Monday, July 28, 2014


Friday, July 25, 2014

Stocks rebound on healthy corporate disclosures DSE goes into nine-day holiday

New Age - 25 July'2014 Friday


Dhaka stocks rebounded on Thursday, last trading session before a nine-day market closure, with an increased turnover as improved financial statements of listed companies, mostly banks, made investors optimistic.
Trading at the bourse will remain closed from July 25 to August 2 for Eid-ul-Fitr and weekly holidays.
The key index of Dhaka Stock Exchange, DSEX, closed at 4,427.15 points, adding 0.87 per cent or 38.46 points.
Of the 299 shares and mutual funds traded on the day, 199 advanced, 74 declined and 26 remained unchanged.
Prices of two-third of the traded shares increased on the day as improved earning disclosures by the listed companies prompted investors to increase participation on the trading floor, market operators said.
They said an expectation of a capital market-friendly monetary policy statement by the central bank was another reason for the investors’ optimism.
A Bangladesh Bank senior official recently told reporters that the monetary policy for the next six-months would be capital market-friendly.
DS30, the blue-chip index of the bourse, increased by 1.52 per cent, or 24.47 points, to finish at 1,626.51 points on Thursday.
The Shariah index of the bourse, DSES, closed at 1,004.66 points, increasing by 1.15 per cent or 11.42 points.
The turnover of the DSE increased to Tk 339.53 crore from Tk 318.86 crore in the previous trading session.
‘Closing session ahead of Eid-ul-Fitr stepped up with investors’ focus on large capitalised scrips,’ IDLC Investments said in its daily market commentary.
Coupled with improved half-yearly earning disclosures, MPS expectations and favourable prices at scrip-level acted as the core catalysts for Thursday’s upturn, it said.
Scrip-wise movements were significant as several companies declared earnings on Thursday, said IDLC.
‘Besides, investors’ participation increased slightly, holding total turnover up above Tk 300-crore level for the third consecutive session,’ it said.
Grameenphone led the turnover leaders with its shares worth Tk 59.55 crore changing hands on the day. The share price of the company gained Tk 9.80 or 3.29 per cent.
Beximco, Lafarge Surma Cement, Shahjibazar Power Company, Padma Oil, Far Chemical Industries, Olympic Industries, Square Pharmaceuticals, Meghna Petroleum and ACI Limited were among the other turnover leaders.
Shahjibazar Power Company gained the most with a 9.93-per cent increase in its share price, while Savar Refractories lost the most, shedding 9.16 per cent.

 

Dhaka stocks rebounded on Thursday, last trading session before a nine-day market closure, with an increased turnover as improved financial statements of listed companies, mostly banks, made investors optimistic.
Trading at the bourse will remain closed from July 25 to August 2 for Eid-ul-Fitr and weekly holidays.
The key index of Dhaka Stock Exchange, DSEX, closed at 4,427.15 points, adding 0.87 per cent or 38.46 points.
Of the 299 shares and mutual funds traded on the day, 199 advanced, 74 declined and 26 remained unchanged.
Prices of two-third of the traded shares increased on the day as improved earning disclosures by the listed companies prompted investors to increase participation on the trading floor, market operators said.
They said an expectation of a capital market-friendly monetary policy statement by the central bank was another reason for the investors’ optimism.
A Bangladesh Bank senior official recently told reporters that the monetary policy for the next six-months would be capital market-friendly.
DS30, the blue-chip index of the bourse, increased by 1.52 per cent, or 24.47 points, to finish at 1,626.51 points on Thursday.
The Shariah index of the bourse, DSES, closed at 1,004.66 points, increasing by 1.15 per cent or 11.42 points.
The turnover of the DSE increased to Tk 339.53 crore from Tk 318.86 crore in the previous trading session.
‘Closing session ahead of Eid-ul-Fitr stepped up with investors’ focus on large capitalised scrips,’ IDLC Investments said in its daily market commentary.
Coupled with improved half-yearly earning disclosures, MPS expectations and favourable prices at scrip-level acted as the core catalysts for Thursday’s upturn, it said.
Scrip-wise movements were significant as several companies declared earnings on Thursday, said IDLC.
‘Besides, investors’ participation increased slightly, holding total turnover up above Tk 300-crore level for the third consecutive session,’ it said.
Grameenphone led the turnover leaders with its shares worth Tk 59.55 crore changing hands on the day. The share price of the company gained Tk 9.80 or 3.29 per cent.
Beximco, Lafarge Surma Cement, Shahjibazar Power Company, Padma Oil, Far Chemical Industries, Olympic Industries, Square Pharmaceuticals, Meghna Petroleum and ACI Limited were among the other turnover leaders.
Shahjibazar Power Company gained the most with a 9.93-per cent increase in its share price, while Savar Refractories lost the most, shedding 9.16 per cent. - See more at: http://newagebd.net/34413/stocks-rebound-on-healthy-corporate-disclosures/#sthash.NPY4h3vt.dpuf

Last trading day before Eid sees upward trend

FE Report - 25 July'2014 Friday
The last trading day ahead of Eid vacation closed higher Thursday with turnover improved slightly as investors went for buying spree on large cap stocks amid optimism.

