Saturday, October 25, 2014

SUSPICIOUS FUND HANDLING BSEC probe finds LR Global caused losses to MFs

New Age- 25 October'2014 Friday


HM Murtuza
A Bangladesh Securities and Exchange Commission’s probe body on LR Global Bangladesh Asset Management Company’s suspicious bank transactions has found that the frequent fund transfer from the mutual funds’ one bank account to another resulted in heavy losses for the funds.
A BSEC senior official told New Age on Thursday that the investigation report had been submitted to the commission recently.
The official said, ‘The investigation committee on LR Global has established that the fund transfer from the mutual funds’ one bank
account to another account hampered the profitability of the funds managed by the asset management company.’
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 the funds are listed with the capital market.
The commission is also investigating a number of allegations of anomalies by 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.
‘In most of the cases, LR withdrew funds from a certain bank account of the mutual funds
before it became matured to get benefit or interest,’ the BSEC official said.
‘The motive is now clear that the fund transfer was conducted not to make the funds profitable rather than to fulfil any other intention,’ he said.
The probe committee report also showed ten transactions, for examples, that had resulted in losses for the mutual funds operated by the AMC.
Another BSEC official said that the commission might take tough action against LR Global Bangladesh Asset Management Company based on the report.
‘Despite repeated pressure from several influential persons of the government, the commission is moving ahead to take exemplary punishment against LR Global,’ he said.
The BSEC official also believes that exemplary punishment against the asset manager may help in reducing malpractices and increasing investors’ confidence over the mutual fund sector.
The commission in June this year launched a two-member probe committee setting five terms of references for the committee.
The TORs included inspecting transactions of mutual funds’ bank accounts which were opened in reference to the BSEC mutual fund rules, legality of the transactions, legality of investments, scrutinising the reason for the frequency of transactions and any further issue related to fund transfer.
LR Global operates several bank accounts for managing funds under its management with the aim of getting increased interest.
It frequently transferred fund from one bank to another before the stipulated date for getting
benefit without any reason, a BSEC initial report on LR Global had said.
Due to the frequent transactions, most of the mutual funds were deprived of interest income, it said.

 

HM Murtuza
A Bangladesh Securities and Exchange Commission’s probe body on LR Global Bangladesh Asset Management Company’s suspicious bank transactions has found that the frequent fund transfer from the mutual funds’ one bank account to another resulted in heavy losses for the funds.
A BSEC senior official told New Age on Thursday that the investigation report had been submitted to the commission recently.
The official said, ‘The investigation committee on LR Global has established that the fund transfer from the mutual funds’ one bank
account to another account hampered the profitability of the funds managed by the asset management company.’
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 the funds are listed with the capital market.
The commission is also investigating a number of allegations of anomalies by 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.
‘In most of the cases, LR withdrew funds from a certain bank account of the mutual funds
before it became matured to get benefit or interest,’ the BSEC official said.
‘The motive is now clear that the fund transfer was conducted not to make the funds profitable rather than to fulfil any other intention,’ he said.
The probe committee report also showed ten transactions, for examples, that had resulted in losses for the mutual funds operated by the AMC.
Another BSEC official said that the commission might take tough action against LR Global Bangladesh Asset Management Company based on the report.
‘Despite repeated pressure from several influential persons of the government, the commission is moving ahead to take exemplary punishment against LR Global,’ he said.
The BSEC official also believes that exemplary punishment against the asset manager may help in reducing malpractices and increasing investors’ confidence over the mutual fund sector.
The commission in June this year launched a two-member probe committee setting five terms of references for the committee.
The TORs included inspecting transactions of mutual funds’ bank accounts which were opened in reference to the BSEC mutual fund rules, legality of the transactions, legality of investments, scrutinising the reason for the frequency of transactions and any further issue related to fund transfer.
LR Global operates several bank accounts for managing funds under its management with the aim of getting increased interest.
It frequently transferred fund from one bank to another before the stipulated date for getting
benefit without any reason, a BSEC initial report on LR Global had said.
Due to the frequent transactions, most of the mutual funds were deprived of interest income, it said.
- See more at: http://newagebd.net/60544/bsec-probe-finds-lr-global-caused-losses-to-mfs/#sthash.JoZGlufn.dpuf

Turnover dips below Tk 6.0 billion-mark

FE Report - 24 October'2014 Friday
Stocks edged lower for the second running session Thursday with turnover dipping below Tk 6.0 billion-mark on the prime bourse as most of the investors followed 'wait-and-see' approach.

