The post Dhaka stocks end flat in choppy trading appeared first on Dhaka Mirror.
]]>DGEN, the benchmark general index of Dhaka Stock Exchange, lost 0.003 per cent, or 0.12 points, to close at 4,092.16 points.
The DGEN had gained 52.41 points on Monday after losing 245 points in the previous five sessions.
Turnover of the bourse increased to Tk 259.83 crore on Tuesday from that of Tk 239.08 crore a day before.
Market operators said some institutional investors became active on Tuesday.
They said the institutional investors became hopeful that the Bangladesh Bank might change its monetary policy from the second half of the current fiscal as inflation rate in July dropped.
The central bank maintained a contractionary monetary policy for July-December 2012.
Among the major sectors, power gained 0.88 per cent on Tuesday, followed by telecommunications that gained 0.52 per cent.
Pharmaceuticals declined 0.01 per cent, banks 0.56 per cent and non-bank financial institutions lost 0.84 per cent.
Of the 270 issues traded on the day, 135 advanced, 106 declined, and 29 remained unchanged.
Bangladesh Submarine Cable Company topped the turnover leader’s chart with its shares worth Tk 22.28 crore changing hands.
The other turnover leaders were RN Spinning Mills, Jamuna Oil, Keya Cosmetics, Meghna Petroleum, Saiham Cotton Mills, Titas Gas, Grameenphone, Unique Hotel and MI Cement.
-With New Age input
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]]>The post ADB offers $215m for stockmarket reforms appeared first on Dhaka Mirror.
]]>The government will have to form a special tribunal to deal with capital market related cases, in line with the conditions the Asian Development Bank has attached to a $215 million credit offer for Bangladesh.
The government will also have to limit banks’ exposure to the capital market.
The credit under the lender’s Capital Market Development Programme is accompanied by a total of 26 strings that an ADB mission put forward in a draft last month.
The Banking Division of the finance ministry has already sent the proposal to different agencies for their opinion.
Of the $215 million fund, $120 million is special fund resource and $95 million is ordinary capital resource, according to the draft.
If the government accepts the conditions, the amount will be disbursed in two equal tranches of $107.5 million each.
However, the government has requested the ADB to raise the amount to $300 million and the proposal is under a review of the lender, the draft said.
The ADB said the conditions are “to strengthen stabilisation measures of the securities markets following the history of booms and busts characterising the markets”.
Another objective is to make the capital market more effective in mobilising resource to support the economy’s financing requirement and to better promote growth and development.
The ADB said the capital market tribunal will help the stock regulator detect trading irregularities and market abuse, leading to a rise in investor confidence.
Before releasing the first tranche of the funds, an amendment to Securities and Exchange Commission Ordinance 1969 regarding the formation of the special tribunals has to be placed in parliament for passage.
And before the second tranche is released, the amended act has to be passed in parliament, according to the conditions.
Banks’ exposure to the stockmarket will not exceed 25 percent of their capital, the ADB said. Now rules permit the banks to invest up to 10 percent of their deposits in the stockmarket.
For this, the lender said, the government will have to amend the banking company act.
The amended bill should go to parliament before the first tranche is made available and the bill should get a go-ahead before the release of the second instalment.
The ADB has also attached a condition that the demutualisation act for stock exchanges has to be placed in parliament.
The ADB draft said the demutualisation would segregate ownership, management and trading rights of members and convert the two exchanges into commercial and more professionally-run organisations.
The stock exchanges will then be able to pursue their strategic interests including market development with more vigour, the lender said.
The exchanges will also be less susceptible to the members’ vested interests, it said.
A finance ministry official said they are likely to place the demutualisation act in parliament by December.
Another major condition is about the passage of financial reporting act in parliament.
Once the act gets through, the lender said, the accounting and auditing standards will be upgraded to enhance market confidence and allow for informed investment decisions.
The ADB set some other conditions related to strengthening the SEC, and to develop the bond market.
Of $215 million funds, $15 million is for market stability (for SEC’s additional staff work time, coordination committee staff time maintenance and operation cost of SEC surveillance equipment), $100 million is for market facilitation (cost of demutualisation and establishment of capital market tribunal, operation cost of financial reporting council), $5 million for supply measures, and $95 million is for demand measures.
