Shares of Summit Alliance Port surged after German logistics giant Hellmann Worldwide announced plans to acquire a 40% stake in Summit Alliance’s freight forwarding and shipping agency business.

The strategic partnership is set to enhance Summit Alliance’s global reach and operational capabilities, aligning with Hellmann’s goal of expanding its footprint in South Asia, according to its price-sensitive statement filed on the Dhaka Stock Exchange (DSE).

Following the announcement, Summit Alliance Port shares jumped 9.90% to close at Tk22.20 today (20 January) at the Dhaka Stock Exchange.

Summit Alliance operates its freight forwarding and shipping agency business through its subsidiary, Container Transportation Services Limited, which also serves as the local agent for Hellmann Worldwide Logistics International.

Recognizing the strong business potential in the sector, Hellmann Worldwide expressed interest in establishing a direct presence in Bangladesh. To this end, the company signed an agreement with Summit Alliance Port on 19 January to purchase 3.33 lakh shares of Container Transportation Services at a face value of Tk10 each, with an additional premium of Tk56.50 per share. The transaction remains subject to shareholder and regulatory approvals.

Upon completion of the agreement, Hellmann Worldwide will hold a 40% stake in Container Transportation Services, with Summit Alliance retaining the remaining 60%.

Market analysts view the deal as a major milestone for both companies, expected to foster innovation and improve efficiency in logistics services across the region.

According to Hellmann World wide’s website, the company was founded in 1871, operates in 57 countries, and generates annual revenue of €3.5 billion.

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Additionally, the paint manufacturer will seek approval for the allotment of renounced shares by J&N Investments (Asia) to other shareholders and employees of the company.  

The EGM will be held through a hybrid platform, with the physical venue at Dhaka Regency Hotel in Nikunja.  

With the rights offer, the company plans to raise Tk303 crore to invest in its third factory at the National Special Economic Zone.  

According to its previous decision in December regarding the rights offer, Berger will issue 27.28 lakh shares at Tk1,110 each, including a premium of Tk1,100.  

To increase free-float shares to 10%, Berger’s parent company J&N Investments (Asia) Limited, which holds a 95% stake in Berger Paints, will not participate in the rights offer.

A senior company officer told The Business Standard that under rights issue rules, J&N Investments is eligible to receive 23.18 lakh shares. However, these shares will instead be allocated to general shareholders, allowing them to receive one right for every share held. The remaining rights shares will be allocated to Berger’s employees.

This is in line with stock market regulator instructions to increase free-float shares by 10% from the existing 5%.  

Previously, in January 2024, the company unveiled its plan to raise Tk375 crore by issuing 27.28 lakh rights shares at Tk1,376 each, including a premium of Tk1,366.  

However, following the BSEC’s direction, the company revised its plan, lowering the price of shares to comply with public issue rules.  

Berger Paints has approved a 500% cash dividend, amounting to Tk231.88 crore, for the fiscal 2023-24, which ended on 31 March.  

This represents the highest-ever payout to its shareholders in terms of the total amount.  

In FY24, its consolidated net profit increased by 7.72% to Tk324 crore compared to the previous financial year, while its revenue rose by 1.09% to Tk2,583 crore compared to the previous year.  

Meanwhile, in the April-September period of this year, its revenue grew by 5.41% to Tk1,265 crore, while net profit jumped by 8.57% to Tk152.55 crore compared to the same period the previous year.  

On Thursday, its shares closed at Tk1,822 each on the Dhaka Stock Exchange.

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Foreign companies and family-run companies should be encouraged to enter the stock market, not only the state-run ones, said Salehuddin Ahmed, finance adviser of the interim government, today (7 January). 

“How will the base grow without increasing the number of good companies in the market? Where will the investors invest?” he asked during a meeting with stakeholders at the Dhaka Stock Exchange (DSE) office in the capital’s Nikunja, according to sources.

He said there is an initiative to enlist domestic, governmental, and foreign institutions.

Talking to reporters after the meeting, Salehuddin said that various initiatives are currently underway to restore confidence in the market. “Only reforms are being carried out now. We are not creating any new policies. We will not proceed as before, giving advantages or raising some share prices through policy.”

“Several measures have already been taken. Various types of support, including liquidity, are being provided. We have sat down with brokerage houses, two stock exchanges, and market stakeholders to discuss their advantages and disadvantages. We are confident that the market will improve,” he added.

He said no policy is being made to increase the prices of any shares.

At a previous meeting with stakeholders, the adviser stressed that foreign companies doing business in Bangladesh need encouragement and incentives to be listed.