DSEX, the prime index of the Dhaka Stock Exchange (DSE) went down further by 16.04 points or 0.31 per cent to close at 5,154.10 points after witnessing volatility throughout the session.

The other two indices also closed in the red. The DS30, comprising blue chips lost 5.32 points or 0.27 per cent to close at 1,943.67 points. The DSE Shariah Index shed 4.30 points or 0.35 per cent to close at 1,216.23 points.

Trading at DSE remained sluggish posting the lowest turnover in last six weeks. The total turnover amounted to Tk 5.72 billion which was 20.77 per cent lower compared to previous session's value of Tk 7.22 billion.

The investors' attention was mostly concentrated on power, engineering and pharma - the sectors that accounted for 28 per cent, 12 per cent and 10 per cent respectively of the day's total turnover.

"The market endured a bearish session amidst the investors' indecisive attitude due to the gradual decline in overall investors' participation," said International Leasing Securities.

Outstanding quarterly earnings declarations from few industry leading stocks failed to create any kind of enthusiasm among the investors as most of them are waiting the market to turn bullish, said the International Leasing.

"The investors were still shaky about market movement and waiting for perfect confirmation of trend reversal," said IDLC Investments, in its regular market analysis.

They were highly focusing on upcoming earnings disclosures and started pursuing 'wait and see' approach, said the merchant bank.

"Market once again got drenched in red, although a range of bound movement was witnessed during the mid-afternoon trade hour," said Zenith Investments.

It is apparent that the sidewalk may continue for few more days before market decides whether to get back to its usual up trend or take a new route to head downwards, said the Zenith analysis.

"Since our market is positively correlated, therefore, strong positive news of some stocks fails to create much impact as it should," said the Zenith Investments. 

Among the major sectors, banks and pharmaceuticals edged down by 0.52 per cent and 0.07 per cent respectively. NBFIs posted the highest gain of the session of 2.31 per cent.

Telecommunication, food and allied also yield decent gains of 1.0 per cent and 0.54 per cent respectively. Fuel and power closed higher with 0.13 per cent gain.

