Citi gains Bangladesh merchant licence
Friday, 21 September 2007
Amy Yee
FT Syndication Service
NEW DELHI: Citigroup has become the first foreign bank to receive a merchant banking licence in Bangladesh, reflecting keen interest in offering advisory services to a promising economy led by high-growth industries such as garment manufacturing.
The licence allows Citigroup Global Markets Bangladesh, a local arm of one of the world's largest financial services groups, to serve as an adviser, underwriter and lead manager in the country's capital markets.
Bangladesh's stock market has grown 60 per cent in the year to date, said Citigroup, in spite of political instability and devastating summer floods.
Mamun Rashid, Citigroup country officer, said: "Bangladesh is increasingly on the radar of the international investment community."
Citigroup will provide "mergers and acquisition advisory, debt and equity services to support Bangladesh and its companies' future growth", he said.
Bangladesh's gross domestic product grew 6.5 per cent in fiscal year 2007 on the back of burgeoning manufacturing, services and a steady flow of remittances from overseas, according to a June report from the Asian Development Bank. The country "holds strong potential for higher GDP growth of 7 to 8 per cent over the medium term", it said.
Garment exports swelled 28 per cent during the first half of fiscal year 2007 but slowed due to labour unrest and political turmoil late last year, said ADB. Bangladesh has become a global garment manufacturing hub because of low-cost labour drawn from its large population of 150m.
The garment industry aims to double exports to $16bn in three years. But reaching targets is hampered by infrastructure and productivity constraints and intense competition from China and Vietnam.
In the first nine months of fiscal year 2007, output of medium and large-scale manufacturing expanded by 11.2 per cent compared with the same period the previous year.
Citigroup opened an office in Bangladesh in 1987 but its operations have been mostly limited to corporate banking services. It opened its first full-service branch in Dhaka, the capital, in 1995 and has a second branch in Chittagong.
Faruq Ahmad Siddiqi, chairman of the Securities and Exchange Commission in Bangladesh, presented the licence to Citigroup in Dhaka last Sunday.
However, political instability remains a concern for investors. Bangladesh has been under a state of emergency since the government cancelled elections scheduled for January after violent political clashes.
FT Syndication Service
NEW DELHI: Citigroup has become the first foreign bank to receive a merchant banking licence in Bangladesh, reflecting keen interest in offering advisory services to a promising economy led by high-growth industries such as garment manufacturing.
The licence allows Citigroup Global Markets Bangladesh, a local arm of one of the world's largest financial services groups, to serve as an adviser, underwriter and lead manager in the country's capital markets.
Bangladesh's stock market has grown 60 per cent in the year to date, said Citigroup, in spite of political instability and devastating summer floods.
Mamun Rashid, Citigroup country officer, said: "Bangladesh is increasingly on the radar of the international investment community."
Citigroup will provide "mergers and acquisition advisory, debt and equity services to support Bangladesh and its companies' future growth", he said.
Bangladesh's gross domestic product grew 6.5 per cent in fiscal year 2007 on the back of burgeoning manufacturing, services and a steady flow of remittances from overseas, according to a June report from the Asian Development Bank. The country "holds strong potential for higher GDP growth of 7 to 8 per cent over the medium term", it said.
Garment exports swelled 28 per cent during the first half of fiscal year 2007 but slowed due to labour unrest and political turmoil late last year, said ADB. Bangladesh has become a global garment manufacturing hub because of low-cost labour drawn from its large population of 150m.
The garment industry aims to double exports to $16bn in three years. But reaching targets is hampered by infrastructure and productivity constraints and intense competition from China and Vietnam.
In the first nine months of fiscal year 2007, output of medium and large-scale manufacturing expanded by 11.2 per cent compared with the same period the previous year.
Citigroup opened an office in Bangladesh in 1987 but its operations have been mostly limited to corporate banking services. It opened its first full-service branch in Dhaka, the capital, in 1995 and has a second branch in Chittagong.
Faruq Ahmad Siddiqi, chairman of the Securities and Exchange Commission in Bangladesh, presented the licence to Citigroup in Dhaka last Sunday.
However, political instability remains a concern for investors. Bangladesh has been under a state of emergency since the government cancelled elections scheduled for January after violent political clashes.