND

CREDIT DEVELOPMENTS
11%
15% Industrial raw materials 39%
1892
9% Intermediate goods 9%
5% Net Foreign Assets of banking system
Consumer goods 11%
10% Others 15% 1892
Net Domestic Assets of banking system
Petroleum & petro.prodts. 5%
11% Machinery for misc. inds. 10% 879
39% Currency outside banks
Capital machinery 11%
6997
Deposits

Monetary and credit developments as of June 2017 (in Billions of BDT)

REMITTANCE 2016-17 2015-16

1.01 Jan 1.15

0.96 Dec 1.31

0.95 Nov 1.14

1.01 Oct 1.1

1.06 Sep 1.35

1.18 Aug 1.2

1.01 July 1.39

22 of 40
 ECONOMY AT
A GLANCE
llion
SEEING ECONOMIC
TREND IN DATA
SPREAD OF LENDING LIQUIDITY POSITION OF
& DEPOSIT RATE THE SCHEDULED BANKS
0.59%

7.62%
Specialised Banks
11.09% State owned Banks
4.85
4.84 Private Banks
41.20% (Other than Islamic)
4.8
4.76 Private Banks (Islamic)
4.72 4.73
4.7
4.71 4.69 Foreign Banks
4.65 4.69
4.65
39.50%

Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Total liquid assets for December 2015 was BDT 2577.94 billion

INFLATION EXPORT

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

2% 41%
6.98% 7.00%
6.19%
5.58% 5.33% 4.49% 6.89% 6.94% 7.37% 7.51%
6.53% 6.84%
JUTE WOVEN GARMENTS
5.10% 5.56% 5.41% 3.10% 3.07% 3.30% 3.44% 3.67%
3.18%
4.35% 4.30% 5.38%

42% 2% 19%
13%

Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 KNITWEAR FROZEN FOOD OTHERS
Inflation rate in June 2017 increases as non-sood inflation creeps up

23 of 40
YOUTH LEADERSHIP NSU YES! CLUB

NSU YES! CLUB

NSU YES! (Young Entrepreneurs Society) Club is the premier business club in North South University, dedicated to
youth development, and youth empowerment by means of various informative and challenging events, seminars and
workshops. Since its inception in 1994, the club has always thrived to create a platform to advocate future entrepreneurs,
and is currently renowned as the best student-run organization amongst all universities in the country. MBR recently
had an opportunity to have a one-to-one conversation with Farhana Shahnaz, the current treasurer of NSU YES! Club.

MBR: Tell us about the start of this club.
NSU YES! Club: The chief grounds behind the formation
of NSU Young Entrepreneurs Society (NSU YES!) Club
was to offer a powerhouse to the most creative and
passionate minds in the university where they could gain
the experience and knowledge needed to compete in the
vying world of leaders and executives. This is truly in line
with the YES! Motto - Join. Experience. Achieve.
The journey began back in 1994 with only a handful of
members. The founding president was Shayukh Ahmed
who led the club during 1994-1998. He is currently the
chairman and CEO of Xurtials, and he has devoted his
time and effort into making multiple ventures as an
entrepreneur. As founding general secretary, Chowdhury
Abd-Allah Quaseed was responsible for arranging the
seminars and entrepreneurship promoting events, which
the club is so famous for now.
The current Executive Board is composed of Fahim Abrar
(President); Aurthima Naznoor (Vice President- External
Affairs); Zardar Rafid Sayeed (Vice President- Internal
Affairs); Syed Rehan Ahmed (General Secretary); and
Farhana Shahnaz (Treasurer).
MBR: Briefly share the activities (competitions,
workshops, seminars) of this club.
NSU YES! Club: In 2017, NSU YES! Organized
Masters of Ideation, an inter-university business strategy
competition, for the fifth time in a row, which is renowned
as one of the flagship events of the club. The competition
kicked off with intra-university workshops and rounds
where teams from all across the nation faced cases and
eliminations, with each round being more challenging
than the previous.
The club is also responsible for the biggest marketing
competition in the country in terms of the sheer number
of participating teams and prize money, Ad Maker
Bangladesh. Last year, the club had 305 teams from
50 universities across Bangladesh commencing on this
creative fight to win the crown of the best Ad Maker,
which was an immense achievement. Furthermore, NSU
YES! also regularly conducts a series of seminars each
year called NSUers Meet Corporate Icons (NMCI)
to help students gain hands-on advice from corporate
leaders on how to prepare for the professional life that
awaits them in the future.
MBR: Briefly describe your recruitment process.
What qualities do you look for in potential members?
NSU YES! Club: The journey to becoming a fully-
fledged Yes!er (member of NSU YES! Club) is a thorough
and exhaustive one. Recruitment is held only once a year
during the Spring semester. Interested students have
to fill out a form and face the initial interview round.
Selected applicants may pass through to the evaluation
stage which is composed of various rounds that help
determine potential skills of the participants. This stage
is essential as only a handful make it through to move
on to the next stage of the recruitment process. Selected
members prepare for the final interview with the
Executive Body of NSU YES! who then narrow it down
to the future flag bearers of the club.