Banks largely robust to shocks

Daily Star - 24 October'2014 Friday
Rejaul Karim Byron
Most of the banks have sufficient capital buffer to absorb adverse shocks and still maintain the sector's overall capital adequacy ratio (CAR) above the minimum requirement, the central bank's most recent stress tests found.
The exercise, conducted by the Financial Stability Department on data from the April-June quarter of this year, looked at the impact of different stressed situations on banks' capital.
The minimum capital requirement for scheduled banks is the greater of the two: 10 percent of risk-weighted assets or Tk 400 crore.
At the end of June, the sector's CAR stood at 10.68 percent, above the minimum regulatory requirement of 10 percent.
The tests found that if each of the banks' top three borrowers defaults, the banking sector CAR may drop 2.69 percent. Individually, one state-owned commercial bank, 18 private commercial banks and four Islamic banks' CAR will fall below 10 percent due to this shock.
If 3 percent of the highest sectoral loans become default, the banking sector CAR may slip 0.07 percent, but it would still be above the minimum requirement.
Likewise, in the scenarios of negative shifting of classified loans, the banking sector CAR may fall 0.53 percent but would still be above the 10 percent floor.
Individually, two state banks, four private banks and one Islamic bank will see their CARs fall below 10 percent due to the shock.
If the forced sale value of collateral is lowered by 10 percent, the banking sector CAR may be decreased by 0.43 percent, but it would still be above the 10 percent threshold. One state-owned commercial, two private and one Islamic banks' CARs will fall below 10 percent.
A 3 percent increase of non-performing loans may decrease the sectoral CAR by 0.72 percent, the tests found. One state-owned commercial, seven private and two Islamic banks' CARs will go below the minimum regulatory requirement.
If the market interest rate changed by 1 percent, the banking sector CAR may slip 0.02 percent and take the CARs of two state-owned and nine private banks below the 10 percent floor.
A change in market exchange rate by 5 percent will lower the sector's CAR by 0.03 percent, but none of the bank's CAR will go below the threshold.
If the price of the equities that the banks hold drops by 10 percent, the banking sector CAR may decrease 0.35 percent. Individually, two state-owned commercial, one private and one Islamic banks' CARs will go below the threshold.
“The stress tests based on June 2014 data exhibit that the banking sector remains resilient to adverse scenarios,” Md Anwarul Islam, deputy general manager of Bangladesh Bank's Financial Stability Department, told The Daily Star.
Zahid Hussain, lead economist of the World Bank's Dhaka office said the results of the stress tests were reassuring.
However, most of the tests have experimented with adverse changes whose order of magnitude is somewhat small, he said, adding that it would be useful to examine what magnitude of adverse changes would put the system at risk of major insolvency from a CAR point of view.
“Already, this analysis shows if loans of top three borrowers are adversely classified, 23 banks will fall below the 10 CAR threshold. So collection from the top borrowers must be put under close surveillance,” Hussain added.
Published: 12:00 am Friday, October 24, 2014
 

Thursday, October 23, 2014

Stocks slump on disappointing Q3 report of 2 companies

New Age - 23 October'2014 Thursday


Dhaka stocks declined sharply on Wednesday after increasing in the previous trading session as the unexpected profit fall in two companies under the bank and cement sector made investors dissatisfied.
The key index of Dhaka Stock Exchange, DSEX, declined to 5,170.15 points, shedding 1.21 per cent or 63.66 points.
Market operators said that investors dissatisfied by the quarterly earning of a bank and cement company— Al-Arafah Islami Bank and Heidelberg Cement— sold shares in an apprehension that the profit of other companies of those sectors might go through the same pattern.
Al-Arafah Islami Bank made Tk 22.68 crore loses in the July to September quarter against its profit of Tk 62.65 crore in the same period in the previous year.
While for Heidelberg Cement, a multinational company, profit declined to Tk 19.55 crore in July to September quarter compared with its profit of Tk 37.39 crore in the same period of the previous year.
Banking and Cement sectors were down by 1.5 per cent and 1 per cent respectively on the day.
Along with the banks and cement companies, share prices of multinational companies also declined as investors were apprehending the earning fall of such companies, operators said.
Besides, World Bank’s Tuesday’s comment on stock market was among other reasons behind investors increased share selling, they said.
DS30, the blue-chip index of the bourse, fell by 1.16 per cent, or 23.05 points, to close at 1,948.99 points on Wednesday.
The Shariah index of DSE, DSES, declined to 1,220.54 points, shedding 1.04 per cent or 12.94 points.
Turnover of the bourse, however, increased to Tk 722.55 crore on the day compared with that of Tk 694.23 crore in the prvious trading session.
Of the 302 shares and mutual funds traded on the day, 76 advanced, 205 declined and 21 remained unchanged.
‘On Wednesday, the benchmark index lost 63.67 points as investors remained cautious about Q3 corporate earnings,’ LankaBangla Securities said in its daily market analysis.
‘Unexpected fall in earnings of a bank and a cement company might have taken a toll on the market,’ it said.
‘Investors remained cautious on the day and selling pressure was observed throughout the trading session,’ LankaBangla said.
‘Equity market continued absorbing natural sell pressure, shrinking all the indices,’ IDLC Investments said in its daily market commentary.
‘Besides, investors continued re-balancing their portfolio on the expectation of upcoming quarterly earnings,’ said IDLC.
RSRM Steel Re-rolling Mills led the turnover chart as its shares worth Tk 41.82 crore changed hands.
Khulna Power Company, MJL Bangladesh, Titas Gas, Square Pharmaceuticals, Heidelberg Cement, Beximco Pharma, Grameenphone, BEXIMCO and Golden Son were among other turnover leaders.
Shahjibazar Power Company gained the most as its share prices rose by 9.91 per cent, while Appollo Ispat Complex lost the most, shedding 9.76 per cent.