-With The Daily Star input
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]]>Eight equity securities, six mutual funds or investment securities and a convertible bond came to the stockmarket, according to data from Dhaka Stock Exchange. The value of public offerings and pre-IPO placements was around Tk 1,250 crore.
Merchant bankers said the number of listings could have been higher this year if the book building method had not been suspended in January and if the market had remained stable all year.
The suspension of the book building method, a price discovery system, blocked many IPOs whose prospectuses were submitted in 2010 under the method, the merchant bankers said. A key responsibility of a merchant bank is to manage issues or bring new IPOs to the market.
With the book building method now modified, regulators have asked issuer companies to revise their IPO prospectuses, they said.
“The situation was different last year, when the market was in a bullish trend,” Mohammad A Hafiz, president of Bangladesh Merchant Bankers Association (BMBA). “This year, the situation was not so good, as the market maintained a bearish trend.”
After the Securities and Exchange Commission was restructured, the policy issues and many rules and regulations, including book building method, were also redesigned.
So, the companies that applied for IPO under book building method, found their entry to the market delayed, said Hafiz, also a director of AAA Consultants and Financial Advisers.
However, he said, bad days are gone, as many new companies have already applied to the commission for IPOs. “We expect a good flow of new IPOs in the coming year.”
-With The Daily Star input
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]]>The post Banks’ move fails to lift stocks appeared first on Dhaka Mirror.
]]>No efforts from the regulator and the private sector proved effective to pro up the stumbling stockmarket, which yesterday slipped again by more than 3 percent.
Owners of commercial banks, under their platform Bangladesh Association of Banks (BAB), decided on Sunday to launch a Tk 5,000 crore fund to give a financial support to the stockmarket facing a liquidity crisis.
But the move also failed to leave any long-term impact on the market.
The key index of the Dhaka Stock Exchange, DGEN, came down to 5,473 points after plummeting 180 points.
The BAB will sit with the Securities and Exchange Commission today to discuss the Tk 5,000-crore fund.
Last week, Association of Banks, Bangladesh (ABB), a platform of the chief executives of the banks, also decided in principle to make new investment in the market, within permissible limits.
Before that, a series of regulatory measures to bring back normalcy to the market was surpassed by the chronic liquidity crunch in the bourses.The regulatory measures included the reinstatement of 10 percent tax rebate facility for stock investment, withdrawal of a 10 percent tax on mutual funds income, reduction of tax at source on brokerage commission by half and formation of an advisory council.
All the initiatives left little impact on the market that witnessed only some occasional gains, analysts said.
While the bankers had promised to inject fresh money to the market, the bank owners decided to launch a market stabilisation fund, which is contradicting, they said.
If the banks can sponsor a fund then why they are not injecting the money into the market through their own portfolios, they questioned.
“The news of the formation of the mutual fund by the bankers prompted the market to fall further,” said Prof Mahmood Osman Imam, who teaches finance at Dhaka University.
“The banks should go for buying shares in their portfolios to boost the investors’ confidence,” said Osman, also a member of the index development committee of the DSE.
LankaBangla Securities, a stockbroker, in its regular market analysis said euphoria of investors started evaporating from Sunday afternoon while bankers retreated from their earlier promise.
“The investors booked profit and some went for panic sales speculating no tangible impact of the stabilisation fund,” it said.
The investors took pessimistic view after the declaration, sensing no immediate solution, the stockbroker added.
Earlier, a same nature Tk 5,000 crore Bangladesh Fund was launched to inject liquidity into the market, but the fund tangibly failed to bring liquidity and confidence.
Activities declined on the DSE yesterday with turnover, volume and trade going down by 32 percent, 31.21 percent and 2 percent respectively.
A total of 1.15 lakh trades were executed, generating a turnover of Tk 419 crore. Only 13 shares gained, while 242 declined and one remained unchanged.
-With The Daily Star input
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]]>The post Submarine Cable Company submits IPO prospectus appeared first on Dhaka Mirror.
