Headlines
Equities rally on real volume; a gas-supply failure exposes the energy flank.
Food's Share of Spending Rises as Income Falls
An IMF chart, built on USDA data, plots food spending as a share of GDP against food's share of total consumer spending. Poorer economies sit further up and further right on both scales.
- ▸Advanced economies hold the bottom-left corner. Food takes roughly 5 to 22 percent of consumer spending in that group, on food outlays worth under about 13 percent of GDP.
- ▸Emerging markets spread across the whole middle of the chart. Their markers run from about 11 percent of consumer spending to above 40 percent, and the group overlaps the advanced cluster at one end and the low-income band at the other.
- ▸Low-income developing countries occupy the top-right. Every marker in that group sits above roughly 29 percent of consumer spending, and the highest of them approach 55 percent.
A household that already spends half its money on food has no cheaper category to move into, so a price rise comes out of everything else it buys. The IMF places Bangladesh in the low-income group at the upper right of this chart. Food and beverages carry the largest single weight in the Bangladesh CPI basket, which is the same fact seen from the other side.
Food inflation belongs in the credit process, not only in the macro commentary. A price move reaches disposable income before it reaches any borrower's file, and the thinnest-buffer books — retail, microfinance-linked exposure, small-ticket SME — feel it first. A risk team reading food prices only off the monthly CPI print is working from the slowest signal available.
Policy & Rates (Bangladesh Bank)
The 7-day holds 9.92%; the whole short curve sits below 10%.
FX Reserves
WATCH
- ◆Whether the flat 9.75–9.92% short curve holds into month-end or the 14-day term bid returns as it did in mid-July
- ◆Cash hoarding, reported up 34% — currency outside banks is the drain the corridor cannot price
- ◆The next FY27 bill auction, after the 182d cleared 9.79% — whether it pulls call-money bids back up
RISK
- ▼A repeat of the mid-July squeeze, when the 14-day traded through the 11.50% SLF ceiling for a week
- ▼Deposit flight re-tightening the system after the reported 34% jump in hoarded cash
- ▼A reserve buffer dated 1 May quoted against a barrel back at $91.60 — the cover number is older than the shock
Banking
Jamuna posts +22% H1 while the sector still carries a 1.56% CAR.
WATCH
- ◆Whether the Tk9,367cr provision gap lands in the Q2 2026 statements BSEC has put on a quarterly clock
- ◆Whether more strong-name H1 results follow Jamuna's +22% or the beat is idiosyncratic
- ◆Any Q2 2026 CAR disclosure that supersedes the Sep 2025 read of 1.56%
RISK
- ▼Tk9,367cr of unbooked provisions landing as a capital charge on a sector 844bp below the floor
- ▼Private credit growth at 6.03%, a 60-period low, capping the earnings that would rebuild capital
- ▼Deposit flight — the reported 34% rise in hoarded cash — shrinking the low-cost funding base
The banking print has not moved — 32.26% NPLs on Q1, a 1.56% CAR dated September, 844bp below the floor — so the news is in the dispersion, not the average. Jamuna Bank's H1 profit up 22% to Tk378cr is the reminder that 'the sector' is a fiction: a cohort of private lenders earns through the cycle while the state-bank tail carries the Tk9,367cr provision gap and the bulk of the NPL stock. That gap is a loss already incurred and not yet booked; against a CAR this thin there is no cushion to absorb it, so the charge lands on equity when Q2 disclosure forces it. Private credit growth at 6.03% — a 60-period low — starves the one mechanism that rebuilds capital internally: retained earnings on a growing book. Own the compounders, avoid the tail, and treat any index-level 'bank' exposure as a barbell, not an average.
FX & External
USD/BDT holds 122.85 as Brent rebounds to $91.60, a new run-high.
External Flow Balance
Trade gap holds $1.77bn — exports $4.03bn against $2.82bn of remittance, leaving $1.05bn of monthly cover as oil rebounds to $91.60.
Import cover 5.86mo on the Mar read — lowest since Feb 2026 (5.3 then) — with the barrel back at $91.60.
Treasury: with Brent back to $91.60, hedge energy lines now — the give-back was a one-session pause, not a trend.