 

Pubali Bank Securities launches trading at CSE

FE Report - 23 October'2014 Thursday
Pubali Bank Securities Limited formally launched the trading at Chittagong Stock Exchange (CSE) from Wednesday, said a press release.

Chairman of the board of directors of the bank Hafiz Ahmed Mazumder was present on the occasion as the chief guest and inaugurated the trading. Bank's Managing Director & Chief Executive Officer Helal Ahmed Chowdhury and Director of Pubali Bank Securities Ltd and Rana Laila Hafiz, Director of Pubali Bank Securities Ltd were present as the special guests at the launching ceremony.

Additional Managing Director MA Halim Chowdhury, Deputy Managing Director Safiul Alam Khan Chowdhury and Chief Financial Officer (CFO) of Pubali Bank Ltd Sayeed Ahmed FCA were present as guests. Mohiuddin Ahmed, Managing Director & Chief Executive Officer of Pubali Bank Securities Ltd presided over the function.

Investors go for quick profit

FE Report - 23 October'2014 Thursday
Stocks stumbled again Wednesday after previous session's upsurge as investors remained cautious about third quarter corporate earnings and went for quick profit.

DSEX, the prime index of the Dhaka Stock Exchange (DSE) dipped below 5,200-mark once again, shedding 63.66 points or 1.21 per cent to close at 5,170.15 points after four hours trading.

The other two indices also closed lower. The DS30, comprising blue chips lost 23.05 points or 1.16 per cent to close at 1,948.99 points. The DSE Shariah Index shed 12.94 points or 1.04 per cent to close at 1,220.54 points.

Turnover at DSE crossed Tk 7.0 billion-mark after hovering around Tk 6.0 billion in the last three sessions. The total turnover stood at Tk 7.22 billion, registering an increase of 4.08 per cent over the previous day's value of Tk 6.94 billion.

The investors' attention mostly concentrated on power, engineering and pharma - the sectors that accounted for 19.34 per cent, 15.67 per cent and 12.36 per cent respectively of the day's total turnover.

CSE ITF begins - FRA bill to be placed in next JS session

FE Report - 23 October'2014 Thursday
The country's capital markets are awaiting a 'take off period' because of investors' confidence restored in last two years.

The chairman of Bangladesh Securities and Exchange Commission (BSEC) Prof M Khairul Hossain Wednesday said this at the inauguration ceremony of Internet Trade Fair (ITF) organised by Chittagong Stock Exchange (CSE).

 "Capital market showed stable behaviour in last two years as investors' confidence restored. The market is awaiting a take off period," Mr. Khairul said as special gust of the ceremony.

The first ever ITF arranged by port city bourse started Wednesday at the Institute of Diploma Engineers Auditorium and will end on Thursday (today).

M. A. Mannan MP, state minister for finance and planning, inaugurated the trade fair by executing a dummy buy order of one hundred shares of a listed company.

Mr. Mannan said the bill of proposed Financial Reporting Act (FRA) will be placed in the parliament in next session.

 "The government wants to ensure it that everyone will abide by the rules and regulations of the capital market. The government does not want interfere in the capital market other than the implementation of rules and regulations," Mannan said.

In his speech the BSEC chairman said the securities regulator has achieved self dependency in terms of man power, infrastructure and financial solvency.

 "Internet trading service should un-interrupted. The demand of opening branches of brokerage firms will be reduced if the internet trading service gets popularity," BSEC chairman Khairul said.

CSE chairman Dr. Muhammad Abdul Mazid said capital markets are playing important roles in the country's successive development.

He said time to time reforms will be needed to facilitate non-resident Bangladeshis (NRBs) willing to execute share trading through internet.