]]>Earlier the telecom service provider planned listing through a direct listing method, but now it opts for a fixed price system. Under the revised plan, the company will float 3.10 crore ordinary shares of Tk 10 each at an offer price of Tk 35, using the fixed price method.
Previously, under the direct listing method, the offloading price of each share was supposed to be determined by institutional investors through bidding. However, the bidding process was going to use the book building method, which has been suspended now.
With instructions from the government, Securities and Exchange Commission suspended the book building method in January, following a debacle in the share market.
The listing process of the company was stalled after the book building system was suspended, said an official of Bangladesh Submarine Cable.
“After that, we were advised by our issue manager to go for an IPO using the fixed price method,” the official added.
The change in plans will also help the company financially, as it needs working capital to set up another substitute cable line to acquire bandwidth and ensure uninterrupted voice and data supplies, he said.
“If the shares were offloaded through the direct listing method, the money would go to the shareholders and the company could not use it,” the official said.
Now the funds to be raised can be used for the second cable line project, he added.
Md Monwar Hossain, managing director of Bangladesh Submarine Cable, confirmed that they submitted the IPO proposal to the SEC. They were asked to provide some necessary information to the commission.
“We will submit the additional information to the commission on Sunday,” he said.
Nasir Uddin Ahmed, chief executive officer of ICB Capital Management, the issue manager, said the existing paid-up capital of Bangladesh Submarine Cable is Tk 87.50 crore.
The net asset value per share with asset revaluation is Tk 17.56 and without asset revaluation is Tk 15.69. The existing earnings per share of the company is Tk 3.37, Ahmed added.
Formed in July 2008, Bangladesh Submarine Cable presently handles Bangladesh’s lone submarine cable — SEA-ME-WE-4 — and represents the country in the SMW-4 international cable consortium.
The existing bandwidth of the company is 44.6 Gbps. The company is upgrading its capacity to 160 Gbps that will be completed by February next year. The company is spending Tk 50 crore for its capacity upgradation.
-With The Daily Star input
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]]>The post New fund to prop up troubled stockmarket appeared first on Dhaka Mirror.
]]>AK Azad, president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), yesterday announced a concept paper on the fund after a meeting with private sector stakeholders, the stock exchanges and a group of retail investors.
“The purpose of the fund is to mitigate the financial losses of retail investors, especially those who trade on credit,” said Azad.
With a continuous downward trend, the portfolio values of the investors, who trade on margin loans, are declining; interest charges are increasing, and the situation is forcing many to forced-sale, he said.
The FBCCI will request the central bank to halt the interest charges against the margin loans for two years, so that the merchant banks cannot sell shares by force, said Azad, who presided over the meeting. The meeting aimed at finding ways to recover from the stockmarket crisis.
“We also discussed the market situation with the Banker’s Association of Bangladesh that agreed to give Tk 300 crore to the stockmarket. Bangladesh Insurance Companies Association and Bangladesh Association of Publicly Listed Companies (BAPLC) also assured us of support,” said Azad.
Salman F Rahman, president of BAPLC, said the fund will be similar to an open-ended mutual fund in nature and tradable on the secondary market.
“Initially Tk 500 crore will be given to the fund by all private banks, insurance companies, non-bank financial institutions, merchant banks, stockbrokers, listed companies and interested non-resident Bangladeshis,” he said.
Portfolios against the margin loans will be transferred to the fund on a voluntary basis by either the investors or the lender, or both. In exchange, the fund will issue units equivalent to the purchase value of the portfolio and also for the prevailing market value of the portfolio as premium, he said.
Investors who do not trade on margin loans can also get the unit transferring their portfolios to the fund, said Rahman, also vice-chairman of Beximco Group.
“It will leave an impact on the market in two ways. Firstly, since many different portfolios will be transferred into the fund in exchange for fund units, the net asset value (NAV) of the units is likely to rise,” he said.
Generally, lenders provide credit to the investors for purchasing fundamentally strong securities. The present economic situation is not such that any of them is performing poorly or near shutdown.