24 of 40
NSU YES! Club expects all of its members to display
remarkable communication and leadership skills, while
also being adept at multitasking, since these qualities
are essential for success in the future professional world.
However, the qualities which the club searches for most
in its members are passion and diligence, the kind that
can be harnessed into bearing a vision someday.
MBR: What challenges do you face? How do you
overcome them?
NSU YES! Club: Just like every organization out there,
one of the biggest priorities of NSU YES! Club is to keep
its members as involved and interested in the club, as
possible. The club considers this their biggest challenge,
especially once an event ends. In order to keep the team
spirit going, the club came up with Member Development
Programs, and Leadership Programs, which include
competitions for debate, writing, and even sports. These
activities not only keep the team spirit going but also help
build and strengthen rapport amongst existing members.
Another common challenge which the club faces
regularly is helping members balance their club and
academic obligations. All the events hosted by the club
require intense commitment from all the members in
terms of time, and both physical and mental efforts.
Juggling club duties with academic responsibilities is
especially difficult if events overlap with exam sessions.
Hence, the seniors in the club work to help out the newer
members deal with both responsibilities.
MBR: How do you want to see your members down
the line once they get in the professional world?
NSU YES! Club: It is quite a well-known fact that most
of NSU YES! Clubs respected alumni have either secured
25 of 40
positions in respected multinational corporations, or
have taken the initiatives to start their own organizations.
Following in that spirit, the club expects its current and
future members to carry on this legacy and achieve
similar feats. The club believes that wherever YES!ers go,
they should be able to triumph against all odds, due to
the plethora of educative and unforgettable experiences
NSU Yes! has given them.
MBR: What are the clubs plans for the future?
NSU YES! Club: The clubs plans for the future include
wishing to not only continue hosting the aforementioned
three events successfully every year, but also to take
these events to greater heights with every passing year.
In addition to that, the club has plans to integrate with
youth oriented organizations such as SBYA (Social
Business Youth Alliance) and GDG (Google Developer
Group) Sonargaon to help build a forum for its members
which they can use to build networks and accelerate.
Just like every organization
out there, one of the
biggest priorities of NSU
YES! Club is to keep its
members as involved and
interested in the club, as
possible. The club considers
this their biggest challenge,
especially once an event
ends.
 ANIS A. KHAN
TRAILBLAZERS MANAGING DIRECTOR & CEO, MUTUAL TRUST BANK LIMITED.

Anis A. Khan
Managing Director & CEO,
Mutual Trust Bank Limited.
Anis A. Khan, a Fellow of the Institute of
Bankers, Bangladesh (IBB), is the Managing
Director and CEO of Mutual Trust Bank Limited
(MTB). Prior to his current job, he served as the
CEO and Managing Director of IDLC Finance
Limited for six years. For 21 years, he was engaged
in a variety of roles with the then British-owned
Grindlays Bank plc. and its successors ANZ Grindlays
Bank and Standard Chartered Bank, both in Bangladesh
and overseas. Recently, MBR had the privilege of having
a one-to-one conversation with Anis A. Khan to get an
idea about his professional life, his insights on the current
financial sector of Bangladesh, his areas of interest and
experiences in life.

Childhood training courses, where he made the acquaintance

Anis A. Khan passed a wonderful childhood,
surrounded by a flock of family members. Being
the eldest in his family, he grew up amidst love and
support of his family and assorted uncles, aunts, and
cousins. Having been raised in such an affectionate
environment, Khan had certain virtues inculcated in
him from his early life.
Grooming at Grindlays Bank
Khan started his professional career as a Management
Trainee in Grindlays Bank p.l.c. At that time, the
Management Trainees of Grindlays Bank were
groomed and trained in such a manner that they
could be placed in crucial positions as they progressed
through their professional life. He had the opportunity
of learning right from scratch. As a Management
Trainee, he was sent abroad, quite frequently, on
of many people from across the world, which helped
enrich his experiences and increase his exposure to
international banking practices.
After the completion of his Management Trainee
program in 1983, he was immediately appointed as
the Manager of New Market Branch of Grindlays
Bank p.l.c., which was then located in the Balaka
Cinema Building, Dhaka. It was quite a coincidence
that this bank branch was where he had his account
in his Dhaka University days and had come to know
the staff quite well. Although the employees of that
branch initially showed skepticism about him due
to his young age and perceived inexperience, he was
eventually able to win them over with his friendly
personality and kind nature.
After serving as the Manager for a brief spell, he was
summoned one day in June 1984 to the banks Head