The market opened with a positive note and the upward trend continued till the market closure. Eventually, DSEX, the benchmark index of the Dhaka Stock Exchange (DSEX) ended at 4,427.15 points, gaining 38.46 points or 0.87 per cent.

The DS30, comprising blue chips gained 24.47 points or 1.52 per cent to close at 1,626.52 points. The DSE Shariah Index advanced 11.42 points or 1.15 per cent to close at 1,004.66 points.

Investors' participation increased slightly, holding total turnover above Tk 3.0 billion level for the third running session and amounted to Tk 3.39 billion which was 6.50 per cent higher over the previous session's value of Tk 3.18 billion.

"Closing session ahead of Eid-ul-Fitr stepped up with investors' focus on large cap stocks," commented LankaBangla Securities, in its regular market analysis.

Coupled with improved HY earning disclosures, monetary policy statement (MPS) expectations and favorable prices at scrip-level acted as the core catalysts behind day's upturn, said the merchant bank.

Scrip-wise movements were significant, as several companies declared earnings on the day, it said.

LankaBangla Securities, said: "Market ended in the green zone backed by strong earnings registered by corporate entities in Q2".

Market turnover was also up by 6.50 per cent, indicating heightened level of participation by investors, said the stock broker.

 "The market closed on a positive note before the Eid festival break amid price increment of most of the issues across the bourse," said International Leasing Securities.

Among the large cap - GP, Square Pharma, Lafarge Surma Cement, Shahjibazar Power and FAR Chemical grabbed most of the investors' attention throughout the session, said the International Leasing.

The gainers took a lead over the lowers as out of 299 issues traded, 199 advanced, 74 declined and 26 remained unchanged on the DSE floor.

Most of the sectors performed well. Among the major sectors - telecommunication witnessed a phenomenal gain of 3.13 per cent -- thanks to GP the largest cap stock which gained 3.3 per cent alone.

Pharmaceuticals, fuel and power and food and allied sectors closed 0.97 per cent, 0.73 per cent and 0.71 per cent higher respectively. Banks and NBFIs also gained 0.46 per cent and 0.65 per cent respectably.

GP was the most traded stock with shares worth Tk 595.50 million changing hands followed by Beximco, Lafarge Surma Cement, Shahjibazar Power and Padma Oil.

Top ten stocks in turnover chart captured 55.33 per cent of the day's activities, while GP led the chart, with telecommunication, fuel and power and pharmaceutical sectors accounted for 18.57 per cent, 16.09 per cent and 13.44 per cent respectively of the day's total turnover.

Shahjibazar Power was the day's highest gainer, posting a rise of 9.92 per cent while Savar Refractories was the day's worst loser, slumping by 9.16 per cent.

The port city bourse, Chittagong Stock Exchange (CSE) also closed higher with its Selective Categories Index - CSCX - gained 60.07 points to close at 8,381.14 points.

Gainers beat losers 93 to 75, with 40 issues remaining unchanged at the port city bourse that traded 17.16 million shares and mutual fund units, turnover value of Tk 377.26 million.

Half-yearly results cheer stocks

Daily Star - 25 July'2014 Friday
Stocks end positive on the last trading day before Eid, as investors went on a buying spree yesterday thanks to good half-yearly earnings disclosure.
DSEX, the benchmark general index of the Dhaka Stock Exchange, closed the day at 4,427.15 points after gaining 38.47 points or 0.88 percent.
DSES, the shariah index of the Dhaka bourse, gained 11.43 points or 1.15 percent to close the day at 1,004.66.
“The closing session ahead of Eid-ul-Fitr stepped up with investors' focus on large-cap scrips,” IDLC Investments said in its daily market analysis.
Monetary policy statement expectations and favourable prices coupled with improved half-yearly earning disclosures acted as the core catalysts behind the day's upturn, the investment banker said.
Scrip-wise movements were significant, as several companies declared earnings yesterday, IDLC said.
“Investors' participation increased slightly, holding total turnover above Tk 300 crore for the third session.”
Turnover, the most important indicator of the market, advanced 6.48 percent to Tk 339 crore from the previous day.
The market ended in the green zone yesterday backed by strong earnings registered by corporate entities in the second quarter, said LankaBangla Securities.
Top 10 scrips in the turnover chart accounted for 55.33 percent of the day's total turnover.
Grameenphone dominated the top turnover chart with 19.46 lakh shares worth Tk 59 crore changing hands followed by Beximco, Lafarge Surma Cement and Shahjibazar Power Company.
Telecoms rose 3.18 percent, the highest among all the sectors, due to GP's rally of 3.29 percent, while non-life insurance lost 0.11 percent and textile 0.08 percent.
A total of 0.66 lakh trades were executed with 7.10 crore shares and mutual fund units changing hands on the premier bourse.
Gainers took a strong lead over the losers by 199 to 74 with 26 issues remaining unchanged on the DSE floor.
Shahjibazar Power Company posted the highest gain of 9.93 percent, while Savar Refractories was the worst loser with a fall of 9.16 percent.
The Chittagong Stock Exchange also gained yesterday with its selective categories index, CSCX, rising 60.07 points to close the day at 8,381.
Of the 208 issues that traded on the port city bourse, 93 advanced, 75 declined and 40 remained unchanged with Tk 38 crore in turnover.

