Home ›› 12 Feb 2023 ›› Front
Country’s many large savers are now eager to invest in the jewellery sector, particularly purchase of diamond and gold ornaments due mainly to negative returns from bank deposits considering inflation and a lack of trust in banks.
Besides, they show more interest in making investment in the jewellery industry for a fall in sales of national savings tools due to strict implementation of regulations and a limited number of savings instruments in the country.
Buyers and sellers revealed the information at the three-day Jewellery Expo-2023 which ended at International Convention City Bashundhara (ICCB) in Dhaka on Saturday.
Sellers said the fair was gaining momentum as many savers were making investment here and purchasing their jewellery items of their own choice.
Besides, many buyers said due to a lack of confidence in banks for irregularities and loan scams, they are inclined to invest in the jewellery sector. It is safe and good returnable area, considering inflation.
Talking to The Business Post, Amina Begum, a resident of Dhanmondi, said she came to the fair to purchase some ornaments as investment.
“Earlier, I used to deposit money with banks but now I am scared to deposit money with financial institutions. It seems that like me, many do not want to take the risk of keeping money into banks now,” she added.
Amina also said that irregularities in the country’s bank sector encourage them to purchase ornaments instead of deposits.
Abul Hossain who lives in the capital’s Gulshan area said he purchased a diamond ring at Tk45,500 and a bangle at Tk1 lakh from the jewellery fair.
“We got some discounts, including 60 per cent making charge, at the expo. I try to withdraw all my deposits from banks and invest in jewellery,” he added.
Talking to The Business Post, Marketing Manager of Amin Jewellers Shamsuzzaman said they were offering 60 per cent discount on making charge at the fair.
“Many people were purchasing different types of ornaments from our stalls. We were receiving a good number of visitors at weekends. We can’t say how many savers came here, but it is sure that a good number of people visited the fair with an aim to make investment,” he added.
Sales executive of Diamond Bazar Mohammad Ariful Islam said the price of diamond increased by 15-20 per cent this year compared to last year.
Many people were buying different types of diamond ornaments, he said, adding, “Perhaps, they feel insecure about deposit of their money in financial institutions. So, they are investing here.”
Bangladesh Jewellers Association (Bajus) President Sayem Sobhan Anvir said the sector has a big economic potential. Large savers and investors should invest more in the sector considering returns compared to other savings tools.
“If one invests money in the jewellery sector, there is no possibility of loss. For example, the price of gold rose to Tk90,000 from Tk6,000 per bhori 20 years back due to the growing demand. So, all should buy gold and stock to take profit in future,” he also said.
Economic analyst and research director of CPD Khondaker Golam Moazzem told The Business Post that there are many financial instruments for investment in other countries. “But we have a very little scope. Investing in existing tools like the capital market is risky.”
“Large savers are interested in investing in gold due to a lack of confidence in the capital market, investment cap on NSCs, non-functional bond market and negative returns from banks. The advantage of the investment is that gold’s high asset value and low impact of inflation,” he added.
He also opined that in the future, if this sector grows more, export will grow and new companies will come forward. Many companies may come to the capital market or commodity exchange market. This will lower money laundering and boost investment in gold.
According to BAJUS, in 2020, gold ornaments worth $237.9 million were sold in Bangladesh and gold bars at Tk42.82 crore.
The data about the gold demand in the country is not available. As per the proposal of Gold Policy 2018 (Revised 2021), the country has an annual gold demand of 20-40 tonnes.
Deposits and sales of NSCs decline
Bank deposit interest rates are stuck at 6 per cent against inflation of around 9 per cent. As a result, savers are getting negative returns by depositing money in banks. In such a situation, the depositors have reduced deposits in the banks.
According to the central bank data, bank deposits increased by Tk 15,817 crore during the July-November period of the current fiscal year which was Tk 42,858 crore during the same period of FY22.
At the end of November last year, the total amount of deposits in the banking system stood at Tk 14.87 lakh crore.
The government has taken various measures to discourage the purchase of national savings certificates due to an increase in interest costs.
As a result, net sales of NSCs during the July-December period of FY23 was negative Tk3,106 crore which was positive Tk9,589 crore in the same period last year.