26 of 40
CAREER SNAPSHOT
CURRENTLY SERVES AS:
Vice Chairman of Industrial & Infrastructure
Development Finance Company Limited
(IIDFC)
Independent Director and Chairman of the
Board Audit Committee of Berger Paints
Bangladesh Limited (BPBL)
Director of BD Ventures Limited
Chairman of the Board of Governors of the
Association of Bankers, Bangladesh Limited
(ABB)
Member of the Council of the Institute of
Bankers, Bangladesh (IBB)
Member of the Board of Governors of the
Dhaka School of Bank Management
Vice President of the Bangladesh Association
of Publicly Listed Companies (BAPLC)
Life Member of the SAARC Chamber of
Commerce and Industry (SAARC CCI)
Trustee Treasurer of the CSR Centre
PREVIOUSLY SERVED AS:
Director of Eastern Bank Limited, 2004
2008
Independent Director of Chittagong Stock
Exchange Limited (CSE), 2004 2008
Director of the Credit Rating Agency of
Bangladesh Limited (CRAB), 2004 2009
Bangladesh Rating Agency Limited
(BDRAL), 2011 2013
Vice President of the Metropolitan Chamber
of Commerce & Industry, Dhaka (MCCI) for
two terms 2014 & 2015
Chairman of Bangladesh Leasing & Finance
Companies Association (BLFCA), 2006
2009
Chairman of Primary Dealers Bangladesh
Limited (PDBL), 2014 2016
Chairperson of the SWIFT Member & User
Group of Bangladesh (SMUGB), 2014 2017
27 of 40
Office at Hadi Mansion, 2 Dilkusha Commercial Area,
Dhaka to meet Mr. Alan J Cooper (the Country Head
at that time), and asked to take over the role of the
Country Planning Manager (equivalent to todays
Chief Financial Officer). Khan was apprehensive
about taking on this responsibility, as he did not have
an accounting certification; however, Mr. Cooper was
quick to assuage his fears and encouraged him to take
on the role, which proved to be invaluable for his
future career progression.
Rebranding, and a new beginning
Mr. Alan Cooper immediately sent Khan off to the
banks Regional Head Office in Mumbai (Bombay in
those days), India for on-the-job-exposure under the
supervision of Mr. Arun Nangia (an engineering and
business graduate who was the CFO equivalent of
South Asia at that time). Nangia set up a comprehensive
training program for him and he was sent on rotation to
large departments across the Regional Head Office and
Bombay Main Branch. He had to learn the intricacies
of bank accounting including segmented balance sheets
and varied calculations relating to returns, productivity,
costs, etc. It was an incredible learning experience, by
which he was fast-tracked and prepared for his Country
Planning Managers role back in Dhaka.
In March 1986, he was appointed as Manager,
Foreign Trade at the banks area office at Agrabad,
Chittagong. He was again sent off to Mumbai on
an intensive residential training course Finance
of Foreign Trade (FOFT) conducted by Grindlays
International Training (GRIT), which equipped him
with the knowledge of foreign exchange and trade
operations including letters of credit, bills, guarantees
and indemnities. At that time, the banks major part
of import and export business was conducted from
Chittagong, and the volumes were significant and
work pressures quite intense.
In mid-1987, Khan was appointed as Senior
Relationship Manager, Corporate Banking at the Area
Managers Office in Chittagong. He then went on to
become the Area Operations Manager, Chittagong, after
which stint he headed Operations, Administration,
Data Centres and Corporate Affairs at the banks Head
Office in Dhaka. He returned to Chittagong for one last
stint as the Head of Business Banking and Area Head.
He was then given the responsibility of executing
the Business Banking Proposition Project (BBSP)
of ANZ Bank in Bangladesh, under the guidance of
the Country Head Muhammad A. (Rumee) Ali. This
project was executed in other countries by McKinsey
& Co, International Consultants, and a dedicated team
from the banks headquarters in Melbourne, Australia.
In Bangladeshs case, this was not to be so, and, thus,
a determined Rumee Ali sent Khan to Melbourne,
Australia in 1999, to learn about the project and its
complex toolkits. On his return to Dhaka, Khan set
about to execute the project, which was successfully
accomplished in December 1999, saving the bank
more than AUD 150,000 in fees and expenses. As a
result of this project, the management and business
flows, processes, and procedures in the Corporate
Banking Division of the bank was fully modernized
and made customer-friendly.
In 2000, Standard Chartered Bank (SCB) acquired
ANZ Grindlays Bank branches and businesses all
the way from Greece to Bangladesh. Rumee Ali,
who by then had become the Country Head of both
ANZ Grindlays Bank and Standard Chartered Bank
in Bangladesh, appointed Khan as the Country
Integration Manager to spearhead the merger process
of the two banks in Bangladesh, under his supervision,
mentoring, and guidance. He was also asked to take on
the role of the newly created position of Head of Legal
& Compliance of both the banks.
The merger process went well despite many
challenges, on completion of which he was selected
as an expatriate employee in 2002 by SCB and posted
to Dubai, United Arab Emirates as the Regional Head
of Legal & Compliance, The Gulf. This was another
exciting learning role, giving him rich exposure to all
parts of the bank across the UAE, Oman, Bahrain, and
Qatar. While in Dubai, Khan was offered the role of
28 of 40
CEO & Managing Director of IDLC in early 2003. He
was initially reluctant to take up the job and return
to Bangladesh, so soon after settling down in Dubai
and the varied banking exposure he was receiving.
However, his mentors and guides, both in the UAE
and Bangladesh, convinced him to return and take a
leadership role in the countrys expanding financial
sector.
Khan had spent 21 years in total with Grindlays Bank
p.l.c. and its successor banks.
Tenure at IDLC Finance Limited
At the time Anis A. Khan joined IDLC Finance
Limited, it used to be called Industrial Development
Leasing Company of Bangladesh Limited and had
only two branches one in Chittagong and the other
with the headquarters at Hadi Mansion, 2 Dilkusha
Commercial Area, Dhaka. He believed that IDLC
had the potential to be a company offering multiple
services, and should not only be limited to leasing.
Therefore, with the support of the Board of Directors,
he ushered IDLC into an era of diversification and
expansion.
He fondly remembers his colleagues during the
initial IDLC days - Syed Ehsan Quadir, currently the
Managing Director of United Finance Limited, Md.
Minhaz Zia, former Managing Director of SABINCO
and now Chairman of Asian Tiger Capital Partners,
Arif Khan, the present CEO and Managing Director
of IDLC Finance Limited, the late Ashfaq Ahmed
who headed Corporate Finance, Ziaul Hoque Khan,
CFO, Bilquis Jahan, Head of Human Resources
and now carrying out the same role at BRAC Bank
Limited and M. Jamal Uddin, currently IDLC Deputy
Managing Director, all of whom he says are brilliant
and accomplished finance professionals, top managers
and inspirational leaders. They and the other
colleagues were supportive and helpful during the first
phase of expansion and diversification that was most
enthusiastically launched across the country. Under
his leadership, the company began offering structured
finance products, syndication finance services, SME
loans, home loans, work order financing, factoring,
an array of attractive deposit products and schemes,
capital market and merchant banking products and
services, all of which were a resounding success with
the rapidly expanding clientele.
He also believed in expanding the footprint, and the
company set out to open branches in the major areas
of the capital city like Dhanmondi, Gulshan, Uttara
and in Bogra. The Chittagong Office was relocated,
expanded, and made most customer-friendly. After
a number of attempts, Khan was finally successful in
convincing the IDLC Board to purchase an entire floor
in Bays Galleria, a landmark building in Gulshan 1, to
which the Head Office was relocated from Dilkusha
in April 2006. He set up IDLC Securities Limited
as a fully owned subsidiary of IDLC and the stock
brokerage firm quickly became one of the leading ones
in the country. He then set up the Merchant Banking
business under a separate Division, which also proved
to be successful. He also believed that the companys
name was too long and difficult to remember. Thus,
he proposed changing the name to IDLC Finance
Limited, which idea was welcomed and approved by
the companys Board of Directors. This name has now
become well established and well branded across the
country, giving instant recognition to its products
and services and activities. Khan recounts his six
years at IDLC to be a rewarding, wonderful, and an
unforgettable experience.
His work at MTB so far
Anis A. Khan joined Mutual Trust Bank Limited (MTB)
as its Managing Director and CEO on April 15, 2009.
Interestingly, he again started working in an office in
Dilkusha Commercial Area, where the headquarters
of MTB was located. The members of the MTB Board
of Directors are renowned entrepreneurs and business
leaders of the country, and they gave Khan a clean
chit to build the bank anew. As is his hallmark, he
unleashed an era of expansion and diversification and
29 of 40
rebranding at the bank to help propel it forward.
Now in his ninth year at the bank, Khan, with the
support of his management team and other colleagues,
has expanded the branch network from thirty-six (36)
to one hundred eleven (111) and set up fourteen (14)
MTB Smart Banking Kiosks and two hundred and
thirty-four (234) ATMs. The bank has also introduced
chip-embedded Visa and MasterCards, placed over
