Stocks show recovery signs

Stocks show recovery signs

Dhaka stocks showed signs of recovery from losses last week as the share prices slipped slightly in trade that bucked a back-to-back freefall for two weeks.

The market seemed to have found a resistance point and almost all the "fundamentally-driven stocks" came close to their reasonable prices, analysts said.

In the May-June period, the general index, DGEN, gained more than 20 percent. "As soon as the general index neared the 3,100 mark, the market started to fall," Equity Partners Limited (EPL), an investment firm, said in its weekly market analysis.

"The market experienced the price correction that was long expected," the EPL analysis said.

On Wednesday, the market gained more than 1.6 percent.

The benchmark index of Dhaka Stock Exchange, DSE General Index, fell 30.28 points, 1.05 percent, to 2,866.21. The DSE All Share Price declined by 23.99 points, or 0.99 percent, to 2,403.67 on Thursday, the last trading day of the week.

Market insiders said the investors had moved cautiously on the back of the central bank's recent move on the commercial banks, which have investment in the market. All the banks have been asked to submit monthly reports on their stock portfolios to the central bank.

However, the Securities and Exchange Commission assured that the central bank would not take any measure that would leave a "negative impact" on the market.

Turnover was still low, compared to the recent transaction history.

Investors have started collecting funds by saving or selling their current holdings to invest in the upcoming initial public offerings (IPOs), which is one of the reasons for current low turnover as well as the small-scale profit-taking.

Islami Life Insurance, Dacca Dyeing, EBL 1st Mutual Fund, Marico, ICB AMCL 2nd Mutual Fund and Grameenphone are going to be introduced soon.

Both the total and daily turnover declined by 26.69 percent to Tk 2,161.62 crore and Tk 432.32 crore last week.

The losers beat the advancers 144 to 95. Three securities remained unchanged. A total of 13,78,86,977 shares traded on the premier bourse, marking a 22.6 percent fall.

Market capitalisation fell 0.7 percent to Tk 1,23,574.77 crore.

Beximco topped the turnover leaders with 54,98,900 shares worth Tk 170.77 crore being traded, which was 7.9 percent of total turnover. The other turnover leaders were Bextex, Titas Gas, AB Bank, Beximco Pharma, Desco, Summit Power, Grameen Mutual Fund One: Scheme Two, AIMS 1st Mutual Fund and LankaBangla Finance.

Chittagong stocks also declined slightly. The CSE Selective Categories Index slipped 0.23 percent to 6,308.14 points. The CSE All Share Price Index slid 0.04 percent to 10,070.06 points.

A total of 2,24,56,843 shares worth Tk 271.23 crore changed hands on the Chittagong Stock Exchange. Of the traded securities, 83 advanced, 88 declined and nine remained unchanged.

AB Bank topped the turnover leaders on the port city bourse with 3,31,160 shares worth Tk 32.93 crore being traded. Other turnover leaders were Bextex, Beximco, Beximco Pharma, AIMS 1st Mutual Fund, Grameen Mutual Fund One: Scheme Two, Titas Gas, Bangladesh Online, LankaBangla Finance and Islami Bank.

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SEC sets lock-in to discipline market

SEC sets lock-in to discipline market

The stock market regulator has introduced a lock-in period barring sales of new convertible shares or shares against warrants issued by a listed company.

From now, there will be a three-year lock-in for directors or those who hold 5 percent or more shares. It means shareholders and investment companies will not be able to sell the shares they possess in a listed company within three years from the issuance of securities.

For others, Securities and Exchange Commission (SEC) has set one year as the lock-in time.

"The lock-in shall also be applicable in case of issuance of equity security against loan or debt security having no predetermined conversion feature if such equity security is not issued at a price equal to last six months' weighted average market price at the stock exchange(s)," the SEC said.

The market watchdog imposed such conditions in a gazette notification that came into effect from Sunday.

In the notification, the SEC said the commission introduced the lock-in system to protect the "interest of investors, capital and securities markets".

The lock-in will also be applicable for companies that have already received nod from the commission for issuing new shares or convertible securities, and equity shares against loan or debt security.

