Global stocks hit skids

World stock markets fell Friday as a rash of disappointing company results triggered profit-taking ahead of the weekend, although the Dow managed to hold on for its third straight record close.

Wall Street recovered from early losses, but still felt the impact of downbeat results at the end of the week.

“It was a pretty good week, obviously ending on a sour note,” Chris Low of FTN Financial told AFP.

“We started the week with better than expected earnings form the big banks. At the end of the week, we had Amazon.”

The online retail behemoth fell 2.5 percent after the company reported a dip in profits despite a big boost in sales.

Meanwhile, the oil supermajors were split, with ExxonMobil falling 1.5 percent as second quarter profits surged but missed expectations as output fell, while Chevron rose 1.8 percent after it reported better-than-expected profit.

Investors also were digesting the better but below-expectation GDP growth of 2.6 percent in the second quarter, as well as the political uncertainty after another failed attempt at healthcare reform in the US.

“The result has thrown cold water on the hopes for a pro-growth agenda,” economist Diane Swonk said in a research note.

“In fact, policy uncertainty, which places a drag on growth, is measurably on the rise.”

The dollar took a hit from US GDP data which cast further doubt on any early interest rate increase from the Federal Reserve.

Oil got a lift from the weaker dollar, this week’s US stockpile data and lingering expectations of more production cuts, or at least more discipline in implementing the current ones.

Tobacco smoked

Tobacco stocks plunged after the US Food and Drug Administration said it will look at ways for companies to cut nicotine levels in cigarettes to make them less addictive and reduce tobacco-related diseases and deaths.

This will “blow a hole in their earnings,” said Neil Wilson, senior market analyst at ETX Capital in London.

Shares in Altria, which markets brands such as Marlboro and Chesterfield, fell nearly 10 percent in New York, while in London British American Tobacco fell more than seven percent, and Imperial Brands dropped nearly five percent.

Mike van Dulken, at Accendo Markets, however, said that the reaction may have been overdone.

“It might not sound great, but it doesn’t read like the industry is destined to go up in smoke,” he said.

The mood also soured in Europe, where shares in Renault tumbled on a weak outlook for the French carmaker despite surging sales and record profits in the first half of 2017.

In Frankfurt, BMW, Daimler and Volkswagen shares also fell. The three were this week hit with lawsuits over their alleged collusion to drive up the prices of their cars.

London’s benchmark FTSE 100 index was down one percent at the closing bell, weighed down by poor results from troubled telecoms and television firm BT Group.

“The FTSE sell-off has intensified into the close, with the blue chip benchmark hitting its lowest level in over two weeks,” noted Josh Mahoney at IG.

BT shares slid after the group posted a 42 percent slump in first-quarter profits, rocked by fresh fallout from an Italian accounting scandal.

Barclays shares fell as the bank reported a first-half net loss of œ1.21 billion ($1.58 billion, 1.35 billion euros).

Key figures around 2100 GMT

New York - Dow: UP 0.15 percent at 21,830.31 (close)

New York - Nasdaq: DOWN 0.12 percent at 6,374.68 (close)

London - FTSE 100: DOWN 1.0 percent at 7,368.37 points (close)

Frankfurt - DAX 30: DOWN 0.4 percent at 12,126.70 (close)

Paris - CAC 40: DOWN 1.1 percent at 5,113.39 (close)

EURO STOXX 50: DOWN 0.7 percent at 3,467.73

Tokyo - Nikkei 225: DOWN 0.6 percent at 19,959.84 (close)

Hong Kong - Hang Seng: DOWN 0.6 percent at 26,979.39 (close)

Shanghai - Composite: UP 0.1 percent at 3,253.24 (close)

Euro/dollar: UP at $1.1755 from $1.1677 at 2100 GMT Thursday

Pound/dollar: UP at $1.3139 from $1.3066

Dollar/yen: DOWN at 110.71 yen from 111.28 yen

Oil - Brent North Sea: UP 55 cents at $52.07 per barrel

Oil - West Texas Intermediate: UP 67 cents at $49.71

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Digital RMG factory mapping launched

a view to providing real-time and credible factory data to the industry stakeholders through an interactive online platform (like Google Maps), a project for framing digital RMG factory mapping in Bangladesh (DRFM-B) has been launched yesterday.