WATCH
- ◆Whether Brent's rebound to $91.60 holds above the prior $90.96 peak or fades again
- ◆The next trade print — how much of the $1.05bn cushion the fuel bill takes at $91.60
- ◆The FSRU gas outage — whether it forces spot LNG imports onto the same external account
RISK
- ▼Import cover 5.86mo on the Mar read — lowest since Feb 2026 (5.3 then) — with the barrel back above $91
- ▼Exports flat at $4.03bn and remittance flat for a thirteenth print — neither side of the cushion is growing
- ▼Reserves held at $34.55bn by borrowing, on a print dated 1 May against a shock priced today
DSE Markets
Volume confirms the bounce; the overhang is still bank scrip.
DSEX Index
DSEX closed 5,898.96, up 0.71% (+41pt), on turnover of Tk1,129cr against Tk967cr — breadth 294 advancing to 58 declining.
Ten prints since the 9 Jul reopen at 5,804: a 5,926 high on 20 Jul, then back to 5,899 today.
Equity desk: turnover back above the Tk1,070cr line the bounce needed — treat 5,804 as a floor now, watch the 5,926 high.
WATCH
- ◆Whether turnover holds above the Tk1,070cr line it just reclaimed or fades as it did into 22 Jul
- ◆The 5,926.28 high from 20 Jul — 27pt away — as the next test of the move
- ◆Bank scrip against the Tk9,367cr provision gap now on a quarterly disclosure clock
RISK
- ▼The insurance margin row that dragged the late session spreading to the broader tape
- ▼A bank-heavy float re-rating down as Q2 2026 statements date the Tk9,367cr provision gap
- ▼Private credit growth at 6.03%, a 60-period low, capping earnings for the lenders that dominate the index
Last week's read set a condition: no floor at 5,804 until turnover cleared Tk1,070cr. Today it did — Tk1,129cr against Tk967cr, with 294 stocks up to 58 down. The bounce finally has money behind it, not just an absence of sellers, and on breadth that wide the move is not one or two counters. That is the constructive half. The other half is what carries the index: bank scrip dominates the float, and that float sits on a Tk9,367cr provision gap and a 32.26% NPL ratio, with private credit growth at 6.03% — a 60-period low — capping the earnings that would justify a re-rating. The late-session fade on an insurance margin row is a reminder the bid is not unconditional. Trade the broad tape while breadth and volume hold; stay underweight the lenders; treat the 5,926 high as the level that confirms this is more than a bounce.
T-Bonds & T-Bills
182d holds 9.79% above the 364d; the 10y cheapens to 10.34%.
BD Govt Yield Ladder
182d held 9.79%, 91d 9.30%; the 10y cheapened 10bp to 10.34% while the 5y richened to 9.68%, steepening 5s10s to 66bp.
The 182d cleared 9.40% at seven straight auctions before this 9.79%; the 364d has held 9.57% for nine prints.
ALCO: six-month still yields above twelve-month — fund short, and the 10y cheapening is the first cue to start adding duration.
WATCH
- ◆Whether the next FY27 auction defends 9.79% at six months or the inversion unwinds
- ◆The 10y at 10.34% — whether the cheapening extends as duration supply lands
- ◆5s10s at 66bp — a steepening that reprices any long-dated fixed-rate book
RISK
- ▼Duration marks if the 10y cheapening from 10.24% to 10.34% runs further
- ▼Negative carry on the front book — 182d at 9.79% against a 364d asset at 9.57%
- ▼FY27 gross supply repeating the six-month clear at each subsequent auction
Macro & Inflation
On the Mar prints CPI held 8.6%; credit stuck at 6.03%.
CPI Trend
CPI 12m-avg held 8.6% on the Mar print — food 8.24%, non-food 9.09% — disinflation has flattened rather than resumed.
The 12m-avg is lowest since Mar 2023 (8.4% then), with food lowest since Dec 2025 (7.7% then).
MPC: with the real policy rate at 1.29% and credit at 6.03%, the next MPS holds — a cost shock, no demand.
WATCH
- ◆The next CPI print — the first to carry Brent back above $91 into a non-food line already at 9.09%
- ◆Private credit at 6.03% — whether the next print breaks the 60-period low or confirms it
- ◆Import cover 5.86mo on the Mar read against a fuel bill priced $11.60 above the FY27 line
RISK
- ▼Cash hoarding, reported up 34%, draining the deposit base M2 growth of 10.52% is meant to represent
- ▼Real policy rate at 1.29% — lowest since Feb 2026 (0.9% then) — leaving little room before it turns negative
- ▼REER at 102.78 keeping the taka dear in real terms while exports hold flat at $4.03bn
Remittance
Remittance holds $2.82bn for a thirteenth print; cover stays $1.05bn.
