Wednesday, August 20, 2014

Faster IPO subscription project takes off next month

Daily Star - 20 August'2014 Wednesday
A new simpler and faster IPO subscription method will start under a pilot project next month.
The new system will cut down the processing time of an initial public offering (IPO) to three weeks from the current requirement of more than five weeks.
It will also eliminate hassles that investors face in submitting IPO applications and depositing cash with the banks and getting refunds for unsuccessful applications.
As many as 118 stockbrokers and merchant banks will participate in the pilot project, which was approved in a meeting of Bangladesh Securities and Exchange Commission last week.
Of the institutions, 66 stockbrokers are from Dhaka Stock Exchange, 36 stockbrokers from Chittagong Stock Exchange and 16 are merchant banks.
The stockmarket regulator also asked the institutions to inform their clients about the pilot project for IPO subscription.
Investors will pay the IPO subscription fee to the stockbroker or merchant banks that will keep the amount in a block account.

The stockbroker or the merchant bank will provide the issue manager with IPO subscribers' data, which will be checked by the Central Depository Bangladesh Ltd before the IPO lottery.

The stockbrokers and the merchant banks will transfer the money of successful IPO applicants to the issuer company's escrow account.
Investors that are not successful in the lottery will be allowed to withdraw or use their proceedings immediately after the lottery. In addition to the pilot project, investors can also make IPO subscription through the existing system.
Presently, retail investors need to attach cheque or cash to the completed IPO application form and hand it in to the issuer's designated banks. After the lottery, successful applicants get allotment certificates; while unsuccessful applicants have to collect refund warrant to encash the subscription fees.
Published: 12:00 am Wednesday, August 20, 2014

Stocks return to green

FE Report - 20 August'2014 Wednesday
Stocks returned to the green Tuesday after previous day's flat movement with improving turnover, as investors went on a buying spree to buy shares on heavy-weight stocks amid optimism.

The market started with a positive note and the positive momentum continued till the market closure. DSEX, the prime index of the Dhaka Stock Exchange (DSE) went up by 22.22 points or 0.48 per cent and closed at three and half months' peak of 4,576.37 points.

The other two indices also closed higher. The DS30, comprising blue chips gained 21.33 points or 1.24 per cent to close at 1,733.90 points. The DSE Shariah Index advanced 7.48 points or 0.70 per cent to close at 1,070.25 points.

The total turnover on the DSE improved to Tk 7.43 billion, which was 20.7 per cent higher over the previous session's value of Tk 6.15 billion.

The investors' attention was mainly focused on pharmaceuticals, fuel and power, engineering and textile sectors, accounted for 16.52 per cent, 15.49 per cent, 11.57 per cent and 11.13 per cent respectively of the day's total turnover.

"Investors' buying binge of large cap stocks pulled up the market," said an analyst.

"Spurred with last session's cautious stance, investors moved ahead Tuesday with strong focus on June year-end companies," commented IDLC Investments, in its regular market analysis.

In anticipation of better corporate declarations, investors re-balanced their positions amid stable macro-economic scenario, resultantly, market ended positive, said the merchant bank.

The market participants' confidence is getting stronger and subsequently influencing investors return to market from side-line and turnover crossed Tk 7.0 billion-mark again, averaging daily turnover at Tk 6.20 billion after Eid festival, the merchant bank added.

"The market witnessed a typical bullish session as the investors are anticipating this recent spell to continue," said International Leasing Securities.

The investors turned their attention towards MJL BD and Titas Gas from fuel and power sector and a couple of issues from cement sector - Premier Cement and Meghna Cement, said the International Leasing.

LankaBangla Securities said that the market flattered the strong move in heavy-weight stocks. Mostly, three heavy-weights - Beximco, GP and Square Pharma have lifted up the benchmark index.

Among the major industrial news, the pharmaceutical-product exports increased by more than 31 per cent in July, thanks to the growing demand of local medicines on domestic as well as international markets, according to official data.