The SEC introduced the lock-in following media reports on a DSE investigation that a foreign investment firm had entered into a share subscription deal with a locally listed company, Bangladesh Thai Aluminium (BD Thai), without any lock-in.

Lock-in is a measure by which investment companies are barred from selling before a certain time the shares they possess.

But, taking the opportunity of absence of the lock-in, the foreign firm, GEM Global Yield Fund, bought a huge chunk of shares against warrants and dumped almost all the shares within one and a half months of acquisition. The foreign firm thus repatriated $2 million from Bangladesh capital market, according to the DSE probe report, which was submitted to the SEC for necessary actions.

Earlier the lock-in system had been in place for all companies -- both foreign and local -- to avert short-term speculative trading, and flight of capital from the market.

The two companies, BD Thai and GEM, also stroke a deal under which BD Thai intended to give shares as 'loan' or 'debt security' to GEM, and GEM could sell the loaned shares any time.

But the central bank, instead of approving the deal, put two conditions -- the share borrower must arrange a guarantee in foreign currency by a foreign bank, and receive permission from the SEC.

Another listed company, Beximco Pharmaceuticals, has inked a share subscription deal with GEM, and also received permission from the SEC to issue warrants that are convertible to shares.

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3 Z Category share company back

3 Z Category share company back

3 Z Category shares are back in the market after 28 company suspension on 1.july.2009. this company can start there trading from today. But people are still waiting for other companies comeback. SEC have to bring back that all company.

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28 "Z" Category Companies Share Are Not Suspended It's Hold: X DSE Director

28 "Z" Category Companies Share Are Not Suspended It's Hold: X DSE Director

X DSE director said that 28 "Z" Category Companies Share Are Not Suspended its hold by SEC. Because, 1july2009 all the black money coming in the share market and if the Z category share stay that time market will lost its balance. So SEC took the decision for the investor and for market also. And he also said that they giving warning investor to invest their money by looking companies status not based on riumors. He again request to the all investor to invest their money in a good status company.

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Atlast Grameen Phone Is Coming On Stock Market..

Atlast Grameen Phone Is Coming On Stock Market..

Grameenphone, the leading mobile phone operator of the country, yesterday received a go ahead from the stock market regulator to raise Tk 486.08 crore through an initial public offering (IPO), the largest of its kind in the history of Bangladesh capital market.

The value of the approved IPO is Tk 37 crore more than the company's proposed plan for Tk 449 crore.

Each share will be Tk 10 in face value, on top of which a premium of Tk 60 will be added, Anwarul Kabir Bhuiyan, executive director of Securities and Exchange Commission (SEC), told journalists.

The approval came after a long dithering by SEC.

The SEC executive director said the market lot of the shares will be fixed later in consultation with the stock exchange authorities.

"The Grameenphone IPO, which was awaiting the commission's approval for a long time, will help the capital market expand further on the back of the present bullish trend that creates demand for new securities," Bhuiyan said.

"With the approval of Grameenphone IPO, other big companies will get a message about the capacity of our market, and will be encouraged to be listed on the stock exchange," he said hoping that other telecom companies will also follow suit.

SEC also approved increasing the company's pre-IPO size to Tk 486.07 crore from Tk 420 crore, each of which is priced at Tk 10 in face value, with an additional Tk 64 in premium.

In December last year Grameenphone's Tk 420 crore pre-IPO was settled with a huge response from the local market.

With the increase in sizes of IPO and pre-IPO representing 10 percent of its paid up capital, Grameenphone will be the first telecom company to enjoy a corporate tax cut of 10 percentage points.

The government in the new budget announced that mobile phone operators may enjoy 35 percent corporate tax instead of the current 45 percent if they are listed with the stock exchange as publicly traded companies, with a caveat that the operators must float 10 percent of the paid up capital on the share market, of which pre-IPO cannot be more than a half.

"We are very pleased to have received the official consent from the SEC today and look forward to an expeditious launching of the public offer and successful listing of our shares in the country's bourses," Grameenphone Chief Executive Officer Oddvar Hesjedal, said in a written statement yesterday.

"We are ready and will be following a fast process for fulfilling certain necessary conditions and formalities," he added.