3,000 POS machines with merchants, opened four (4)
bill collection booths and two (2) foreign exchange
booths, and a lounge at Hazrat Shahjalal International
Airport (HSIA), Dhaka. The bank introduced Agent
Banking services in June 2016, and has in just over a
year, opened twenty-five (25) such centers across the
country, as part of its financial inclusion endeavors.
The bank has also set up a stock brokerage subsidiary,
MTB Securities Limited in September 2010, which
has the largest branch network in the country and is
one of the leading firms in terms of volume. Another
subsidiary company, MTB Capital Limited (MTBCL)
was inaugurated in April 2011 and then MTB
Exchange (UK) Limited started operating in London,
United Kingdom in February 2011.
In October 2010, MTB moved its Corporate Head
Office to MTB Centre in Gulshan, Dhaka from where
the banks business and operations are now managed
from a well-equipped modern and functional building.
The bank also inaugurated its own 12-storied building
- MTB Tower, on Kazi Nazrul Islam Avenue (Bangla
Motor) in October 2014, which houses amongst
other divisions and departments, a state-of-the art
auditorium and conference centre.
MTB is now well poised to expand its business and
clientele and become one of the most sought-after
banks in the country and an employer of choice for
the younger generation coming into the work force.
Leadership in Bank and NBFI
What makes Khan an erudite professional is the
experience of leading both a bank and an NBFI, and
being the Chair of both the concerned associations,
namely: (Association of Bankers, Bangladesh Limited
(ABB) and Bangladesh Leasing & Finance Companies
Association (BLFCA). As opined by Khan, while
both banks and NBFIs (Non-banking Financial
Institutions) are quite similar in terms of processing
loans of different types and having similar capital
market responsibilities, they have certain underlying
differences. Although both institutions offer similar
services in certain sectors, banks operate on a larger
scale. They are licensed to conduct multifarious
operations, which makes them versatile in terms
of offering services in the areas of Retail Banking,
Corporate Banking, Islamic Banking, SME Banking,
and so forth. Banks also deal with cash transactions
and have a variety of payment instruments, which
NBFIs do not. Additionally, banks have to worry
about both physical and cyber security and remain on
constant guard against thefts, frauds, and forgeries.
Compliance with rules and regulations including
Anti-Money Laundering (AML) and Combating the
Financing of Terrorism (CFT) are other key areas,
banks have to constantly concentrate on.
Thoughts regarding the Financial Sector
NBFI Sector
Khan believes that the NBFI sector of Bangladesh
is well matured now. As the Vice Chairman of the
Industrial & Infrastructure Development Finance
Company Limited (IIDFC), he has the opportunity to
know how well or poorly an NBFI is performing on
a monthly basis. Despite not working as an executive
in this sector anymore, he still takes keen interest in
how the companies are doing and is well informed
about each companys performance. He remarked
that companies like Uttara Finance, Phoenix, IPDC,
and United Finance were all doing well, while IDLC
Finance Limited and LankaBangla had profits,
which were greater than many of the banks. He also
appreciated the present upward growth trend of IPDC
Finance following a complete transformation.
Banking Sector
Earlier, when Bangladesh had low foreign reserves,
and the financial sector was at its nascent stage,
Bangladesh Bank was very strict in regulating both
30 of 40
the banking and non-banking financial sectors in this
area. However, Khan believes that since Bangladesh is
more prosperous now and has better macroeconomic
indicators and higher foreign reserves, some
liberalization would be welcome for the marketplace
and entrepreneurs. Although, there have been many
relaxations in regulations, it is still not enough in
comparison with other countries. He believes that
especially in trade (exports and imports), there
should be more liberalization; and the exporters and
importers should be able to conduct business, free of
hassles, up to certain reasonable limits.
Reforms both sectors should implement
Mr. Khan previously served as the Chairman of
Bangladesh Leasing & Finance Companies Association
(BLFCA), and is currently serving as the Chairman of
the Board of Governors of the Association of Bankers,
Bangladesh Limited (ABB).
HE IS THE ONLY KNOWN
INDIVIDUAL TO HAVE
HELD BOTH ROLES, AND HE
BELIEVES THAT IT PUTS HIM IN
A UNIQUE POSITION TO OFFER
VALUABLE INSIGHT ON BOTH
THE BANKING AND NON-
BANKING SECTORS.
Khan believes that there are too many banks and
non-banking financial institutions currently in
operations, for a country of Bangladeshs size. He
recounts his positive experiences as the head of the
Integration team in Grindlays Bank, which led him
to appreciate the favorable business consequences of
Mergers & Acquisitions for any company. He believes
that a number of banks, and even a number of NBFIs
should form mergers and become larger companies.
He remarks that although mergers initially creates
downsizing of jobs, they are imperative to ensure
the continued success of a business and has long-
term positive implications. Only by focusing on the
business, can help people later on.
The Art Aficionado
Anis A. Khans passion for art was cultivated from a
young age. When he was in Faujdarhat Cadet College
(FCC), he wished he could paint as well as his friends
did, however he says he was not gifted in this area.
His fondness for art began with his admiration of
his friends sketches and paintings. When he was a
teenager, he used to cut out photos of paintings from a
calendar published by a German company called Bayer,
and paste it on his walls. Looking at his wall adorned
with these pictures, helped grow his appreciation for
the works of the old masters like Leonardo Da Vinci,
Raphael, Rembrandt, Van Gogh, Monet and Picasso
and led to his yearning to collect paintings for himself.
When he ventured into the professional world, he
started his collection by buying paintings of typical
Bangladeshi landscapes, costing around BDT 2,000
or BDT 3,000. However, he remembers that he could
not even afford those and often paid the art dealers in
installments. He even used to take loans to be able to
buy paintings.
He reminisces an incident where Nur Mohammad,
the proprietor of the Divine Art Gallery in Chittagong
(and now also owner of another one in Dhaka),
offered to sell him five paintings of Quamrul Hasan for
BDT 100,000. Khan was unable to buy the paintings,
even after Mohammad gave him an option to pay
BDT 20,000 and repay the rest later. He believes that
those paintings would easily be worth more than BDT
1,000,000 each now. Although he regrets not being able
to buy those paintings, he believes that the decision he
took back then was wise.
Over the course of his long and exciting career, he
had the good fortune of making the acquaintance of
many artists, and took to frequenting art exhibitions
and galleries. These interactions and visits helped
fuel his appreciation and love for art, and slowly,
after collecting for many years, he has now amassed
quite a significant collection of a variety of paintings
created by renowned painters of the country. He
is also now very happy to serve as a member of the
Board of Trustees of the Society for the Promotion of
Bangladesh Art (SPBA).
Key to success: Being people oriented
Khan has always been a very sociable person and cares
deeply about people. Whether it is a family member,
31 of 40
a close friend, a professional acquaintance, or an
employee - he makes it a point to wish everyone
on his or her birthday and anniversary. Even if he
is physically unable to meet or talk to these people,
he ensures that he sends them little notes or text/
WhatsApp messages, on their special days. He likes
making people feel special; this may be in the form
of attending weddings or by consoling a bereaved
person. He believes in sharing whatever he has
with people around him, as he feels that material
possessions are temporary, but people and memories
are forever.
Khan puts a lot of emphasis on being people-oriented.
He said that he has had a fondness for people all
through his life, and he tries hard to be thoughtful
and caring. These qualities, apart from making him
a revered and much sought-after professional, have
helped him earn many cherished friends for life.
Advice to young professionals
Khan marvels at the rich variety and amount
of information available on the internet now.
He believes this is a great boon and a ready
tool for our young professionals, who can
easily mine the knowledge available, in a split
second, and enrich their thoughts and excel
in their work. He remarks that our younger
generation has better access to knowledge
and information due to the technologically
advanced era that we live in. He believes
that they should take advantage of this
vast encyclopedia of knowledge, and tailor
themselves to whatever suits their talents,
interests and passion. He wishes young
people should never stop learning and they
must continue to expand their knowledge
base. Khan believes that by utilizing the
sources of information now so available at
their fingertips, young people should choose
what they feel most drawn to and excel at
that. Working hard in school and colleges,
and doing well in exams, both written
and practical, will lead to rich academic
attainments, which in turn will greatly help
them get ahead in their professional career.
INDUSTRY