Significant strength has been observed in pharmaceuticals stocks with 1.2 per cent return in market capitalization, while cement gained by 1.4 per cent, fuel and power 1.6 per cent and telecommunication 0.70 per cent.

In the financial sector - both banks and NBFIs retraced with 0.26 per cent and 1.27 per cent respectively. Food and allied sector closed flat in the red with 0.05 per cent loss.

The losers, however, took a modest lead over the gainers as out of 301 issues traded, 171 declined, 108 advanced and 22 remained unchanged on the DSE floor.

Activities increased in the major bourse (DSE) where trade and volume were up by 0.42 per cent and 1.36 per cent respectively. A total of 0.149 million trades were executed with 160.80 million securities of trading volume.

The total market capitalisation on DSE stood at Tk 3,051.88 billion against Tk 3,041.07 billion in the previous session.

MJL BD was the most traded stock with shares worth Tk 527.92 million changing hands followed by Beximco, ACI, Lafarge Surma Cement and GP. These top five issues captured 28.48 per cent of day's total turnover.

Beximco was the day's highest gainer, posting a rise of 7.80 per cent in while Shympur Sugar Mills was the day's worst loser, slumping by 7.24 per cent.

The port city bourse, Chittagong Stock Exchange (CSE) also closed positive with its Selective Categories Index - CSCX - gained 40.24 points to close at 8,581.37 points.

Losers beat gainers 140 to 72, with 20 issues remaining unchanged at the port city bourse that traded 14.38 million shares and mutual fund units, turnover value of Tk 547.47 million.

NBR changes mode of payment by listed cos

FE Report - 20 August'2014 Wednesday
Doulot Akter Mala
The brokerage houses will deduct tax at a rate of 10 per cent from the income to be gained from securities by listed companies and firms, the NBR has said.

In a circular, issued on August 18, the National Board of Revenue (NBR) changed mode of payment by the listed companies and firms from the current fiscal year (FY).

The SRO came into effect from July 1, 2014.

The NBR also kept 5.0 per cent capital gain tax unchanged for sponsor shareholders and shareholder directors of banks and financial institutions and different intermediaries of stock markets.

In the budget proposal for 2014-15, the Finance Minister had scrapped the earlier Statutory Regulatory Order (SRO), issued in 2010, on tax measures for stock market share holders with the imposition of tax on individual investors.

Later, the government backtracked from the move to impose capital gain tax for individual shareholders through the Finance Act-2014 on June 28.

Following the shift in decision, the tax issues for sponsor share holders and other turned quite complex.

A senior tax official said after scrapping the SRO of 2010 sponsor share holders and shareholder directors of banks and financial institutions were automatically included in regular 15 per cent capital gain tax slab.

Also, shareholders who hold more than 10 per cent share of paid-up capital of a company came under 15 per cent capital gain tax.

To resolve the confusion, the NBR issued the SRO by clarifying that the shareholders would have to pay 5.0 per cent tax on their income from securities like last year.

Transactions of securities, stocks, share, mutual fund, bond and debenture, except government ones, at the stock markets in the country would have to pay the 5.0 per cent tax that they are enjoying since 2010.

The benefit was left out as the revenue board had cancelled the related SRO.

According to the new SRO, sponsor shareholders and directors of banks, financial institutions, merchant banks, insurance companies, leasing companies, portfolio management companies, stock dealer or stock broker companies will have to pay tax at the rate of 5.0 per cent on income derived from share transactions at capital markets.

For, other shareholders, except sponsor shareholders and shareholder directors, who hold more than 10 per cent of paid-up capital of listed companies at any time of the FY will have to pay the tax at reduced rate 5.0 per cent.

 However, the SRO made it clear that individual investors in the capital markets were exempted from paying tax on their capital gain.

Tuesday, August 19, 2014

Lafarge Cement In response to DSE query

In response to a DSE query, the Company has informed that there is no undisclosed price sensitive information of the Company for recent unusual price hike.