Commerce Minister Tofail Ahmed inaugurated the DRFM-B project as the chief guest at the Apparel Club in BGMEA headquarters in the city, said a BGMEA press release.

Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Centre for Entrepreneurship Development (CED) of BRAC University are jointly implementing the project with the cooperation of C&A Foundation.

Under the DRFM-B project, all the factories situated in 104 upazilas of 20 districts will be brought into the map by 2021.

All the information of the factories will be included in the digital map.

The project will also work to enable greater accountability, transparency in supply chains, and enhancing confidence in the ability of the sector to contribute to equitable development in Bangladesh.

BGMEA President Siddiqur Rahman, CED Adviser Professor Dr Rahim B Talukder, C&A Bangladesh Unit leader Shantanu Sinha and BRAC University Vice Chancellor Professor Syed Saad Andalib, among others, spoke on the occasion.

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Bangladesh LNG imports could surge over 17m tonnes by 2025

South Asia, long a backwater for energy markets, is emerging as a hotspot for liquefied natural gas (LNG), with Pakistan and Bangladesh set to join India as major consumers, helping to ease global oversupply that has dogged this market for years.
Only India and Pakistan currently import LNG in South Asia, taking in a combined 25 million tonnes, or 8 percent of global demand last year.
But with a fast growing population, strong economic growth and soaring energy demand, more import projects are being developed, lead by Pakistan and Bangladesh.
“Both countries already have extensive gas infrastructure due to legacy production from domestic gas fields,” said Chong Zhi Xin, principal Asia LNG analyst at energy consultancy Wood Mackenzie. “As domestic production has failed to keep up with demand, both markets are a natural fit for LNG imports.”
Pakistan only started importing its first LNG in 2015, and surprised some in the industry by developing its first terminal within schedule and budget. A second is about to become operational and a third is expected to be completed next year.
With Bangladesh set to join the club of importers next year, the region could import 80-100 million tonnes a year by the mid 2020s, analysts said, making it the world’s second biggest import region, ahead of Europe.
BANGLADESH BOOM
Bangladesh, a country of over 160 million people, could import as much as 2,500 million cubic feet per day (mmcfd) of LNG, equivalent to around 17.5 million tonnes per year, by 2025, said Nasrul Hamid, Bangladesh’s state minister for energy and power.
With its own gas reserves depleting and seeking to almost double power capacity to 24,000 megawatt (MW) by 2021, Bangladesh is tapping cheap and plentiful supplies on world markets and investing heavily in LNG.
Several floating storage and regasification units (FSRU), the first developed by private U.S. company Excelerate Energy, are due to begin importing cargoes starting in 2018.
“We are working on two FSRU’s from which gas will start flowing (by) next July,” Hamid told Reuters.
Both FSRUs will be deployed off Moheshkhali Island in the Bay of Bengal, in the southeast of the country. They will have a combined capacity of 7.5 million tonnes a year.
Two more FSRUs are planned, though no exact dates have been finalised. In addition, state-run Petrobangla signed a preliminary deal with India’s Petronet in December to set up an onshore terminal to regasify a further 7.5 million tonnes a year of LNG on Kutubdia Island, just to the north of Moheshkhali, at a cost of $950 million.
“By 2025, depending on our national demand, we will import anywhere from 2,000 to 2,500 mmcfd gas,” Hamid said.
Those imports would add to plans from India and Pakistan to buy 50 million and 30 million tonnes of LNG per year, respectively, by the mid-2020s.
“LNG imports in South Asia are expected to rise four-fold from 22 million tonnes per year in 2016 to over 80 million tonnes per year by 2030,” said Mangesh Patankar, head of Asia/Pacific business development at energy consultancy Galway Group.
Should all plans in the region go ahead and Sri Lanka also start imports, this figure could rise to 100 million tonnes, industry project data shows.
That would push South Asia’s demand ahead of Europe as the world’s second biggest LNG import region by 2020, though it would still lag North Asia’s 150 million tonnes of annual imports.
The boom in demand will help ease oversupply in LNG markets, which have resulted in a more than 70 percent price fall from their 2014 peaks to $5.75 per million British thermal units. <LNG-AS>
SUPPLY TALKS
Hamid said Bangladesh was in talks with Qatar’s RasGas and Indonesia’s Pertamina for long-term deals, while it also planned to import significant amounts of its future demand via the freely traded spot market.
“We are looking for a mixture of both long-term contracts and the spot market,” Hamid said.
Rupantarita Prakritik Gas, part of Petrobangla, in June posted a notice looking for LNG suppliers for spot cargoes from 2018.
Not everyone believes Bangladesh and Pakistan will achieve their LNG ambitions.
“It is likely to be an overly ambitious target... China took more than 10 years to reach 20 million tonnes of LNG imports. In India, it took 13 years to reach the same amount,” said Chong Zhi Xin.
Low domestic gas prices also required LNG imports to be subsidised in Bangladesh and Pakistan, he said.
“As LNG imports increase, so does the subsidy bill. Without pricing reforms, it would be a challenge for Pakistan and Bangladesh to fulfil their LNG import ambitions.”
Hamid, however, is confident. In order to meet surging demand, he said LNG was part of an even bigger plan.
“The solutions are FSRU, land-based LNG, deep sea exploration in the Bay of Bengal, and transnational (gas) grids ,” he said.