UPDATE
BOOM TIME FOR PLASTICS
Due to diversification in
PLASTIC the manufacturing process,
Bangladeshs plastic industry is booming and
contributing significantly to the national economy.
Currently, there are 3000 plastic products
manufacturing units which employ around 1
million people. Hygienic plastic pallets, used
to package raw materials of various industrial
products, are now being manufactured locally.
Plastic products are exported to more than
106 countries. The basic material required for
producing plastic products is polymer. The lack
of poly-olefin units ensure that the country imports
100% of polymers in addition to 150,000 metric
tonnes of raw plastic, per annum. Additional
challenges include a lack of modern technology,
world-standard knowledge, skills, and experience,
and capital resources. However, existing reserves
of natural gas and petroleum fields offer prospects
of setting up a poly-olefin plant in Bangladesh.

PHARMA EXPORTS PHARMA

IN MILLIONS OF USD
PHARMA SECTOR PROJECTED
FY 17* 90.3
15% ANNUAL GROWTH
FY16 81.2
According to research conducted by LR Global,
FY15 72.6 Bangladeshs pharmaceutical sector could grow at 15% in
the coming five years, due to growing local markets and
FY14 59.8 new export frontiers. Currently, the industry meets 98% of
domestic demand, and exports to over 125 countries. The
growth of the sector can be contributable to two effective
FY13 48.3
policies: Drug Control Ordinance 1982 (forbade foreign
pharmaceuticals from selling imported drugs) and the World
FY12 44.3 Trade Organizations agreement on Trade-Related Aspects
of Intellectual Property Rights (permitted the country to
FY11 41 reverse engineer patented generic drugs). The relaxation
of TRIPS has been prolonged to 2032. The pharmaceutical
FY10 36.2
industry has the potential to emerge as a world-leader of off-
patented generics medicine, aided by backward integration,
quality research, and skilled human resources. The industry
0 20 40 60 80 100 could also become the next thrust sector after RMG.

32 of 40
HUGE GROWTH POTENTIAL
IN STEEL SECTOR

Bangladeshs steel
STEEL manufacturing sector has
an immense growth potential, contributable to
growing construction activities, rising demand
and positive trade prospects. Large investments
by steel mills ensured that the annual billet
production has risen to almost 40 lac tonnes,
putting the country on the course to become
self-sufficient in billet manufacturing. Billet
imports, due to the duty hike, and increased
local production, decreased by 34% to 11.57 lac
tonnes, year-on-year. The country may even be
able to export billet soon. Scrap imports rose by
99% to 21.64 lac tonnes, to support the industrys
move into backward integration. Presently,
Bangladeshs annual steel consumption is around
eight million tonnes, which may grow to eighteen
million tonnes by 2030. Coordinated investment
and bilateral cooperation with India could propel
the local industry to new heights in the near future.

TELCOM
4G IN BANGLADESH
Private mobile operators predict low returns against the
BDT 22,600 crore required to be invested for 4G services in
Bangladesh. This is contributable to high spectrum charges
and taxation, coupled with low 4G device penetrations and data
price rates. The government recently proposed base prices/
megahertz to be USD 30 million (900 MHz bands), USD 35
million (1,800 MHz) and USD 27 million (2,100 MHz). The
operators demand for price/MHz to be below USD 15 million,
reasoning that revenues were decreasing against increasing
data consumption. The top three mobile operators have
already tested their 4G networks and found 50 100 Mbps
of upload and download speed, which is significantly higher
than existing 3G services. Currently, only mobile operators
Grameenphone, and Robi are offering their customers the
opportunity to convert their existing SIMs to 4G Sims. Both
the government and the operators are optimistic to launch 4G
services as soon as possible in the country.

33 of 40
 MONTH IN BRIEF

Trade deficit Home textile exports Africa: Cheaper cotton

up 42% as a
FDI fail to reach heights
despite having huge
source for Bangladesh
textile sector due to its
result of slower
growth of exports
up by potential in home textile,
as duty benefits were
cost effectiveness

extended to Pakistan, a
compared to
higher growth of
almost cotton grower whereas
Bangladesh is a 100%

28%
cotton importer
imports

Portfolio investment in the stock

market jumped about six times
to USD
324 million.