Wednesday, July 23, 2014

BSEC likely to empower bourses for IPO process

New Age - 23 July'2014 Wednesday


HM Murtuza
The Bangladesh Securities and Exchange Commission is likely to empower the stock exchanges to issue no-objection certificate for the proposed initial public offerings, a BSEC senior official told New Age.
The BSEC will start its scrutiny process over a proposed IPO once the stock exchanges will issue NOC to the issuer company, he said.
The Dhaka Stock Exchange and the Chittagong Stock Exchange will also send their observations over the company’s financial statements to the regulator with the NOCs, the official said.
The capital market regulator has taken the move as it has been facing strong criticisms from different quarters regarding IPO approval.
It is a worldwide practice that the capital market regulator by laws is not liable for any short of financial soundness of the companies it approves for IPOs, the BSEC official said.
The proposed amendment to the Securities and Exchange Commission (Public Issue Rules) 2006 will empower the bourse in this regard and will make the stock exchanges liable for any short of irregularities and violation of law committed by issuer companies, he said.
The official said the commission would finalise the proposed amendments for seeking public opinions next month.
Along with other stakeholders, the DSE recently criticised the BSEC’s role in IPO approval that was another reason for the regulator’s move.
The bourse at a recent board meeting decided not to enlist the companies approved by the BSEC if there are major inconsistencies and violation of rules by the issuer companies.
The bourse also decided to submit its observation on the proposed IPO with its board’s appraisal to the BSEC.
Presently, the DSE submits its observation on the draft prospectus submitted by the issuer companies without its board’s appraisal.
Following the DSE’s decision, the BSEC recently held a meeting with the DSE.
The capital market regulator at the meeting warned the bourse for taking such move as the stock exchange is bound to follow BSEC’s order by law, the BSEC official said.
‘We also informed the bourse that its step to challenge the regulator is a punishable act,’ he said.
The meeting also informed the bourse that it was also observed that 70-75 per cent of the bourse’s observations on draft prospectuses were unrealistic and illogical, he said.
The bourse, since its dispute with the BSEC regarding the bourse’s observation on Orion Pharma in 2011, closed the ‘expert panel’ department which was opened for preparing DSE’s observation on draft prospectus.
The BSEC official also said that presently BSEC only allows the companies to raise capital through IPO once those comply with its rules, regulations and guidelines.
Once the regulator will empower the bourses to issue NOCs based on its inspection report and observation on the companies’ financial statements, the bourses will be liable for any irregularity committed by the issuer companies, the official added.

 

HM Murtuza
The Bangladesh Securities and Exchange Commission is likely to empower the stock exchanges to issue no-objection certificate for the proposed initial public offerings, a BSEC senior official told New Age.
The BSEC will start its scrutiny process over a proposed IPO once the stock exchanges will issue NOC to the issuer company, he said.
The Dhaka Stock Exchange and the Chittagong Stock Exchange will also send their observations over the company’s financial statements to the regulator with the NOCs, the official said.
The capital market regulator has taken the move as it has been facing strong criticisms from different quarters regarding IPO approval.
It is a worldwide practice that the capital market regulator by laws is not liable for any short of financial soundness of the companies it approves for IPOs, the BSEC official said.
The proposed amendment to the Securities and Exchange Commission (Public Issue Rules) 2006 will empower the bourse in this regard and will make the stock exchanges liable for any short of irregularities and violation of law committed by issuer companies, he said.
The official said the commission would finalise the proposed amendments for seeking public opinions next month.
Along with other stakeholders, the DSE recently criticised the BSEC’s role in IPO approval that was another reason for the regulator’s move.
The bourse at a recent board meeting decided not to enlist the companies approved by the BSEC if there are major inconsistencies and violation of rules by the issuer companies.
The bourse also decided to submit its observation on the proposed IPO with its board’s appraisal to the BSEC.
Presently, the DSE submits its observation on the draft prospectus submitted by the issuer companies without its board’s appraisal.
Following the DSE’s decision, the BSEC recently held a meeting with the DSE.
The capital market regulator at the meeting warned the bourse for taking such move as the stock exchange is bound to follow BSEC’s order by law, the BSEC official said.
‘We also informed the bourse that its step to challenge the regulator is a punishable act,’ he said.
The meeting also informed the bourse that it was also observed that 70-75 per cent of the bourse’s observations on draft prospectuses were unrealistic and illogical, he said.
The bourse, since its dispute with the BSEC regarding the bourse’s observation on Orion Pharma in 2011, closed the ‘expert panel’ department which was opened for preparing DSE’s observation on draft prospectus.
The BSEC official also said that presently BSEC only allows the companies to raise capital through IPO once those comply with its rules, regulations and guidelines.
Once the regulator will empower the bourses to issue NOCs based on its inspection report and observation on the companies’ financial statements, the bourses will be liable for any irregularity committed by the issuer companies, the official added.
- See more at: http://newagebd.net/33388/bsec-likely-to-empower-bourses-for-ipo-process/#sthash.qFiame1z.dpuf