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July forex reserves slip from record high

Bangladesh’s foreign exchange reserves dropped to $32.91 billion at the end of July from a record high of $33.49 billion the previous month, but were up 9.5 percent from a year earlier, the central bank said on Tuesday.

The monthly drop was fuelled by a rise in imports, a senior central bank official said, adding that the reserves were sufficient to cover about 10 months’ worth of imports.

Garment exports and remittances from Bangladeshis working overseas, the key drivers of the country’s more than $200 billion economy, have helped foreign exchange reserves grow steadily in recent years

Bangladesh’s foreign exchange reserves dropped to $32.91 billion at the end of July from a record high of $33.49 billion the previous month, but were up 9.5 percent from a year earlier, the central bank said on Tuesday.

The monthly drop was fuelled by a rise in imports, a senior central bank official said, adding that the reserves were sufficient to cover about 10 months’ worth of imports.

Garment exports and remittances from Bangladeshis working overseas, the key drivers of the country’s more than $200 billion economy, have helped foreign exchange reserves grow steadily in recent years

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BB chief warns bankers against loan default culture

Bangladesh Bank governor Fazle Kabir has warned the bankers against the bad impact of the ‘corporate default culture’ in the banking sector.

“Bankers have to be very cautious about the corporate default culture in the banking sector,” he said while unveiling the central bank’s “Financial Stability Report 2016” at a function at Bangladesh Bank.

The Financial Stability Report reveals that about 10 per cent of the total bank loans were rescheduled in 2016.

Of the default loans, commercial credit tops the list where it shares 23 per cent and it was followed by garment sector’s credit representing 12 per cent. The large credits share 10 per cent of the total default loans.

As per the report, some Tk 100,217 crore was disbursed as commercial credit in 2015, of which Tk 8,500 crore became default while Tk 28,021 crore was distributed as agriculture credit, of which Tk 4,006 crore became default.

The garment sector received Tk 73,753 crore as credit with Tk 6,103 crore being defaulted.

Fazle Kabir said banking sector has to come out of the default loan culture for the sake of maintaining stability in the financial sector.

He directed the bankers to prefer the small and medium entrepreneurs (SME) to provide loans and reduce the ratio of large loan in the total credit disbursement.

With BB deputy governor SK Sur Chowdhury in the chair, the function was also addressed by deputy governors Abu Hena Razee Hasan and Moniruzzaman and chairman of Association of Bankers, Bangladesh (ABB) Anis A Khan.

Top officials of different public and private banks were also present here.

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