Bangladesh Savings
18
China is the third certificates sell like
25
European Union (28) largest apparel hotcakes with 55%
Bangladesh
28
161 exporter after growth in FY17.
Vietnam China and the Savers switch
117
India EU: World Trade sides as banks
Organization squeeze
(WTO)
Top ten exporters of clothing, 2016 interests on
(USD billion and annual percentage change,%)
deposits.

Bangladesh will South Asia Brexit, currency

be the 30th largest ADP becomes global devaluation affect
Bangladesh exports
Liquefied Natural
economy in 2022
: Statistical Times spending Gas (LNG) hotspot
as Bangladesh
adversely, with
export earnings from
the UK falling by
based on World
lowest enters market. Only
Economic Outlook
by International
in eight
India and Pakistan
currently import LNG
in South Asia, taking
6.31%
Monetary Fund in a combined 25
(IMF)
years million tonnes, or 8%
of global demand last
year.

34 of 40
 MONTH IN BRIEF

Local Banks opt for Bangladesh, Vietnam

bonds to raise to push global cotton
manufacture demand up next
of bikes their capital in year. Yarn-spinning
increase after line with Basel mills in Bangladesh
III requirements and Vietnam up
investment their production and
for their cost-
from Honda, China continues on a
effectiveness steady course as the
Suzuki, Bajaj, worlds largest textile
Hero. manufacturer

Textile sector GP starts SME credit Fresh initiative

dominates campaign to disbursement by DSE to list
turnover after convert SIM cards jumps by 22.83% more companies,
government into 4G enabled in July-March especially MNCs
proposed to and SoEs to make
SIMs worth of BDT market more vibrant
reduce corporate 1128.98 billion and stable
tax on textile from BDT 919.10
sector. billion

Credit cards Central Flood causes

to get costlier as Bank resumes BDT 36 million
the new circular loss to livestock
by Bangladesh
selling US sector. Around
Bank states the dollar to 8,332 cattle head,
rate cannot be stabilise poultry birds die,
more than 5% exchange The Department
from the highest of Livestock
market Services (DLS)
interest rate on
any loan offered statistics show
by the bank.

35 of 40
For the Record

WELL 50%
Bangladesh accounted for a
share in the GCC labor

NOT SUPPORT
market, ahead of India and
Pakistan

GROWTH AT
according to a statistics by
Indianexpress

THE COST OF
INFLATION. Import duty
FAZLE KABIR, Governor, Bangladesh Bank
in the wake up recently published cautious Monetary
cut has led to
Policy Stance for Jul-Dec,FY17-18
the decline in
'Respect paddy prices
is a two-
This significantly,
way street process
as stockists
and Uber's is cost
community started selling
guidelines
effective
out their
help and
paddy fearing
reiterate easier.
that MASHRUR AREFIN,
a fall in prices
clearly and Additional Managing Director
and Chief Communication GENERAL SECRETARY KM LAYEK ALI,
concisely Officer of City Bank in
response to banks opting for
Bangladesh Auto Major Husking Mill Owners
Association (BAMHMOA) on recent plunge in
in both bonds to raise capital rice price

English and
Bengali'
IT WONT BE FAIR IF THE PRICE IS HIKED
said Uber in a
statement announcing WITHOUT ANY VALID REASON.
their 'community
guidelines' for both GHULAM RAHMAN, President of Consumers Association Bangladesh on
riders and drivers hike of edible oil price twice in this calendar year

36 of 40
ANALYTICS
SEEING
TRENDS
IN THE
DATA

THE WAY WE WORK NOW Home loans in the banking sector have seen steady growth
over the last decade. Informal home loans arise out of
TRENDS IN HOME savings, and loans from friends, and family. Formal home
LOANS OF FINANCIAL loan providers include banks (around 80%), financial
INSTITUTIONS institutions, and specialized housing finance providers.
Total outstanding home loans provided by the formal sector
had a CAGR of 20.02% in 2016. As of June 2016, Private
Commercial Banks provided the highest amount of loans,
and Micro-Credit Lenders the lowest. Delta BRAC Housing
(DBH), the leading specialized housing finance institution,
sources most of its home loans from customer deposits.

SHARE OF HOME LOAN PROVIDERS IN 2016 (IN %)

0% 4% 8% 12% 21% 55%

MCLS FCBS NBFIS SP.FIS SOCBS PCBS

Total Outstanding Home Loan Outstanding Home Loan of PCBs Outstanding Home Loan of BHBFC
FY-05-16 ( BDT billions) (in BDT billions) (In BDT Billions)
600 350
35
500 300 30
250 25
400
200 20
300
150 15
200
100 10
100 50 5
0 0 0
FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY
05 06 07 08 09 10 11 12 13 14 15 16 05 06 07 08 09 10 11 12 13 14 15 16 05 06 07 08 09 10 11 12 13 14 15 16
Source: BB Source: BB Source: BB

Outstanding Home Loan of DBH Trend of Home Loan to Total Loan % of NPL to Home Loans & Total Loans
(In BDT Billions) 9.00%

7 8.00%
40
35 6 7.00%

30 6.00%
5
25 5.00%
4
20 4.00%
15 3
3.00%
10 2
2.00%
5 1
1.00%
0
FY FY FY FY FY FY FY FY FY FY FY FY 0
0.00%
05 06 07 08 09 10 11 12 13 14 15 16 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2006 2011 2014 2016
Source: BB Source: Survey Data Source: Survey Data Total Loans Home Loans

FCB = Foreign Commercial Bank

NBFI = Non Banking Financial Institution ABOUT THE RESEARCH
Sp.FI = Specialized Financial Institution The discussion paper Home Loan of Banks: Trend and Impact, published by
SoCB= State-owned Commercial Bank Bangladesh Institute of Bank Management (BIBM), outlines the trends in home
PCB = Private Commercial Bank loans in Bangladesh over the last decade. Team members include Md. Mohiuddin
BHBFC = Bangladesh House Building Finance Corporation Siddique, Professor and Director (DSBM), BIBM; Md. Alamgir, Associate Professor,
DBH = Delta BRAC Housing BIBM; Dr. Mohammad Tazul Islam, Associate Professor, BIBM.

