Kazi Zahidul Hasan :
Investment in the National Savings certificates and bonds plunged by 29.75 per cent in December, considered the biggest monthly drop since beginning of the fiscal year 2016-17, as investors rushed for encashment of their premature saving instruments to bear the additional burden of year ending family expenditure.
Many retail investors also withdrew their saving instruments to put their money into alternative investment destinations leading to the fall in overall investment in national savings schemes, sources said.
The net investment in the savings instruments came down to Tk 3,100 crore in December from Tk 4,402 crore in November last year, showing a Tk 1,302 crore month-on-month fall, according to the Directorate of National Savings (DNS).
The DNS figure showed that investors invested
Tk 4,932 crore in government’s National Savings Schemes in July, Tk 6,327 crore in August, Tk 5,390 crore in September, Tk 4,310 in October, Tk 4,402 in November and Tk 3,100 in December. Earlier, the government has set Tk 19,610 crore as the net borrowing target from National Savings Schemes during the fiscal year 2016-17 for financing part of its budget deficit.
The target was surpassed in July to November period of the current fiscal as people invested heavily in the instruments after fixed deposit rates at banks came down significantly in the wake of piling up excess liquidity in the banking systems.
The DNS data showed that the net investment in the savings instruments in July-December of the FY 2016-17 stood at Tk 23,100 crore as against the annual target of 19,610 crore.
Savings instruments worth Tk 11,326 crore were sold between July and November of the FY 2015-16, the DNS data showed. “People were more interested to invest in the government’s savings instruments and bonds due to lack of alternative investment destinations leading to surpass the annual target,” a DNS director told The New Nation on Friday, requesting not to be named.
He said, “A drastic fall in fixed deposit rates in banks mainly drove out the investors to put their money in the national savings schemes.”
But the overall investment in the national saving schemes in December plunged sharply as result of massive encashment of premature savings certificates and bonds by the investors for various purposes, including bearing of family expenses, he said. “An upward trend in inflation also put an adverse impact on the investment of savings instruments in December last year,” he said. When asked, the DNS official said,” We have information that a big number of retail investors went for encashment of their savings instruments to opt for speculative investment purpose (share business) with the greed to maximize profit.”He further said the recent bullish trend in share markets may force the investors to put their money in share business after withdrawing themselves from the government’s saving schemes. “We are trying to determine the amount shifted from DNS to the capital market,” he added.
There are four national savings instruments and four bonds in the markets which are being sold through Bangladesh Bank, scheduled banks and Post Office Directorate.
They are Bangladesh savings certificates, three-month long profit based savings instrument, pension saving certificates and family savings certificates, and Bangladesh Prize Bond, Wage-Earner Development Bond, US Dollar Premium Bond and US Dollar Investment Bond.
In May 2015, the government slashed the deposit rate of its savings instruments by points to reduce its borrowing as well as propping up banks’ deposit collection.
The rate on the various types of savings instruments went down to 11-12 per cent from 12-14 per cent earlier.
However, the average rates on bank deposits came down to 5.33 per cent in October last from 6.21 per cent in January 2016, according to the Central Bank latest statistics.
Investment in the National Savings certificates and bonds plunged by 29.75 per cent in December, considered the biggest monthly drop since beginning of the fiscal year 2016-17, as investors rushed for encashment of their premature saving instruments to bear the additional burden of year ending family expenditure.
Many retail investors also withdrew their saving instruments to put their money into alternative investment destinations leading to the fall in overall investment in national savings schemes, sources said.
The net investment in the savings instruments came down to Tk 3,100 crore in December from Tk 4,402 crore in November last year, showing a Tk 1,302 crore month-on-month fall, according to the Directorate of National Savings (DNS).
The DNS figure showed that investors invested
Tk 4,932 crore in government’s National Savings Schemes in July, Tk 6,327 crore in August, Tk 5,390 crore in September, Tk 4,310 in October, Tk 4,402 in November and Tk 3,100 in December. Earlier, the government has set Tk 19,610 crore as the net borrowing target from National Savings Schemes during the fiscal year 2016-17 for financing part of its budget deficit.
The target was surpassed in July to November period of the current fiscal as people invested heavily in the instruments after fixed deposit rates at banks came down significantly in the wake of piling up excess liquidity in the banking systems.
The DNS data showed that the net investment in the savings instruments in July-December of the FY 2016-17 stood at Tk 23,100 crore as against the annual target of 19,610 crore.
Savings instruments worth Tk 11,326 crore were sold between July and November of the FY 2015-16, the DNS data showed. “People were more interested to invest in the government’s savings instruments and bonds due to lack of alternative investment destinations leading to surpass the annual target,” a DNS director told The New Nation on Friday, requesting not to be named.
He said, “A drastic fall in fixed deposit rates in banks mainly drove out the investors to put their money in the national savings schemes.”
But the overall investment in the national saving schemes in December plunged sharply as result of massive encashment of premature savings certificates and bonds by the investors for various purposes, including bearing of family expenses, he said. “An upward trend in inflation also put an adverse impact on the investment of savings instruments in December last year,” he said. When asked, the DNS official said,” We have information that a big number of retail investors went for encashment of their savings instruments to opt for speculative investment purpose (share business) with the greed to maximize profit.”He further said the recent bullish trend in share markets may force the investors to put their money in share business after withdrawing themselves from the government’s saving schemes. “We are trying to determine the amount shifted from DNS to the capital market,” he added.
There are four national savings instruments and four bonds in the markets which are being sold through Bangladesh Bank, scheduled banks and Post Office Directorate.
They are Bangladesh savings certificates, three-month long profit based savings instrument, pension saving certificates and family savings certificates, and Bangladesh Prize Bond, Wage-Earner Development Bond, US Dollar Premium Bond and US Dollar Investment Bond.
In May 2015, the government slashed the deposit rate of its savings instruments by points to reduce its borrowing as well as propping up banks’ deposit collection.
The rate on the various types of savings instruments went down to 11-12 per cent from 12-14 per cent earlier.
However, the average rates on bank deposits came down to 5.33 per cent in October last from 6.21 per cent in January 2016, according to the Central Bank latest statistics.