SEC asked Grameenphone to submit its audited financial report as of December 31, 2008 within July 31 this year.

As many as 6.94 crore shares will be floated through Grameenphone's IPO, to realise Tk 486.07 crore from the capital market.

The price of each share has been increased to Tk 10 from the company's proposed price of Tk 1 following demands from market stakeholders.

Dhaka Stock Exchange (DSE) in March this year decided not to list securities with face value of Tk 1, and urged Grameenphone to increase its share price to Tk 10.

In July 2008, Grameenphone worth $3.2 billion back then, finalised its plan to raise $300 million or Tk 2,058 crore from the capital market, $150 million of which would come from the stock market, while the remaining would be raised through private placements or pre-IPO.

Later in October same year the company said it might cut its planned IPO to $125 million -- $65 million of which would come from the stock market, and the remaining $60 million through private placements.

Since then the company halved its IPO package, as foreign institutional investors showed the least interest due to the ongoing global economic slowdown.

Grameenphone submitted its final prospectus in January this year. Cititgroup Global Markets Bangladesh Private Limited is the issue manager of the IPO.

Saiful Islam, managing director of investment bank Equity Partners Limited, said an issue like Grameenphone was urgently needed at the moment when the market is bullish and investors are looking for new quality shares.

"It will also help boost investors' confidence in the market, who have been waiting for Grameenphone shares for a long time," he added.

The Grameenphone IPO will be a catalyst for many big national and international companies to come in and get listed with Bangladesh capital market, said Islam, also the vice-president of DSE.

He said general investors have also been waiting eagerly for the Grameenphone issue.

Echoing him, Salahuddin Ahmed Khan, professor of finance at Dhaka University, said it is a great achievement.

"It will encourage other big and multinational companies to be listed with our stock exchanges," he said.

Norway's telecom giant Telenor owns 62 percent of Grameenphone (GP), which was launched in 1997, while the remaining 38 percent is held by local Grameen Telecom. The share offloading will be proportionately spread between the two shareholders.

GP now enjoys a healthy balance sheet. Its net profit jumped by 68 percent to Tk 320 crore by the end of 2008, compared to Tk 130 crore of the year before.

GP is Bangladesh's market leader among six mobile operators having 21.05 million subscribers, followed by Banglalink's 10.95 million, and AKTEL's 8.84 million as of May 2009.

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SEC suspends share trading of 28 firms

SEC suspends share trading of 28 firms

The Securities and Exchange Commission (SEC) yesterday decided to suspend share trading of 28 companies to protect the interest of investors.
The companies are: Al Amin Chemicals Industries, Ashraf Textile Mills, Bangladesh Chemicals, Bangladesh Dying, Bangladesh Zipper, Beach Hatchery, Chittagong Vegetable, Excelsior Shoes, Gachihata Aquaculture, PMG Industrial Maq Enterprises, Maq Paper, Metalex Corporation, Meghna Condensed Milk, Meghna Pet Limited, Mita Textile, Modern Cement, Padma Printers, Kasem Textile, Rahman Textile, Rangamati Food, Rose Heaven Ball Pen, Sajib Knitwear, Sonali Paper, Sreepur Textile, Tamijuddin Textile, Wonderland Toys and Wata Chemicles. The SEC at a meeting yesterday took the decision, which would be effective from today, an official source said.
It also sent directives to Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) to suspend the share trading of the companies from July 2, 2009.
The SEC also asked the stock exchange authorities to keep share trading of the companies suspended until further notice.
According to a SEC source, the watchdog of the country's stock market would conduct investigations into the companies and would take decision on the findings of the inquiries.
The source said most suspended companies are listed under the 'Z' category - a group of companies those do not have good tract records in making business and profit and offering dividends to its share holders.
The SEC would take similar decision in future if it sees that the things are not going right in the listed companies, the source said. Currently, 93 companies are listed with the DSE under 'Z' category. Of them, nine companies belong to pharmaceuticals and chemicals sector, four cement, six engineering, 22 textile, six insurance, five tannery, 23 food, six paper and printings, four bank, one IT, three jute, one ceramics and three to other sectors.

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