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CAPITAL MARKET REVIEW MONTHLY MARKET STATISTICS

Monthly Commentary l

Market extended the gaining momentum built up in the
previous month. Supported by budgetary incentives,
coupled with quarter end earnings expectations,
investors opted for calculative optimism and went
hunting values in large and established sectors.
Impressive declarations from Telecommunication,
Bank and NBFI sector pumped up excitement in the
market. Resultantly, these three sectors led the market
in terms of both gain and turnover. Telecommunication
gained 10.0% this month, as GP delivered spectacular
second quarter result. GP advanced 10.2% in the
month of July and 37.4% during January-July, 2017
period, becoming a USD 6 bn company. As the month
progressed, impressive earnings declarations in bank
and NBFI inspired similar reaction in the respective
sectors. Notably, RUPALIBANK advanced 53.6%
in July, followed by 27.8% gain DUTCHBANGL
during the same period. Heavyweight BRACBANK,
ISLAMIBANK and CITYBANK advanced by 8.8%,
10.2% and 12.3%, respectively. NBFI sector also made
substantial gain as ICB and IDLC advanced by 11.2%
and 13.6%, respectively.
Broad index DSEX advanced 3.6% in July, while DS30
advanced by 2.9%. The gaining momentum attracted
investors from the sideline, pushing up activities
significantly. Average daily turnover jumped up to
be BDT 9.5 bn, compared to only BDT 5.6 bn in the
previous month. During this month, all the sectors
stayed positive except for Pharmaceuticals (-1.2%) and
Fuel & power (-0.1%).
Meanwhile, MSCi Frontier market index advanced
1.8% this month. Bangladesh outperformed its regional
peers, this month. Among the regional peers, Pakistans
market declined by 1.2% amid turbulence in political
scenario. Sri Lankan market also were on the back foot
with a decline of 1.6%. Vietnam, meanwhile stayed flat
(+0.9%).

Monthly Market Statistics l

Index Movement

Indices Index Point, July 2017 1M Return 3M Return YTD Return 3Y Return

Bangladesh

DSEX 5,860.6 3.6% 7.0% 16.4% 32.4%

DS30 2,143.5 2.9% 6.3% 18.4% 31.8%

DSES 1,315.2 1.4% 4.1% 10.3% 30.9%

Peer Countries
Pakistan (KSE 100) 46,010.5 -1.2% -6.7% -3.8% 51.8%
Sri Lanka (CSE - All Share) 6,637.4 -1.6% 0.4% 6.6% -2.6%
Vietnam (VNI) 783.6 0.9% 9.2% 17.9% 31.5%
563.7 0.4% 4.9% 12.9% -18.7%

MSCI Frontier Markets Index 574.1 1.8% 6.1% 15.0% -18.5%

All returns are Holding Period Return

Market Statistics (July, 2017) Graph: DSE Turnover and DSEX

Market Statistics 31-Jul-17 29-Jun-17 % change

Mcap All (USD mn)* 49,099.4 47,112.1 4.2%

Mcap Equity (USD mn) 41,682.0 39,705.3 5.0%

Daily Avg. Turnover (USD mn) 117.9 69.9 68.6%

*Equity+Mutual Funds+Debt

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Top Twenty Market Cap (July, 2017)
Daily Avg. Turnover
DSE Code Sector Mcap1 (USD Mn) 1M Return 3M Return YTD Return 3Y Return
(USD Mn)

GP Telecommunication 6,351.5 1.7 10.2% 12.4% 37.4% 44.2%

SQURPHARMA Pharmaceuticals & chemicals 2,404.4 2.0 -2.5% -0.3% 13.5% 63.5%

BATBC Food & Allied 2,246.1 0.4 6.8% 18.5% 24.6% 31.3%

ICB NBFI 1,524.0 1.1 11.2% 1.2% 85.9% 58.1%

BRACBANK Bank 929.2 2.6 8.8% 20.6% 66.2% 355.4%

LAFSURCEML Cement 872.3 0.9 -3.6% -7.1% -25.6% -26.5%

RENATA Pharmaceuticals & chemicals 857.1 0.1 -1.9% 2.8% 5.0% 75.9%

UPGDCL2 Fuel & Power 819.2 0.4 -1.6% 15.4% 28.6% N/A

OLYMPIC Food & Allied 711.7 0.6 3.1% 3.6% -6.7% 107.4%

ISLAMIBANK Bank 708.4 0.9 10.2% 13.6% 23.2% 59.6%

TITASGAS Fuel & Power 621.6 0.2 0.2% 1.6% 2.6% -24.4%

BERGERPBL Miscellaneous 607.9 0.0 0.7% 0.5% -6.2% 117.3%

BXPHARMA Pharmaceuticals & chemicals 561.5 1.1 -1.2% 0.6% 38.2% 197.7%

SUMITPOWER Fuel & Power 545.3 0.6 1.0% 2.5% 11.4% 49.4%

CITYBANK Bank 455.9 8.4 12.3% 30.8% 65.7% 253.9%

MJLBD Fuel & Power 453.2 1.6 -0.2% 11.8% 1.3% 100.4%

MARICO Pharmaceuticals & chemicals 401.2 0.0 0.6% 2.6% 11.9% 7.6%

BSRMSTEEL Engineering 387.2 0.2 0.6% 1.1% 0.5% 22.4%

IDLC NBFI 375.7 6.2 13.6% 12.1% 47.5% 204.5%

NBL Bank 364.3 2.2 6.9% 7.8% 45.9% 71.1%

All returns are holding period return

Mcap as on last trading session of the month
1

2
33Y return of UPGDCL is unavailable as it was listed in 2015

Top Ten Gainers List (July, 2017) Top Ten Losers List (July, 2017)
DSE Code 31-Jul-17 29-Jun-17 % Change
DSE Code 31-Jul-17 29-Jun-17 % Change
BBSCABLES 90.3 10.0* 803.0%
BDWELDING 18.3 23.7 -22.8%
JUTESPINN 97.3 60.7 60.3%
BEACHHATCH 17.7 21.9 -19.2%
SAMATALETH 46.5 29.2 59.2%
REGENTTEX 26.9 31.3 -14.1%
SINOBANGLA 66.4 42.8 55.1%
UNIONCAP 22.1 25.4 -13.0%
RUPALIBANK 42.7 27.8 53.6%
CVOPRL 236.7 263.9 -10.3%
FUWANGFOOD 24.2 15.9 52.2% BDFINANCE 19.3 21.4 -9.8%
SAVAREFR 94.7 65.2 45.2% TOSRIFA 27.6 30.5 -9.5%
DULAMIACOT 12.7 9.3 36.6% GHAIL 42.1 46.0 -8.5%
RAHIMAFOOD 184.9 140.9 31.2% PRAGATILIF* 105.2 114.4 -8.0%
IMAMBUTTON 22.3 17.0 31.2% SPCERAMICS 15.4 16.7 -7.8%
*Offer price of BBSCABLES *Represents post record date adjustment