Khulna Printing shares soar on debut

Daily Star - 19 August'2014 Tuesday
The share price of Khulna Printing and Packaging Ltd gained 271 percent to Tk 37.1 on its debut in the stockmarket yesterday, as investors went on a buying spree.
The company became the highest gainer of the day on the DSE floor and also featured in the most-traded stocks chart with 1.5 crore shares worth Tk 51 crore changing hands.
KPPL is the second listed company under the “paper and printing” category on the Dhaka bourse after Hakkani Pulp and Paper Mills.
Bangladesh Securities and Exchange Commission approved the initial public offering of the company in March.
The packaging company will float four crore ordinary shares worth Tk 10 each to raise Tk 40 crore to meet the working capital needs and pay back bank loans.
KPPL's net profit rose 23.34 percent to Tk 6.5 crore in the nine months to March compared to the same period last year.
Its earnings per share stood at Tk 2.46 in the period.

KPPL, a unit of Lockpur Group, produces packaging materials for export industries, especially for frozen shrimps, according to the company's website.
The firm also produces polybags and non-printed polybags of different sizes.
The main customers of KPPL's products are its sister concerns as they account for 63 percent of the company's revenue.
The company's revenue comes from the three sectors: packaging 65 percent, laminating 20 percent and printing 15 percent.
Published: 12:00 am Tuesday, August 19, 2014

Bank deposits mount despite rate cuts

Daily Star - 19 August'2014 Tuesday

Rejaul Karim Byron
Bank deposits rose 15.81 percent year-on-year in fiscal 2013-14 despite the cuts in interests on savings in the past one year.
On June 30, the total deposit in the banking sector stood at Tk 668,358 crore, with private banks accounting for 63.88 percent of the sum, according to data from the central bank.
The private banks saw their deposits grow 17.56 percent, the state-owned commercial banks 13.68 percent, foreign banks 7.18 percent and the government-run specialised banks 14.81 percent.
But it was Islamic banking that saw its deposits increase the most -- by 23.03 percent -- between June 30 last year and this year.
Khondker Ibrahim Khaled, a former deputy governor of the Bangladesh Bank, said the GDP grew more than 6 percent, which brought about an increase in people's income and eventually the banks' deposits.
Zaid Bakht, research director of the Bangladesh Institute of Development Studies, said the sluggish phase of the share market is tempting people to put their money in savings instruments or banks.
“But with savings instruments, there are some limitations. So it is the banks who are the biggest beneficiaries of the stock market's depressed phase. They still provide 9 to 10 percent interest rates.”

The average interest rate on savings stood at 8.01 percent in May, down 0.60 percentage points from July last year. A high official of the central bank said the figure dipped below 8 percent in June.
Nurul Amin, managing director of Meghna Bank, echoed the same, adding that many people in rural areas have opened Tk 10 accounts taking advantage of the financial inclusion wave taking place right now.
The poor are saving in those accounts, he said, adding that banks have been opening branches in rural areas of late, which is also helping the cause.
The Meghna Bank MD said another reason for the rise in deposit is the sluggish investment scenario: many businessmen are keeping their investable fund in fixed deposits in banks.

Published: 12:00 am Tuesday, August 19, 2014

Stocks flatline after choppy trading

FE Report - 19 August'2014 Tuesday
Amid chopping trading, Dhaka stocks closed flat Monday with turnover falling slightly, but a new issue made exponential gains.

Khulna Printing & Packaging Ltd, which made debut on the day, attracted investors much as its share price jumped 271 per cent, despite controversy over its disclosure in the IPO prospectus.

The newcomer was also the most traded stock of the session with its turnover hitting Tk 514.24 million, accounting for 8.36 per cent of day's total turnover. A total of 15.20 million shares changed hands on the Dhaka Stock Exchange, the nation's prime bourse.

Each share of the company Monday traded between Tk 45 and Tk 29 on the DSE before closing at Tk 37.10 from its issue price of Tk 10.

DSEX, the prime index of the Dhaka Stock Exchange (DSE) slipped marginally by 0.37 points and ended at 4,554.14 points after witnessing see-saw throughout the session.