5 multinational cos log increased profit

New Age - 23 July'2014 Wednesday
HM Murtuza
Out of six multinational companies, which declared financial statement so far, five companies reported increased profit during the latest financial period compared with the same period of the previous year.
The five companies are: Lafarge Surma Cement, Bata Shoe, Marico Bangladesh, British American Tobacco Bangladesh and Grameenphone.
Linde Bangladesh Limited is the only company that made declined profit during January-June period of 2014 compared with its earning during the same period of the previous year.
Lafarge Surma Cement during the January-June period reported consolidated profit after tax at Tk 1,40.22 crore with earning per share of Tk 1.21 against its profit of Tk 106.20 crore and EPS of Tk 0.91 respectively for the same period of the previous year.
The company’s accumulated losses stood at Tk 12.25 crore as of June 30, 2014.
Bata Shoe’s profit after tax increased to Tk 27.87 crore in the fist half of the calendar year against its profit of Tk 24.33 crore in the same period of the previous year.
Marico Bangladesh reported profit after tax of Tk 46.66 crore in April-June period of 2014 which was relatively higher than its profit of Tk 41.72 crore during the same period of the previous year.
British American Tobacco Bangladesh’s profit after tax increased to Tk 287.22 crore in the first half of 2014 compared with its earning of Tk 206.33 crore during the same period of the previous year.
Earning per share of the company also increased to Tk 47.87 during January-June period against its EPS of Tk 34.39 respectively for the same period of the previous year.
The profit after tax of Grameenphone stood at Tk 1,060.12 crore with earning per share of Tk 7.85 in January-June period against Tk 510.38 crore and Tk 3.78 respectively for the same period of the previous year.
As per the published report of Linde Bangladesh, the company made profit of Tk 29.49 crore in the first half of the year against its earning of Tk 34.33 crore in the same period of the previous year.

Brokerage house fined

FE Report - 23 July'2014 Wednesday
The securities regulator Tuesday slapped a fine worth Tk 0.3 million on Harun Securities for breaching margin loan related securities rules, officials said.

The decision was taken at a commission meeting held at the office of the Bangladesh Securities and Exchange Commission (BSEC).

The BSEC Executive Director Mohammad Saifur Rahman said the commission imposed the penalty based on a probe report filed by the BSEC officials.

As per the probe report, Harun Securities breached securities rules by providing margin loan with its directors and office staffs.

The company has also disbursed margin loans without ensuring any loan agreement with the clients.

Harun Securities has also disbursed margin loans against the 'Z' category securities and breached another clause of margin loans.

Lafarge Surma signs deal with Metrocem

FE Report - 23 July'2014 Wednesday
Lafarge Surma Cement Tuesday signed a toll-grinding agreement with Metrocem Cement at a ceremony organized at the company's headquarters, reports BSS.

Under this agreement, Lafarge Surma Cement will provide high quality clinker from its fully integrated cement plant at Chhatak to Metrocem Cement, which will then produce a world class Portland Composite Cement brand for Lafarge Surma Cement, said a press release of Lafarge Surma Cement.

This will be subject to strict quality control by employees of Lafarge Surma Cement to ensure world class quality that the Company promises to deliver to its customers.

Investors take fresh position

FE Report - 23 July'2014 Wednesday
The market remain upbeat Tuesday with improved turnover as better earnings figures and hope for capital market-friendly monetary policy stimulated investors to take fresh position in the market.

The session started in a flurry, with promising earnings figures appearing early in the morning and the upbeat mood continued till the market closure.

Half yearly earnings of the listed companies with June year-end have started to come up.  About 15 companies have reported their 2H'2014 earnings Tuesday.

DSEX, the benchmark index of the Dhaka Stock Exchange (DSEX) crossed the 'psychological' threshold of 4,400 points mark after 12-session and ended at 4,424.60 points, gaining 29.65 points or 0.67 per cent.

The other two indices also ended higher. The DS30, comprising blue chips gained 12.38 points or 0.77 per cent to close at 1,618.06 points. The DSES rose 8.09 points or 0.81 per cent to close at 999.80 points.

The total turnover rose to Tk 3.75 billion, registering an increase of 21.35 per cent over the previous session's value of Tk 3.09 billion.

"Declaration of better half-yearly and quarterly earnings stimulated the investors to take fresh position in the market," commented International Leasing Securities, in its regular market analysis.

"The investors' expectation regarding the next monetary policy statement also triggered the upbeat market sentiment to some extent" said the International Leasing.

IDLC Investments, said: "With earnings declarations being on the driving seat, market subdued the recent monotonous down trend for the second day".

"Hope for a capital market-friendly monetary policy assisted investors to revive enthusiasm. Consequent increase in activities resulted in a turnover of Tk 3.75 billion," said the merchant bank.

"Equity market continued positive momentum for yet another session backed by cue of recovery in quarterly earnings of stocks," commented LankaBangla Securities.