CSE managing director Syed Sajid Husain said in course of time investors may not need to go to brokerage houses as their trading will be executed through internet trading service.

DSE managing director Dr. Swapan Jumar Bala, ICB managing director Md. Fayekuzzaman and the top officials of different banks and financial institutions attended the ITF opening ceremony.

mufazzal.fe@gmail.com

Banks' 1/3 default loans stuck in trade-financing - Greater flow of fund due to lower demand from manufacturing

FE Report - 23 October'2014 Thursday
Siddique Islam

 Banks' 1/3 default loans stuck in trade-financing
Almost one-third of the total default loans are now stuck in trade-financing and banks are in deep trouble with their recovery. 

The trade-financing covers credits for export and import, apparel and clothing and loan against trust receipt (LTR).

More than 32 per cent or Tk 131.20 billion of the total Tk 406.4 billion non-performing loans (NPL) were concentrated in trade-financing sectors in 2013, according to the central bank statistics.

Officials at the Bangladesh Bank (BB) have, however, identified such concentration as 'moderate'. It is quite distant from the upper limit for moderate concentration, they say. But concentration of loans is higher in the case of business groups than that of sector-wise loans.

 "Around 40 per cent of outstanding loans are held by 30 to 40 business groups in Bangladesh," a BB senior official told the FE.

He made the disclosure in reply to a query about the existing trends in loan concentration into few pockets of the financial sector.

The BB official said some business groups are also involved in the banking business that has heightened the level of risks in trade-financing.

 "Default-loan concentration in trade financing increased because of large-scale financial irregularities, such as in Hall-Mark and Bismilla Groups, alongside price fluctuations of commodities in local and global markets," the central banker explained.

The highest level of default loan concentration has taken place in the readymade garment (RMG) and textile sectors, standing at 16.70 per cent in 2013.

It was followed by 7.2 per cent and 3.5 per cent respectively in import loans and export credits, the BB data showed.

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

Country's senior bankers suggested the authorities concerned should take effective measures to curb such loan concentration immediately.

This is seen by them as an imperative for ensuing stability in the baking system.

They also sought cooperation from the country's business community for improving financial health of the banks through reducing the volume of NPL.

 "It's not a good sign for the banking system. It should be addressed immediately to ensure stability in the sector," S.M. Aminur Rahman, advisor of the Union Bank Limited, told the FE.

Regarding the LTR, Mr. Rahman, also former chief executive officer (CEO) and managing director (MD) of the state-owned Janata Bank Limited, said such loan should be monitored strongly by individual banks as per terms of conditions.

Talking to the FE correspondent, Nurul Amin, CEO and MD of Meghna Bank Limited, said the flow of credit increased to the trade-financing sectors recently because of the lower demand for loans from the real or manufacturing sectors.

 "Actually, most of banks have invested their funds in trade financing to meet the growing demand from the businessmen," Mr. Amin, also former chairman of the Association of Bankers, Bangladesh (ABB), said to explain how the financing priority shifted.

Helal Ahmed Chowdhury, CEO and MD of Pubali Bank Limited, urged the businessmen and bankers to take necessary measures to downsize the volume of NPL to keep the stability in banking system continuing.

The senior bankers' appeal came against the backdrop of upturn in the NPL in the banking sector in the second quarter of the current calendar year.

The volume of default loans increased 6.58 per cent to Tk 513.44 billion as of the April-June period of 2014 from Tk 481.72 billion in the previous quarter.

During the second quarter, the share of NPL in the total outstanding loans from the banking system rose to 10.75 per cent from 10.45 per cent in the January-March period of 2014.

 "We need a sound banking system for achieving optimum economic growth," said Mr. Chowdhury, also vice-chairman of the ABB.

Meanwhile, the LTR has been identified as more risk-prone item under the trade-financing areas--and the possibility of recovering such loans is apparently very low.

 "We see that the possibility of recovering such loans is apparently very low due mainly to the lack of adequate mortgage and fluctuation of prices of unsold goods," another BB official observed.