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Top Ten Closed End Funds based on 5 years (CAGR) performance
NAV Return3
"Price1 "NAV1 "Price/ "Dividend2 Redemption
DSE Code Fund
(BDT)" (BDT)" NAV" Yield (%)" 2017 YTD 2016 2014 2012-16 Year

NLI1STMF VIPB 15.3 16.76 91.3% 9.8% 17.5% 20.0% 17.7% 15.7% 2023

SEBL1STMF VIPB 14.0 15.66 89.4% 9.6% 17.2% 19.3% 16.5% 14.2% 2021

GRAMEENS2 AIMS 16.1 20.24 79.5% 6.2% 16.9% 15.1% 13.6% 12.1% 2021

RELIANCE1 AIMS 11.3 14.42 78.4% 8.8% 13.6% 17.1% 10.7% 11.8% 2027

IFILISLMF1 ICB AMCL 9.1 10.54 86.3% 11.0% 9.8% 14.0% 12.9% 11.0% 2023

1JANATAMF RACE 7.3 12.37 59.0% 0.0% 12.8% 6.5% 12.2% 9.8% 2020

ABB1STMF RACE 7.5 13.02 57.6% 0.0% 13.6% 8.9% 9.9% 9.8% 2019

FBFIF RACE 7.0 12.47 56.1% 0.0% 11.3% 9.1% 9.3% 8.8% 2019

POPULAR1MF RACE 7.0 12.47 56.1% 0.0% 14.1% 8.2% 11.1% 8.7% 2020

PHPMF1 RACE 7.8 12.20 63.9% 0.0% 14.9% 7.4% 10.9% 8.0% 2017

Price as on June 19, 2017; NAV as latest published

1

2
On latest cash dividend declared
3
CAGR computed for respected periods, except for 2017, 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.

Fund Managers Performance

"Fund Managers'
NAV Return
Dividend Ranking by Return6"
Fund Manager AUM (BDT mn) P/NAV
Yield (%)
2017 YTD 2016 2014-16 2012-16 2016 2014-16 2012-16

RACE 31,497 58.4% 0.0% 12.9% 8.5% 9.9% 8.1% 5 4

LR Global 10,184 72.7% 6.6% 10.3% 4.2% 5.6% 5.3% 6 5

ICB AMCL 7,685 88.8% 7.9% 16.2% 13.8% 10.1% 5.6% 4 3

AIMS 4,493 79.3% 6.5% 16.2% 15.5% 12.7% 11.7% 2 2

VAML 3,239 79.5% 3.0% 12.9% - - - - -

VIPB 2,406 90.1% 9.7% 17.3% 19.5% 16.9% 14.7% 1 1

SEML 1,601 93.1% 0.8% 6.0% - - - - -

ATCP AMCL 893 85.1% 10.6% 16.3% 14.4% - - 3 -

CAPM 524 92.7% 0.0% 4.2% - - - - -

AMC Indus-try 62,522 69.8% 3.7% 13.1% 9.6% 9.7% - - -

1Position of the respective fund manager in the ranking of 6 managers by return in respective horizon

Upcoming Record Dates

Company name Record Date SD/RIU CD Rights

Meghna Life Insurance Company Lim-ited 02.08.17 5.0% 20.0%

National Life Insurance Co. Limited 08.08.17 15.0% 20.0%

Linde Bangladeash Limited 13.08.17 200.0%

Sandhani Life Insurance Company Lim-ited 20.08.17 20.0%

Southeast Bank 1st Mutual Fund 22.08.17 13.5%

NLI 1st Mutual Fund 22.08.17 15.0%

Asian Tiger Sandhani Life Growth Fund 24.08.17 15.5%

Rupali Life Insurance Company Ltd. 24.08.17 10.0%

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BRANCH ADDRESS BRANCH ADDRESS

CORPORATE HEAD OFFICE

IDLC ASSET MANAGEMENT LTD.
D.R Tower, (4th Floor) 65/2/2 D.R Tower, (4th Floor) 65/2/2 South Avenue Tower (5th Floor), Unit No.
Bir Protik Gazi Golam Dostogir Bir Protik Gazi Golam Dostogir 502, House # 50, Road # 03, 7 Gulshan
Road, Purana Paltan, Dhaka-1000 Road, Purana Paltan, Dhaka-1000 Avenue, Dhaka 1212

DILKUSHA BRANCH
D.R Tower, (5th Floor) 65/2/2 Bays Galleria (4th Floor) (3rd Floor)
Bir Protik Gazi Golam Dostogir 57 Gulshan Avenue
Road, Purana Paltan Gulshan 1, Dhaka 1212
Dhaka-1000
Tel: +880 (2) 9560111

Tel: +88 02 7343766-7 Tel: +88 (2) 734 8213-6

Tel: +88 02 7763805-6

World Trade Center (5th Floor)

102-103 Agrabad Commercial
Area, Chittagong 4100
Tel: +88 02 9817647-9 Tel: +880 (31) 711034

Tel: +88 09609994352

MYMENSINGH BRANCH HABIGANJ BRANCH KUSHTIA BRANCH RANGPUR BRANCH

Swapnaneer Tower (1st Floor), Shankar City (1st Floor), Momotaj Tower (2nd Floor), Paper palace tower
27 C.K Ghosh Road, Ram Krishna Mission Road, 5/1, Jaliram Agarwal Lane House no # 306, Road # 01
Mymensingh 2200 Ghatia Bazar, Habiganj 3300 Rokshi Goli, N.S. Road Pairachattor Central Road
Kushtia Rangpur.

WOMEN
HOME LOAN AUTO LOAN CORPORATE LOAN SME LOAN ENTREPRENEUR LOAN

IDLC Helpline# 16409

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