However, the other two indices closed positive. The DS30, comprising blue chips gained 6.64 points or 0.38 per cent to close at 1,712.56 points. The DSE Shariah Index advanced 2.32 points or 0.22 per cent to close at 1,062.77 points.

The total turnover amounted to Tk 6.15 billion, which was 2.68 per cent lower compared to previous session's value of Tk 6.32 billion.

The investors' attention was mainly focused on textile, engineering and fuel and power sectors, accounting for 15.15 per cent, 14.77 per cent and 12.07 per cent respectively of the day's total turnover.

 "Pressing down the demand side, market demonstrated marginal level of sale pressure. But the switch across and focus on selective large caps still prevailed," said IDLC Investments in an analysis.

As DSEX accumulated gains from 4,350 points level in recent times, investors started pursuing cautious stance to track market movements, said the merchant bank.

Rosy garments export outlook by the state-run Export Promotion Bureau influenced re-balancing portfolio through textiles issues, reflecting incessant interest from the investors. Textile sector performed positively with 0.16 per cent gain and led the sectoral turnover ladder, said the merchant bank.

LankaBangla Securities said: "After trading mostly higher in early session, indices have moved back to the downside on the heels of hefty profit booking over the course of the day's trading session".

Most of the major sectors have turned lower, contributing to the sharp pullback in the benchmark index, it said.

Market seems to consolidate at this level after a weeklong rally, eyeing the next move in market following to quarterly declaration of stocks," said the stock broker.

The investors' interest was captured by various individual issues early in the session. But price depreciation of large cap GP wiped out early gains, said International Leasing Securities.

Zenith Investments said: "Although, the market may have moved in a lethargic way, it is likely to shrug off the weariness soon, after the short profit taking phase is over".

All the major sectors showed negative performance in the session. Telecommunication suffered the most with 2.36 per cent loss. Pharmaceuticals, fuel and power and food and allied also went down by 0.68 per cent, 0.30 per cent and 0.37 per cent respectively.

In the financial sector -- banks and NBFIs also retraced 0.73 per cent 1.07 per cent respectively.

The losers took a modest lead over the gainers as out of 299 issues traded, 164 declined, 107 advanced and 28 remained unchanged on the DSE floor.

The trade and volume were up by 19.06 per cent and 4.7 per cent respectively. A total number of 0.148 million trades were executed with 158.65 million securities of trading volume

The total market capitalisation on DSE stood at Tk 3,041.07 billion against Tk 3,045.81 billion in the previous session.

The port city bourse, Chittagong Stock Exchange (CSE), however, ended lower with its Selective Categories Index - CSCX - lost 55.14 points to close at 8,541.13 points.

IPO approval needs overhaul, says CSE

FE Report - 19 August'2014 Tuesday
The port city bourse has said that the IPO (initial public offering) proposals should be approved based on companies' merits rather than "embellished" paper-based disclosures.

"The approval (IPO) process should be overhauled to help select companies based on solid fundamentals," chairman of the Chittagong Stock Exchange Dr Muhammad Abdul Mazid said.

Mr. Mazid, also a former chairman of the National Board of Revenue (NBR), said paper based disclosures shouldn't be only criterion while allowing companies to go public. "There should be a rigorous scrutiny process before an IPO is endorsed by the regulator. Investors and market would be benefited if the IPO proposals were screened considering the merits," he said.

His comments came Monday at a press briefing held at the CSE's Dhaka office.

Four CSE directors--Mohammed Mohiuddin, Dr. Moinul Islam Mahmud, Prof. Mamtaz Uddin Ahmed and Nasir Uddin Chowdhury-- and the CSE Managing Director Syed Sajid Husain also attended the press briefing held to discuss the current market scenario.

The CSE chairman said the IPO proposals get regulatory approval on the basis of quality of a company in other countries such as China.

"Similar IPO approval process should be introduced in our country along with bringing changes in the process of giving listing," he said.

At the press briefing, the CSE director Mohammed Mohiuddin said the port city

bourse has started the job of visiting the companies which have submitted the IPO proposals to go public.