“Rather, our economic condition is very good with an assumption of a 7 percent GDP growth, 44 percent export growth and an increasing trend in remittance inflow,” Rahman added.
Secondly, the tendency towards selling of shares will stop. “Sell-offs are now a major problem in the market, as investors try to sell shares whenever the market sees an upward trend,” he said.
As the fund will be tradable in the stock exchanges, subject to regulatory approval, the unit holders will have scope to sell, if he or she wants, the BAPLC president said.
Rahman also said applications will be submitted to the Securities and Exchange Commission to grant a new licence for an asset management company, which will manage and operate the fund.
-With The Daily Star input
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]]>The post Stocks suffer swings, end in the red appeared first on Dhaka Mirror.
]]>The benchmark general index of Dhaka Stock Exchange, DGEN, shed 14 points or 0.22 percent to end at 6,627.
On the port city’s bourse, the selective categories index, CSCX, the main yardstick of Chittagong Stock Exchange, lost 17 points or 0.15 percent, to close at 12,208.
Stocks on the DSE suffered a steep fall in the first five minutes of the day’s trading, declining more than 50 points. However, it showed a dramatic recovery later. The indices of bourses closed negative.
Analysts attributed the market swings to price corrections.
“It is a rational behavior of the market as share prices declined for three days after gaining for a few days,” said Prof Salahuddin Ahmed Khan, who teaches finance at Dhaka University.
“It is a price correction as investors went for selling shares to make new investment into the market,” said Khan, also a former chief executive officer of DSE.
Yawer Sayeed, managing director of AIMS of Bangladesh, said shares prices declined as the investors went for profit-taking selling shares from different sectors.
He said the government’s decision to offload more shares of the listed state-owned enterprises is a very good decision, which will increase the supply of scrips into the market.
Two state-run companies Meghna Petroleum and Jamuna Oil started offloading shares onto the stockmarket yesterday. Meghna Petroleum and Jamuna Oil advanced 1.52 percent and 2.7 percent respectively, to close the day at Tk 200.7 and Tk 281.1.
The banking sector lost 1.2 percent and non-bank financial institutions were down by 1.5 percent. The telecoms sector however gained 0.29 percent, pharmaceuticals 0.89 percent and fuel and power 1.17 percent.
IDLC Finance declined 3.6 percent following its publication of half-yearly earnings, said BRAC EPL in its daily market analysis.
Of the total 263 issues traded on the DSE floor, 135 declined, 114 advanced and 14 remained unchanged.
United Airways topped the turnover chart with 11.41 lakh shares worth Tk 64.42 crore changing hands.
Sinobangla Industries was the biggest gainer of the day, posting 9.45 percent rise, while the IDLC Finance was the worst loser.
Turnover on the DSE floor stood at Tk 1,726 crore, a 2.8 percent hike over the previous day’s Tk 1,680 crore. More than 20 crore shares and mutual fund units changed hands on the country’s premier bourse.
-WIth The Daily Star input
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]]>The post Stocks buck gaining trend appeared first on Dhaka Mirror.
]]>The benchmark general index, DGEN, the yardstick of Dhaka Stock Exchange, lost 14 points, or 0.21 percent, to end the day at 6,669.
On the port city’s bourse, the selective categories index, CSCX, the indicator of Chittagong Stock Exchange, slipped 48 points, or 0.39 percent, to 12,289.
DGEN opened on a positive note and advanced 47.36 points in the first five minutes of trading but selling pressure pushed down the indices in the final hour of trade.
Prof Mahmud Osman Imam, who teaches finance at Dhaka University, said the surveillance system of bourses and Securities and Exchange Commission should be effective to prevent another bubble in the stockmarket as some shares gained non-stop.
Investors should be careful about investments in low-profile shares, said Imam, a member of the index development committee of DSE.
Lafarge Surma registered negative half-year earnings due to setbacks in production for the clinker shortage, said LankaBangla Securities, in its market analysis.
The fuel and power sector gained 1.18 percent, while banks lost 1.03 percent, non-bank financial institutions 0.27 percent and pharmaceuticals 0.05 percent.
Grameenphone, which represents the telecoms sector, declined 2.93 percent.