Total LTR stood at Tk 379.6 billion in 2013, which was 8.1 per cent of total outstanding amount in the banking system. Of the amount, Tk 19.6 billion turned classified as the money was not repaid timely.

Opening letter of credit (LC) for essential commodities, industrial items and trading purposes and getting loan against such LC is called LTR.

The loan against a trust receipt is provided to a client when the documents covering an import shipment are given without payment.

Under this system, the clients hold their sales proceeds in trust for the bank, until the loan allowed against the trust receipt is fully paid.

Talking to the FE, a senior executive of a leading private commercial bank (PCB) said a major portion of the LTR was from the country's port city, Chittagong, where commodity traders took the loans from different banks for a short period.

 "But later they failed to pay the loans in time, and at one stage those LTRs converted into term loans," he noted.

The private banker also said the top management of most banks are visiting Chittagong frequently for strengthening their drives for recovery of the piled-up bad loans.

The central bank is conducting a survey to gauge the extent of LTR given by the banks against LCs and identify malpractices involvrf in it.

One kind of evil competition has been observed among different bank branches in case of LC opening and providing LTR facilities against large groups in order to meet their profit target at the branch level, according to preliminary findings of the survey.

It also says sometimes bank branches open LC and provide LTR facility as instructed by banks' head offices.

Such directed lending creates a problem for branch managers in making assessment of their clients. As a result, the LTR is not adjusted and gets defaulted at one stage.

The survey team found out that the large importers (mostly defaulters) are taking stay order from courts. As a result, they get clean Credit Information Bureau (CIB) report to be eligible for further trade financing.

 "This is a big obstacle to the recovery of LTR and term loan in the banking sector," a survey team member told the FE about tangles.

He also said that the team is working to finalise the survey report by November.

siddique.islam@gmail.com

Wednesday, October 22, 2014

CSE INTERNET TRADE FAIR


Dhaka stocks bounce back after 3 days

New Age  - 22 October'2014 Wednesday
Dhaka stocks bounced back on Tuesday with increased turnover as investors opted to purchase shares in cheap considering last three trading sessions’ freefall amid support from some state-owned entities.
The key index of the Dhaka Stock Exchange, DSEX, rose by 1.73 per cent, or 89.31 points, to increase at 5,233.82 points.
Market operators said the investors who were pessimistic for the last couple of trading sessions might have opted to purchase shares in cheap considering the last few trading sessions’ sharp fall.
The DSEX in the last six trading sessions declined by 189 points due to rumors on central bank’s increased monitoring over the capital market, big investors’ increased share selling and panic-driven share sell-offs by retail investors.
The market operators also said some state-owned entities might have increased their participation on the trading floor on Tuesday to tackle further fall in share prices and to make investors hopeful about the market prospects.
The shariah index of the bourse, DSES, increased by 2.10 per cent, or 26.15 points, to close at 1,233.48 points on the day.
Turnover of DSE increased to Tk 694.23 crore compared with that of Tk 596.95 crore in the previous trading session.
Of the 301 shares and mutual funds traded on the day, 227 advanced, 41 declined and 33 remained unchanged.
‘Breaking last three sessions’ pessimism, market bounced back today amid improved activity,’ IDLC Investments said in its daily market commentary on Tuesday.
‘Turnover reached Tk 694 crore by the end of the session which was 16.30 per cent higher in comparison to the previous session,’ it said.
‘Investors continued to remain active in fuel and power sector which captured 21.5 per cent of the day’s trade,’ said IDLC.
‘Among the major sectoral movement, banking sector gained 1.4 per cent, while cement, fuel and power and pharma stocks gained 3.4 per cent, 1.8 per cent and 2.2 per cent respectively,’ LankaBangla Securities said in its daily market analysis.
DS30, the blue-chip of the bourse, increased at 1,972.04 points, adding 2 per cent or 38.77 points.
MJL Bangladesh led the turnover chart as its shares worth Tk 32.45 crore changed hands.
Khulna Power Company, Square Pharmaceuticals, Grameenphone, RSRM Steels, Titas Gas, IDLC Finance, Beximco Pharma, City Bank and Lafarge Surma Cement were among other turnover leaders.
FAR Chemicals gained the most on the day as its share prices rose by 10 per cent, while EBL NRB Mutual Fund lost the most, shedding 9.85 per cent. - See more at: http://newagebd.net/59722/dhaka-stocks-bounce-back-after-3-days/#sthash.oLEtBx9M.dpuf