"We have also asked the companies to make presentation on their fundamentals. Following our proposal, some companies withdrew their proposals," Mr. Mohiuddin said while responding to a question whether the exchanges play due role in ensuring the companies' due diligence.

Mr. Mazid has also made a presentation on the objectives of demutualised exchange and the impacts of recent regulatory decisions on the capital market.

"Our capital markets are fully based on institutional investors. Subsequently, the actual market movement cannot be understood unless the institutional investors become active," he said.

The CSE chief has appreciated the securities regulator for suspending the activities of an issue manager for the first time as a punitive action against submitting fake information of a company seeking regulatory approval.

He said the Bangladesh Bank's recent directive on the submission of investment related information by the banks on the daily basis has also worked as a catalyst behind the poor turnover of the capital market.

"The central bank last week also asked the financial institutions to lower single borrower's exposure limit. As a result, the investments of the financial institutions will also be reduced in the capital market," Mr. Mazid said.

He stressed the need for introduction of new products in the capital market along with enhancing investors' knowledge by arranging training and workshops.

"We're working to launch IPO Index, Shariah Index and Benchmark Index. These indices will be launched soon after we get approval from the regulator," the CSE chief added.

After holding the press briefing, the CSE board Monday also called on the policy makers of the Bangladesh Securities and Exchange Commission (BSEC) and discussed some issues including the way of bringing positive changes in IPO approval process.

Monday, August 18, 2014

Trading of the shares of Khulna Printing & Packaging Limited will commence today

Trading of the shares of Khulna Printing & Packaging Limited will commence today (August 18, 2014) at DSE under 'N' category. DSE Trading Code for Khulna Printing & Packaging Limited is "KPPL" and DSE Company Code is 19511.

(Q3): The Company has reported its profit after tax Tk. 42.50 million and basic EPS Tk. 1.61 for the 3 (three) months ended on 31 March 2014 (Jan 2014-March 2014) as against profit after tax of Tk. 27.77 million and basic EPS of Tk. 1.05 for the same period of the previous year. It is to be noted that basic EPS has been calculated based on weighted average Pre-IPO paid-up number of shares i.e. 26,400,000 shares for both periods. However, considering Post-IPO 66,400,000 number of shares the Company's basic EPS for the 3 (three) months ended on 31 March 2014 would be Tk. 0.64 For the period of 9 (nine) months (July 2013 to March 2014) ended on 31 March 2014 profit after tax was Tk. 64.89 million and basic EPS was Tk. 2.46 as against profit after tax of Tk. 52.61 million and basic EPS of Tk. 1.99 for the same period of the previous year. It is to be noted that the said EPS has been calculated based on weighted average Pre-IPO paid-up number of shares i.e. 26,400,000 shares for both periods. However, considering Post-IPO 66,400,000 number of shares, Company's basic EPS would be Tk. 0.98 for 9 (nine) months ended on 31 March 2014 (July 2013 to March 2014) and NAV per share would be Tk. 16.65 as on 31 March 2014

Source :