Brokerage house fined

FE Report - 23 July'2014 Wednesday
The securities regulator Tuesday slapped a fine worth Tk 0.3 million on Harun Securities for breaching margin loan related securities rules, officials said.

The decision was taken at a commission meeting held at the office of the Bangladesh Securities and Exchange Commission (BSEC).

The BSEC Executive Director Mohammad Saifur Rahman said the commission imposed the penalty based on a probe report filed by the BSEC officials.

As per the probe report, Harun Securities breached securities rules by providing margin loan with its directors and office staffs.

The company has also disbursed margin loans without ensuring any loan agreement with the clients.

Harun Securities has also disbursed margin loans against the 'Z' category securities and breached another clause of margin loans

Banking industrys efficiency level falls

FE Report - 23 July'2014 Wednesday
Siddique Islam
The overall efficiency ratings of the country's banking sector declined slightly last year due mainly to higher volumes of non-performing loans the banks were burdened with, officials said on the basis of latest evaluation.

It was found out that the efficiency ratio of all banks stood at 77.81 per cent that means the banks spend around 78 paisa to earn Tk 1.0 during the year 2013. The ratio figure was nearly 74 paisa a year ago.

The aggregate efficiency level of specialised banks was at its worst, 94.83 per cent in the bygone year. The state-owned commercial banks (SoCBs), private commercial banks (PCBs) and foreign commercial banks (FCBs) had the ratio counts as 84.07 per cent, 77.90 per cent and 50.40 per cent respectively.

A latest report published by Bangladesh Bank (BB) Tuesday revealed the downward efficiency ratings of the banks in their banking operations.

"The banks have to apply due diligence for both sanctioning and disbursement of loans properly to avoid adverse classification of loans which has the highest impact on the efficiency ratio," a BB official told the FE about the remedies.

Besides, the banks have to be more careful against fraud and forgery that may occur in connivance with their own employees, he observed with regard to the much-talked-about malpractices that have shaken some of the banks in recent times.

"The banks will have to improve internal control system through improving efficiencies of their officials concerned alongside giving freedom of work," the central banker noted.

The amount of default loans jumped to Tk 427.26 billion in 2012   from Tk 226.4 billion in the previous calendar year, according to the report on recent initiatives in the Department of Off-site Supervision (DOS) of the central bank.

 "The volume of classified loans almost doubled in 2012 following large-scale financial irregularities in different commercial banks," another BB official explained.   

He also said the central bank is now working to ensure credit discipline in the country's banking sector through strengthening its monitoring and supervision.

The position of NPL stood at Tk 405.83 billion in 2013 following a substantial amount of loan having been rescheduled by the banks by banking on advantage yielded by relaxation of the loan- rescheduling policy.

Earlier on December 23 last year, the central bank relaxed the rescheduling policy on a limited scale for the next six months to facilitate the financing for the businesses affected by political unrest.

The amount of classified loans increased significantly in the first quarter (Q1) of 2014 due mainly to lack of proper oversights on rescheduled loans.

The volume of classified loans increased 18.70 per cent to Tk 481.72 billion in the January-March period of 2014 from Tk 405.83 billion this quarter of the last calendar year, the BB data on the dud money showed.

 "We're trying to strengthen our both off-site and on-site supervisions for ensuring stability in the country's banking sector," Abu Hena Mohammad Razee Hassan, deputy governor of the BB, said.

He spoke of the corrective measures while addressing the report-launching ceremony at the central bank headquarters in Dhaka.

He also said the central bank has already taken different measures, including scrutinizing of the banks' balance sheets, to curb financial irregularities in the banking sector.

Among others, BB Executive Directors SM Moniruzzaman and Mohammad Naushad Ali Chowdhury and General Manager of the DOS SM Rabiul Hassan also spoke on the occasion.

GP's half-yearly net profit doubles

Daily Star - 23 July'2014 Wednesday
Grameenphone's net profit more than doubled to Tk 1,060 crore between January and June from the same period a year ago, thanks to healthy revenue growth from 3G data services.

The company's revenue from 3G, high-speed internet services launched in October last year, was Tk 50 crore in the second quarter of 2014.

The astronomical earnings by the country's largest mobile phone operator were helped by subscriber growth and revenue from 2G data, SMS and content services.

GP's revenue in the first six months of this year was Tk 5,110 crore, up 7.8 percent from the same period last year. Service revenue grew by 7.5 percent year-on-year along with 14.3 percent growth in device and other revenues.

The net profit in the second quarter went up by almost 10 times to Tk 544 crore, from Tk 56 crore during April-June period of last year.

“GP managed another growth quarter as indicated last time, giving the first half a solid base to finish 2014 with a healthy performance,” said Vivek Sood, chief executive officer of Grameenphone.
“Stable political environment, improving economic activities and GP's strong traction in the market contributed to this elevated performance,” he said.

“Its strategic ambition of internet for all and enabling position on mobile financial services has been well executed.”

However, the telecom industry is challenged by high VoIP (voice over internet protocol) traffic via some operators, he said.The half-yearly earnings per share of the country's lone listed mobile operator more than doubled to Tk 7.85 from the same period a year ago.