Remittance Inflow
WATCH
- ◆The next monthly print — whether $2.82bn is a floor or the top of a slide
- ◆How much of the $1.05bn cushion the next trade print gives up to fuel at $91.60
- ◆Cash hoarding, reported up 34% — confidence in the formal channel is what routes this line through banks
RISK
- ▼Thirteen flat prints — the line is not growing while the bill it funds is
- ▼A single fuel-heavy month turning the $1.05bn cover negative as Brent rebounds
- ▼Gulf channel capacity re-routing informal, outside BB's count
Commodities
Gold jumps $80 to $4,084.70 as crude rebounds; LNG stale at $15.
WATCH
- ◆Whether gold holds above $4,080 or fades on a genuine de-escalation
- ◆LNG spot against the 20 Apr $15/MMBtu print — three months stale into peak demand and a gas outage
- ◆Food and energy import lines bidding for the same $1.05bn cushion as crude rebounds
RISK
- ▼An LNG print landing well above $15/MMBtu into the same import month as $91.60 Brent and a nationwide gas outage
- ▼Food and energy import lines bidding for the same $1.05bn monthly cushion
- ▼Pass-through into a non-food CPI line at 9.09% on the Mar print
Fiscal
NBR stuck at Tk3.61tn while Ecnec clears Tk14,041cr more to fund.
NBR Tax Revenue
Monthly NBR collection has printed flat across the whole window, holding the YTD line at Tk3.61tn with no new receipt landing.
Fourteen prints in the window, all at Tk3.61tn — the last new monthly figure predates the window entirely.
Treasury: with the 10y cheapening to 10.34% and Ecnec adding Tk14,041cr, FY27 funding cost is rising against a frozen revenue line.
WATCH
- ◆The next monthly NBR print — the Tk3.61tn line has not moved across the window
- ◆Whether the Tk14,041cr of new Ecnec approvals lands on the FY27 domestic borrowing programme
- ◆The 10y at 10.34%, up 10bp — the marginal cost of long funding is stepping up
RISK
- ▼Revenue frozen at Tk3.61tn while FY27 spending commitments step up
- ▼A steepening curve — 10y to 10.34% — raising the cost of the domestic borrowing programme
- ▼Post-LDC targets underwritten by investment that is not arriving
Iran War & Oil
Brent rebounds $2.49 to $91.60 — a new run-high, $11.60 above the FY27 line.
Brent Crude
Brent rebounded $2.49 to $91.60 and WTI $2.09 to $84.72 — the give-back reversed in a session, spread now $6.88.
Brent now prints a new run-high above the $90.96 peak, one session after the $89.11 give-back.
Treasury: hedge energy lines here — the import bill prices $11.60 above the $80 budget and the pause is over.
WATCH
- ◆Whether $91.60 holds above the prior $90.96 peak or the premium fades again
- ◆Energy-import LC volumes at the six-month funding point, still 9.79%
- ◆The FY27 subsidy provision against a spot price now $11.60 above its $80 assumption
RISK
- ▼The premium rebuilding onto the same $1.05bn monthly cushion
- ▼The FSRU gas outage forcing costlier spot LNG onto the import bill alongside crude
- ▼Pass-through into a non-food CPI line at 9.09% on the Mar print
Yesterday's $1.85 give-back read as a premium decaying; today undoes it. Brent rebounded $2.49 to $91.60 — a new high for the run, above the $90.96 peak — with WTI up $2.09 to $84.72. The barrel now sits $11.60 above the $80 line FY27's subsidy and import math was written against, and the one softer print that looked like an opening to relax cover instead marked the low. The domestic side compounds it: an FSRU fault has taken gas offline nationwide, and the fix — the pledge of a third unit within a month — routes through costlier spot LNG on the same import account, still marked at a stale $15/MMBtu. Two energy lines now bid for the $1.05bn monthly cushion at once. The desk treats the give-back as the hedging window it was, not the trend it wasn't — buy energy cover here, and price the subsidy line off $91.60, not $80.
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