Dhaka stocks bounced back on Tuesday with increased turnover as investors opted to purchase shares in cheap considering last three trading sessions’ freefall amid support from some state-owned entities.
The key index of the Dhaka Stock Exchange, DSEX, rose by 1.73 per cent, or 89.31 points, to increase at 5,233.82 points.
Market operators said the investors who were pessimistic for the last couple of trading sessions might have opted to purchase shares in cheap considering the last few trading sessions’ sharp fall.
The DSEX in the last six trading sessions declined by 189 points due to rumors on central bank’s increased monitoring over the capital market, big investors’ increased share selling and panic-driven share sell-offs by retail investors.
The market operators also said some state-owned entities might have increased their participation on the trading floor on Tuesday to tackle further fall in share prices and to make investors hopeful about the market prospects.
The shariah index of the bourse, DSES, increased by 2.10 per cent, or 26.15 points, to close at 1,233.48 points on the day.
Turnover of DSE increased to Tk 694.23 crore compared with that of Tk 596.95 crore in the previous trading session.
Of the 301 shares and mutual funds traded on the day, 227 advanced, 41 declined and 33 remained unchanged.
‘Breaking last three sessions’ pessimism, market bounced back today amid improved activity,’ IDLC Investments said in its daily market commentary on Tuesday.
‘Turnover reached Tk 694 crore by the end of the session which was 16.30 per cent higher in comparison to the previous session,’ it said.
‘Investors continued to remain active in fuel and power sector which captured 21.5 per cent of the day’s trade,’ said IDLC.
‘Among the major sectoral movement, banking sector gained 1.4 per cent, while cement, fuel and power and pharma stocks gained 3.4 per cent, 1.8 per cent and 2.2 per cent respectively,’ LankaBangla Securities said in its daily market analysis.
DS30, the blue-chip of the bourse, increased at 1,972.04 points, adding 2 per cent or 38.77 points.
MJL Bangladesh led the turnover chart as its shares worth Tk 32.45 crore changed hands.
Khulna Power Company, Square Pharmaceuticals, Grameenphone, RSRM Steels, Titas Gas, IDLC Finance, Beximco Pharma, City Bank and Lafarge Surma Cement were among other turnover leaders.
FAR Chemicals gained the most on the day as its share prices rose by 10 per cent, while EBL NRB Mutual Fund lost the most, shedding 9.85 per cent.

 