The healthy earnings prompted GP to announce 95 percent interim cash dividends for shareholders for this year.

“This reinforces GP's commitment towards creating value for shareholders,” Sood said.

The earnings news gained the company's stock 1.55 percent, pushing it to Tk 293.50 per share on the Dhaka Stock Exchange yesterday.

GP started the second quarter in the stockmarket with significant buy pressure from foreign investors, consequently creating a strong rally. After that, it performed flat in the middle of the quarter with some momentum injected by healthy earnings.

Between April and June, GP added 60 lakh subscribers to take the tally to 4.92 crore, which is approximately 42.1 percent of the total market share.

The company invested Tk 650 crore in the first six months of this year for 3G rollout in all 64 district headquarters, 2G coverage and capacity and efficiency enhancement.

Published: 12:01 am Wednesday, July 23, 2014


Banks await $20b opportunity to invest in power - StanChart analyses demand for loans in power sector

Daily Star - 23 July'2014 Wednesday
Md Fazlur Rahman
Bangladesh's power sector opened opportunities for private banks to lend between $10 billion and $20 billion by 2030, as the country struggles to narrow the gap between demand and supply of electricty.
The government plans to produce 39,000 megawatts of electricity by 2030 against estimated demand of 34,000MW at the time to fulfil its ambitious plan of taking power to all by 2021.
Plugging the energy gap will require $60 billion of additional investment up to 2030, Standard Chartered Bank said in an analysis.
“The government will not be able to fund this solely, which lends significant room for private-sector involvement,” it said.
Despite the government's substantial spending for the power and energy sector, the power sector needs increased private participation -- either from domestic or foreign sources, according to the analysis.
The share of private-sector financing in power projects will increase to 58 percent by 2016, according to the Power Development Board.
StanChart said previous large independent power producer projects had a debt component of around 60-70 percent, with the rest coming from equity financing.

Over time, as Bangladesh moves up the income ladder, a larger part of the debt financing is likely to come from bank lending, as the country is likely to become less eligible for multilateral concessional debt, the bank said.
"We think banks could provide up to a maximum of 50 percent of project financing over the medium to long term. If we assume a 60 percent private-sector share over the medium term, this suggests that $40 billion of the additional investment required for power projects up to 2030 must come from private sources," it said.
On this basis, the analysis sees minimum potential for bank financing of power projects until 2030 at $10 billion and maximum potential at $20 billion.
Private commercial banks have already stepped in.
Recently, StanChart raised $190 million from international lenders for a 335-megawatt electricity plant of Summit Meghnaghat Power Company Ltd in a single largest funding for any private power company in the country. The British bank itself has contributed $40 million to the fund.
Investing in energy capacity is likely to have a positive effect on growth. The $60 billion of investment has the capacity to raise nominal GDP by $50 billion by 2030, the bank said. The analysis also pointed to the failure of timely implementation of the project.
Between 2010 and 2013, only 50 percent of planned electricity generation was added to the grid.
"Timely project implementation will be crucial for achieving the power generation targets. Inefficiencies in project implementation need to be resolved at the earliest."
The analysis also touched upon the coal issue.
According the government's energy master plan, coal's share of electricity generation should increase from 3 percent currently to 20 percent by 2020, 30 percent by 2025 and 50 percent by 2030.
The government has drafted several coal policies, but there is no consensus on the issue yet, depriving the country of tapping its vast reserves of high quality coal.
"Political will and consensus building will be required to push forward domestic coal extraction – not easy when the issue of food security in a high-inflation country is at stake," according to the analysis.
"However, given that energy security is a top government priority, we are optimistic that clarity on the national coal policy will be forthcoming sooner rather than later."
Electricity shortage has high economic costs. The World Bank estimates that load shedding represents a loss of 0.5 percent in GDP and a $1 billion loss in terms of industrial output a year.
There are also financial and environmental costs of owning generators to compensate for power outages, StanChart said.

Published: 12:00 am Wednesday, July 23, 2014

Profit Growth Of Mncs In First Half Of The Year - Stable market brings good profits to multinational firms