Of the 263 issues that traded on the DSE floor, 150 declined, 105 advanced and eight remained unchanged.
Turnover on the DSE stood at Tk 1,882 crore, down Tk 76 crore from the previous day.
-With The Daily Star input
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]]>The post Dhaka stocks gain on GP, NBFIs surge appeared first on Dhaka Mirror.
]]>The benchmark general index of Dhaka Stock Exchange, or DGEN, on the day gained 100.99 points, or 1.55 per cent, to close at 6,587.58 points.
Turnover on the bourse increased to Tk 1,387.54 crore compared to that of Tk 1,157.06 crore in the previous day.
Market operators said all 21 companies of non-bank financial sector gained big on the day as the government decided to double the capital requirement for financial institutions to Tk 100 crore from Tk 50 crore.
They said that apart one, all the bank issues also rose marginally on the day which also contributed to the gains on Tuesday.
‘As GP and MJLBD hold a significant number of shares of the total market capitalisation, sharp rise of their share prices was one of the key factors for Tuesday’s gain,’ said a stockbroker.
‘Heavy gains made by the non-banking financial institutions were another major reason for today’s market rise,’ he added.
The GP on Tuesday declared interim cash dividend of 140 per cent or Tk. 14.00 per share for the year ending on 31st December 2011. GP on the day posted a rise of Tk 18.1 or 10.22 per cent to close at Tk 195.0.
MJLBD also gained by 7.27 per cent or Tk 13.1 on the day to close at Tk 190.3.
Trading on DSE started in a positive mood and the DGEN index made a steady rise throughout the session on Tuesday.
On Sunday, the market had fallen by 91 points following a remark made by the finance minister AMA Muhith expressing his dissatisfaction over the recent bull run in the capital market. Before Sunday, the general index of DSE gained 454 points in eight consecutive sessions.
Of 261 issues traded on Tuesday, 229 advanced, 28 declined, and four remained unchanged.
GP topped the list of top-10 turnover leaders on Tuesday with its share worth Tk 75.49 changing hands. The rest in the list were Beximco, MJLBD, Shajalal Islami Bank, United Airways, MI Cements, One Bank, Goldenson, Titas Gas and United Commercial Bank.
-With New Age input
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]]>The post Stocks rise for seventh day appeared first on Dhaka Mirror.
]]>The benchmark general index of Dhaka Stock Exchange, DGEN, rose 48 points or 0.78 percent to 6,562.
On the port city’s bourse, the selective categories index of Chittagong Stock Exchange, CSCX, added 141 points or 1.20 percent, to close at 11,877.
The market started the day on a negative note but retraced to positive trend at 11:10am, gained 40 points.
The volume of trading hits a high at the country’s premier bourse as 20.83 crore shares and mutual funds changed hands yesterday.
The price earnings ratio of banking sector seemed very lucrative for long term investment, said a market insider.
The commission should work for increasing supply in the market to reduce gap between demand and supply, he added.
The surveillance system of the Securities and Exchange Commission is not adequate for finding all manipulations, said an asset manager.
It is a matter of concern that some low-profile shares are behaving abnormally without any price sensitive information, he added.
Indices gained for the last couple of sessions due to active participation of the small and institutional investors and an increased flow of money, said Green Delta Securities in a daily analysis.
Turnover on the DSE floor surged 4.3 percent to Tk 1,480 crore from the previous day’s turnover of Tk 1,419 crore.
The mutual funds sector was the biggest gainer, posting a 5.75 percent rise as the investors anticipated that most of the funds will declare a good corporate result. Among the top ten gainers, eight were mutual funds.
The banks added 1.05 percent, non-bank financial institutions 0.51 percent, telecoms 3.05 percent, pharmaceuticals 0.34 percent and fuel and power 0.77 percent.
Bextex topped the turnover leaders with 17.20 lakh shares worth Tk 66.29 crore traded.
Federal Insurance was the biggest gainer of the day, posting a 9.97 percent rise, while Meghna Life Insurance Company was the worst loser, slumping 27.29 percent.
-With The Daily Star input
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