Shahjibazar’s surge continues

New Age  - 22 October'2014 Wednesday
The share prices of Shahjibazar Power Company hit the roof for the second trading session on Tuesday after the trading of the shares of the company resumed at the Dhaka Stock Exchange on Monday after a trade suspension since August 11 this year.
The company’s share prices surged despite the trade suspension and a downward revision of the net profit of the company by the Bangladesh Securities and Exchange Commission following a finding that the company inflated its net profit.
Shahjibazar’s share prices rose by 9.99 per cent or Tk 9.80 to close at Tk 107.90 on Tuesday.
As per the DSE data, 47,200 shares of Shahjibazar worth Tk 50.92 lakh changed hands on the day.
On Monday, Shahjibazar’s share prices rose by 9.98 per cent to Tk 98.10 from its last closing price of Tk 89.20 before the trade suspension.
Market operators said that the share prices of Shahjibazar continued to rise despite the BSEC investigation and downward revision of its profit as there was a rumour that the price of the scrip would rise further.
Manipulators were also playing a major role behind the abnormal rise in the share price of the company, they said.
The unusual price hike also refers that stocks manipulators are not afraid of any step of the BSEC as the share price of the company is still on the rise, operators said.
Following a special audit, the BSEC found that Shahjibazar Power Company inflated its net profit by Tk 11.68 crore in its financial statement for the July 2013-March 2014 period.
The capital market regulator as per the investigation also decided to take action against Shahjibazar for its failure in disseminating correct information in the quarterly report, a Dhaka Stock Exchange web post published on Monday said.
Following the special audit, the BSEC revised the Shahjibazar’s net profit after tax to Tk 16.86 crore and earning per share to Tk 1.48 for the nine months.
Shahjibazar earlier in its quarterly financial statement for the period of July 2013 to March 2014 declared a net profit after tax of Tk 28.54 crore and EPS of Tk 2.50.
The share price of the company increased to Tk 89.20 on August 11 from Tk 36.5 on July 15 this year when the company made its debut on the DSE.
In September this year, the BSEC decided to conduct the special audit on Shahjibazar’s financial report and appointed A Qasem and Company for examining the third quarterly financial statements disclosed by Shahjibazar.
Following the audit, Shahjibazar’s consolidated net profit after tax and EPS for January-March 2014 were revised to Tk 16.67 crore and Tk 1.46 respectively from Tk 16.87 crore and Tk 1.48.
The commission also revised its consolidated net profit after tax and EPS from Tk 9.04 crore and Tk 0.79 to Tk 8.88 crore and Tk 0.78 respectively for the same period of the previous year. - See more at: http://newagebd.net/59739/shahjibazars-surge-continues/#sthash.u2LLzRUg.dpuf


The share prices of Shahjibazar Power Company hit the roof for the second trading session on Tuesday after the trading of the shares of the company resumed at the Dhaka Stock Exchange on Monday after a trade suspension since August 11 this year.
The company’s share prices surged despite the trade suspension and a downward revision of the net profit of the company by the Bangladesh Securities and Exchange Commission following a finding that the company inflated its net profit.
Shahjibazar’s share prices rose by 9.99 per cent or Tk 9.80 to close at Tk 107.90 on Tuesday.
As per the DSE data, 47,200 shares of Shahjibazar worth Tk 50.92 lakh changed hands on the day.
On Monday, Shahjibazar’s share prices rose by 9.98 per cent to Tk 98.10 from its last closing price of Tk 89.20 before the trade suspension.
Market operators said that the share prices of Shahjibazar continued to rise despite the BSEC investigation and downward revision of its profit as there was a rumour that the price of the scrip would rise further.
Manipulators were also playing a major role behind the abnormal rise in the share price of the company, they said.
The unusual price hike also refers that stocks manipulators are not afraid of any step of the BSEC as the share price of the company is still on the rise, operators said.
Following a special audit, the BSEC found that Shahjibazar Power Company inflated its net profit by Tk 11.68 crore in its financial statement for the July 2013-March 2014 period.
The capital market regulator as per the investigation also decided to take action against Shahjibazar for its failure in disseminating correct information in the quarterly report, a Dhaka Stock Exchange web post published on Monday said.
Following the special audit, the BSEC revised the Shahjibazar’s net profit after tax to Tk 16.86 crore and earning per share to Tk 1.48 for the nine months.
Shahjibazar earlier in its quarterly financial statement for the period of July 2013 to March 2014 declared a net profit after tax of Tk 28.54 crore and EPS of Tk 2.50.
The share price of the company increased to Tk 89.20 on August 11 from Tk 36.5 on July 15 this year when the company made its debut on the DSE.
In September this year, the BSEC decided to conduct the special audit on Shahjibazar’s financial report and appointed A Qasem and Company for examining the third quarterly financial statements disclosed by Shahjibazar.
Following the audit, Shahjibazar’s consolidated net profit after tax and EPS for January-March 2014 were revised to Tk 16.67 crore and Tk 1.46 respectively from Tk 16.87 crore and Tk 1.48.
The commission also revised its consolidated net profit after tax and EPS from Tk 9.04 crore and Tk 0.79 to Tk 8.88 crore and Tk 0.78 respectively for the same period of the previous year.