Daily Star - 23 July'2014 Wednesday
Gazi Towhid Ahmed
 
Higher sales and falling cost of production have helped multinational companies earn good profits in the six months to June.
Lafarge Surma Cement's net profit rose 32.07 percent to Tk 140 crore in the January-June period from the same time a year ago.
“We have posted healthy profit with increasing sales and falling costs of production this year,” said Masud Khan, finance director of Lafarge Surma Cement.
The company increased production and cut power costs and our interest cost also declined as we repaid foreign loans last year.”
The Indian rupee fluctuations affected operating costs last year, especially through the materials imported from Meghalaya in India, he said. It was not the case this year as the currency was stable, Khan said.
“Our deferred tax also declined in the period.” Lafarge's earnings per shares stood at Tk 1.21 in the last six months, and its share price advanced 2.55 percent to Tk 84.4 yesterday.
Bata Shoes' profits accelerated 14.53 percent to Tk 28 crore in the first half of the year compared with the same period last year, with implementation of a cost control strategy.
“We have controlled costs of production,” Hashim Reza, company secretary of Bata Shoes.
The prolonged political crisis has cut the purchasing power of the consumers; otherwise the profits could have been higher, Reza said. “Sales turnover in the period failed to meet our expectations.”
The half-yearly earning declaration appreciated the company's share prices by 1.64 percent, which closed at Tk 966.30 yesterday. Bata's EPS stood at Tk 20.37 for the period.
In the first quarter ended June 30, Marico Bangladesh's net profit rose 11.84 percent to Tk 47 crore from the same period last year, on the back of growing consumer confidence over calm political environment in the country.
Political stability boosted consumption in the period, said Iqbal Chowdhury, finance director of Marico Bangladesh. The stability of the exchange rate also helped Marico pull up profits, he said. Marico is a major player in the local consumer market, he said.
The company's revenue stood at Tk 215 crore in the first quarter, up 12 percent from the same period last year, with EPS at Tk 14.82 for the period.
Marico also declared an interim cash dividend of 150 percent for the year that will end on March 2015. Share prices of Marico fell 1.48 percent to close at Tk 1,052.
British American Tobacco Bangladesh's net profit rose 39.21 percent to Tk 287 crore in the first half of the year, compared to the same period a year ago.
The company sold 20.5 billion sticks in the period, higher from 17.8 billion sticks in the same period last year, which represents a staggering volume growth of 15.2 percent, according to BRAC EPL Stock Brokerage.  
Consequently, net revenue of the company saw 17.6 percent year-on-year growth in the first half, BRAC EPL said. The company's EPS stood at Tk 47.87 for the period.
Linde Bangladesh's earned a profit of Tk 29 crore in the six months, which is 14.09 percent lower compared with the same period last year. “Our business is the same compared to the previous period,” said Mohammed Nazmul Hossain, finance director of Linde Bangladesh.
“Profit was higher in the previous quarter of last year as we have earned Tk 7 crore from selling lands.”
The company's main business is welding electrodes used in real estate, he said, adding that there is no growth in the company's portfolio because of the sluggish real estate sector. The company announced 200 percent interim cash dividends for the year that will end on December 2014.
gazitowhid@gmail.com





Tuesday, July 22, 2014

Next monetary policy to be capital market-friendly Announcement on July 26

Daily Star  - 22 July'2014 Tuesday
The central bank's next monetary policy will be capital market-friendly, a top central banker said.

The Bangladesh Bank (BB) has now decided to announce its first half-yearly monetary policy on July 26, instead of July 27.

"We'll announce the monetary policy that will be a capital market-friendly," BB deputy governor SK Sur Chowdhury disclosed while speaking at a press briefing after a bankers' meeting Monday.

He also said the banks have been asked to bring down their overall capital market investment within 25 per cent of total capital through time-bound business plans by July 21, 2016.

Taking to the FE, another BB official said the central bank has re-fixed the date of its monetary policy announcement on July 26 instead of July 27 earlier following the upcoming Eid vacation.

BB Governor Atiur Rahman will announce the half-yearly (July-December) monetary policy statement (MPS) on the day aiming to gear up the country's overall economic activities through boosting both local and foreign private investment.

The BB official hinted that the private sector credit growth target might increase slightly in the next MPS.

The central bank earlier fixed the private sector credit growth target at 16.5 per cent for the second half-yearly MPS of the fiscal year (FY) 2013-14.

"The BB wants to contain inflation and help the productive sectors in achieving maximum economic growth through employment generation across the country," the central banker noted.

He also said the central bank is extending its policy supports aiming to bring dynamism in the country's overall economic activities through increased investment, particularly in the private sector.

Stocks return to black as investor confidence grows

Daily Star  - 22 July'2014 Tuesday
Stocks returned to the black yesterday, powered by an investors' buying spree amid earnings expectations.

DSEX, the benchmark general index of the Dhaka Stock Exchange, closed the day at 4,394.94 points, after gaining 20 points or 0.47 percent. The shariah index of the premier bourse, DSES, rose 7.44 points or 0.47 percent, to close at 991.

Strong demand for large-cap stocks, triggered by earnings expectations kept market sentiments upbeat, said IDLC Investments.

Investors rebalanced their portfolios by injecting some fresh funds, as they reacted to disclosed earnings and undisclosed earnings expectations, the investment banker said.

The monetary policy due next week was also eyed by the market players.

The market has gone back to the growing turnover trend implying an increase in investor confidence and lulled the selling pressure, following the flow of better than expected quarterly declarations, especially of financial stocks, said LankaBangla Securities.

Turnover advanced 17.19 percent to Tk 309 crore from the previous day. A total of 0.75 lakh trades were executed with 7.41 crore shares and mutual fund units changing hands on the Dhaka bourse.

The gainers took a strong lead over losers with 174 to 92, as 32 remained unchanged out of 303 issues that traded on the DSE.