Sunday, August 17, 2014

DSE WEEKLY REVIEW Stocks gain for fourth week

New Age - 17 August'2014 Sunday

Dhaka stocks advanced last week, fourth week in a row, with an increased turnover as investors remained positive on an expectation that the business environment in the country might improve soon.
The key index of Dhaka Stock Exchange, DSEX, finished at 4,554.51 points on Thursday, last trading day of the week, adding 1.52 per cent or 68.31 points over the week.
The daily average turnover of the bourse in last week increased to Tk 672.20 crore, up by 23.53 per cent from the previous week’s Tk 544.17 crore.
Market operators said that the key index of the bourse was negative for a single trading session in the week as a section of investors opted to take some profit on the day after the recent bull run at the market.
The market remained positive in the remaining sessions of last week as investors were expecting an improved business situation amid calm political situation for few weeks, they said.
Operators said improved corporate declarations by the listed companies and mutual funds also kept investors active on the trading floor.
Declining banks’ deposit rate also made investors optimistic that the fund flow from the banking sector to the capital market might increase, they said.
Large capitalised companies played an important role to keep the market afloat despite decline in most of the traded shares, operators said.
The heavyweights cement, telecommunication and engineering sectors gained by 8.60 per cent, 6.08 per cent and 4.41 per cent respectively in the week.
Of the 306 shares and mutual funds traded in the week, 128 advanced, 164 declined and 14 remained unchanged.
DS30, the blue-chip index of the bourse, rose by 3.22 per cent, or 53.22 points, to close at 1,705.93 points in the week.
The Shariah index of the DSE, DSES, closed at 1,060.44 points, increasing by 3.33 per cent or 34.17 points.
‘Investors were highly active in hunting momentum-driven return and again they were reallocating their positions,’ IDLC Investments said in its weekly market commentary.
As a number of companies demonstrated better performance at the same time mutual funds’ corporate declarations are on board, fund managers and general investors continued tracking market dynamics, it said.
‘In the meantime, stable macroeconomic indicators amid calm political scenario kept a positive psychological impact, strengthening investors’ confidence level,’ it said.
MJL Bangladesh led the turnover leaders in the week with its shares worth Tk 220.14 crore changing hands.
Grameenphone, Square Pharma, Active Fine Chemicals, Lafarge Surma Cement, Appollo Ispat Complex, Beximco, Hwa Well Textiles, ACI and Bangladesh Submarine Cable Company were among the other turnover leaders in the week.
Summit Purbanchol Power Company gained the most with a 22.20-per cent increase in its share price, while Sixth ICB Mutual Fund lost the most, shedding 19.26 per cent.

LR GLOBAL’S BANK TRANSACTIONS - BSEC probe body gets some powers of civil court

New Age - 17 August'2014 Sunday

HM Murtuza
The Bangladesh Securities and Exchange Commission has empowered a committee, formed to investigate LR Global Bangladesh Asset Management Company’s suspicious bank transactions, with some powers of a civil court.
The powers include enforcing the attendance of a person and examining him on oath, compelling the producing of documents and issuing commissions for the examination of witnesses.
The commission made the decision on August 12 as the two-member probe committee made little progress in its 30-working day timeframe.
The commission meeting, headed by its chairman M Khairul Hossain, decided for the empowerment of the committee in accordance with Section 21(4) of the Securities and Exchange Ordinance, 1969 and extended the time-frame by 20 more workings days.
The Section 21(4) stipulates, ‘The person holding an enquiry under sub-section (1) shall, for the purpose of such enquiry have the same powers as are vested in a court under the Code of Civil Procedure, 1908, when trying a suit, in respect of the following matters, namely — (a) enforcing the attendance of a person and examining him on oath or affirmation; (b) compelling the production of documents; (c) issuing commissions for the examination of witnesses; and any proceedings before such person shall be deemed to be ‘judicial proceeding’ within the meaning of sections 193 and 228 of the Penal Code.’
LR Global operates several bank accounts for managing funds under its management with the aim of getting increased interest. It has frequently transferred fund from one bank to another before the stipulated date for getting benefit without any reason, a commission report said.
Due to the frequent transactions, most of the mutual funds are being deprived of interest income, it said.
The commission in June formed the two-member probe committee on as the commission found suspicious bank transactions by LR Global.
Earlier, the committee was formed under the Securities and Exchange Commission (Mutual Fund) Rules, 2001.
LR Global manages six mutual funds worth Tk 892 crore — DBH First Mutual Fund of Tk 120 crore, Green Delta Mutual Fund of Tk 150 crore, AIBL First Islamic Mutual Fund of Tk 100 crore, MBL First Mutual Fund of Tk 100 crore, LR Global Bangladesh Mutual Fund One of Tk 321 crore and NCCBL Mutual Fund-1 of Tk 110 crore — all of whom were listed with the capital market.
The commission is also investigating a number of allegations of anomalies of LR Global including investment of Tk 46.39 crore in non-listed companies from the mutual funds run by LR Global in violation of rules.