All the large-cap sectors closed positive: telecoms advanced 3.4 percent, mainly driven by Grameenphone's 3.6 percent gain. Telecoms rose 1.14 percent, pharma 1.14 percent, non-bank financial institutions 1.13 percent, power 0.32 percent and food and allied 0.25 percent.
Beximco that gained 5.9 percent remained the most traded stock for seven straight sessions, with 1.14 crore shares worth Tk 43 crore changing hands. It was followed by Shahjibazar Power Company, Square Pharma and Olympic Industries.

Exim Bank First Mutual Fund posted the highest gain of 8.86 percent, while Standard Insurance Company was the worst loser, plunging by 4.72 percent.

Published: 12:00 am Tuesday, July 22, 2014


Dhaka bourse to resume IPO scrutiny after a two-year pause

Daily Star  - 22 July'2014 Tuesday
Sarwar A Chowdhury
The Bangladesh Securities and Exchange Commission has asked the premier bourse to restart scrutinising the draft IPO prospectuses and send recommendations to the regulator.
The move comes following a controversial listing of a chemical manufacturing company, which masked market-sensitive information about its directors in the IPO prospectus.

“We sat with the exchange officials last week, and decided that the bourse will submit its observations within 28 days of IPO prospectus submission to the regulator,” said Arif Khan, a commissioner of the BSEC.

He said they are also considering making public the draft prospectuses on the bourse's website for stakeholders' perusal.

The DSE had a listing committee until November 2011 that was responsible for analysing the draft initial public offering prospectuses in brief and making recommendations to the regulator.

The body was abolished upon a verbal instruction from the regulator following a conflict between the DSE and BSEC on the listing of a company.

But in April 2012, the prime bourse formed a 14-member expert panel to look into the companies' balance sheets, accounts, earnings per share, net asset value, business performance and growth, credit rating, valuation, risk factors and the IPO offer price in the prospectus.

The DSE once again dissolved the panel, as its observations were not evaluated by the securities regulator while giving consent to the IPO proposals.

Recently, the DSE at a board meeting also raised their concern over the controversial listing of a company.

On June 8, FAR Chemicals made a controversial debut on the stockmarket, as the company concealed market-sensitive information about its directors in its IPO prospectus that was a violation of securities rules.

The textile chemical manufacturer, however, made the concealed information public after an instruction from the BSEC.
 
Published: 12:00 am Tuesday, July 22, 2014




Friday, July 18, 2014

PROPOSED FINANCE COMPANY ACT - BSEC against allowing BB to control m-banks, v-capital

New Age - 18 July'2014 Friday
HM Murtuza


HM Murtuza
The Bangladesh Securities and Exchange Commission has opposed empowering Bangladesh Bank to regulate merchant banks, venture capital and securitisation business under the proposed Finance Company Act, 2014.
The capital market regulator has taken the stance as it has been regulating merchant banks, venture capital and securitisation business under the Securities and Exchange Ordinance, 1969 and different other rules under the ordinance.
A BSEC official said that empowering central bank to regulate the institutions under the proposed Finance Company Act, 2014 would create duel regulatory situation and might arise many complications for both the regulators and for institutional as well.
The proposed act will replace the Financial Institutions Act, 1993.
The BSEC proposed the adjustment in the proposed Finance Company Act, 2014 at a meeting presided over by Banking and Financial Institutions Division secretary M Aslam Alam last week.
Representatives of the commerce ministry, Bangladesh Bank, BSEC and National Board of Revenue were present, among others.
As per the draft act proposed by the ministry, financing like investment banking business, venture capital and securitisation business are included under the definition of financing which businesses to be conducted as per the BB’s approved process.
The BSEC, mentioning the fact, said that merchant banking, venture capital and securitisation business should be scrapped from section 2 (1) of the proposed act.
The capital market regulator opposed inclusion of another proposal under the Section 2 (17) [A,B,C] as the BSEC regulates those businesses under the Bangladesh Securities and Exchange Commission (Merchant Banker and Portfolio Manager) Rules 1996.
The proposed act also offers ‘super power’ to the central bank over the subsidiaries of finance companies that will allow BB to issue directive and inspect the subsidiaries of finance companies if it contradicts with any other laws.
Opposing the section 20 (2) (5) of the proposed Finance Company Act, 2014, the BSEC said that the proposed section was totally illogical and unnecessary.
As finance companies are licensed by Bangladesh Bank and most of their subsidiaries are licensed by the BSEC, establishing control by the central bank over the subsidiaries of finance companies is beyond the BB’s regulatory framework, it said.
As the central bank cannot formulate any guidelines for the subsidiaries, directing subsidiaries of finance companies under the proposed act is beyond its rights, the capital market regulator said.
The proposed act has included subsidiaries of finance company under the definition of finance company’s definition.
‘Inclusion of subsidiaries under the definition of finance institution is illogical and out of BB’s regulatory framework as the BSEC has the guidelines to inspect those subsidiaries approved by it,’ the capital market regulator said.
The capital market regulator also suggested treating finance institutions’ investment on the mutual funds as money market investment as mutual fund invests 60 per cent of its fund size in the capital market and rest 40 per cent in the money market.
Calculating subsidiaries’ investment on mutual fund as capital market investment will result in dual count as the institutions’ capital market investments, BSEC said.