Representatives of the Bangladesh Securities and Exchange Commission (BSEC), Bangladesh Bank, National Board of Revenue (NBR), Chittagong Stock Exchange (CSE), DSE Brokers Association of Bangladesh (DBA), Bangladesh Merchant Bankers Association (BMBA), Central Depository Bangladesh Limited (CDBL), Central Counterparty Bangladesh Limited (CCBL), Investment Corporation of Bangladesh (ICB), and Financial Reporting Council (FRC) attended the meeting.

After the meeting, state-run ICB’s Chairman Professor Abu Ahmed said, “We have discussed providing fiscal incentives like various exemptions, including duties in the budget. Foreign companies won’t come if we don’t offer them benefits. He [the adviser] feels that incentives must be given.

“We are expecting that the upcoming budget will include such measures. The adviser had previously held meetings and provided tax relief on capital gains. Such incentives are needed for long-term market development.”

During the meeting, the stakeholders advised Salehuddin on introducing duty and policy exemptions to bring foreign institutions and large corporates into the market by holding discussions with officials from the government, the National Board of Revenue (NBR), and Bangladesh Bank.

The finance adviser commented on the need to reduce reliance on long-term financing from banks to increase liquidity in the capital market and reduce non-performing loans.

“In every country, long-term investments come from the capital market, not banks. Businesses should not rely solely on banks for all their funding. They should have at least 20-30% of their own. If everything is based on debt, how would that work?” he said. 

“One or two individuals will not hinder reforms. If anyone obstructs the implementation of policies, actions will be taken against them,” Salehuddin said when asked how confidence will be restored with those involved in malpractices still in BSEC and DSE. 

The meeting, organised by the DSE Board of Directors with all capital market stakeholders and the finance adviser in attendance, had started at around 10am. However, journalists were barred from attending it.

DSE officials did not give any particular reason for not allowing reporters at the meeting.

The country’s capital market has been passing a volatile situation since the Awami League government was ousted in a mass uprising in August last year.

The key index at DSE fluctuates daily as turnover continues to be around Tk300 crore.

Amid the situation, the finance adviser attending a meeting with all the key stakeholders is very significant for the capital market, said insiders.

Generally, the DSE public relations department sends reporters invitation cards for such meetings or notifies them through emails or messages to attend them. But this was not the case for the meeting this morning.

Reporters present at DSE claimed that it was one of the first major meetings with stakeholders where journalists were not allowed in.

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The decision was made at a meeting arranged by the Bangladesh Securities and Exchange Commission (BSEC) amid an ongoing tussle between CCBL and the stock exchanges, according to sources present at the meeting.

“In addition, an evaluation committee will be formed to oversee the activities of the CCBL. After that, the company and its major shareholders will make new decisions regarding its operations,” a participant in the meeting, speaking on the condition of anonymity, told The Business Standard.

The meeting was attended by directors and officials from the Dhaka Stock Exchange (DSE), Chittagong Stock Exchange (CSE), and CCBL, according to the sources.

In December last year, the DSE urged CCBL – formed in 2019 to manage share settlements and improve the payment system – to suspend its procurement activities for installing a data centre and software for the next six months.

However, CCBL declined the DSE’s request and sent a letter to the stock exchange explaining its activities.

According to sources, CCBL is set to purchase software worth $12 million from an Indian firm.

In this regard, a DSE director said, “There is a lack of clarity in the tender process for purchasing the software. There are also questions about the software’s price. Considering all aspects, we have raised concerns about buying the software now.”

The DSE holds a 45% stake in CCBL, while the CSE owns 20%, the Central Depository of Bangladesh holds another 20%, and 12 banks collectively own the remaining 15%.

A director of the stock exchange, present at the meeting, told The Business Standard on the condition of anonymity, “Dissatisfaction was expressed with the activities of the central counterparty company. The major shareholder of the central counterparty is DSE. Although a director of DSE was on the board of CCBL, the independent directors of DSE were not aware of the company’s activities, nor were they properly informed by the board of DSE.”

Therefore, DSE should be kept informed about the overall activities of CCBL, starting with software procurement. This was the topic of discussion at the meeting. It was decided that the company’s activities will continue after consulting with the major shareholders, he added.

BSEC spokesperson Rezaul Karim declined to comment on the development, and no officials from CCBL were available to speak on the issue.

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Currently, there is a crawling peg exchange rate system in place and banks are allowed to buy and sell US dollars freely at a mid-range of Tk 117.

The crawling peg is a system of exchange rate adjustments in which a currency with a fixed exchange rate is allowed to fluctuate within a band of rates.

Introduced in May of this year, this new system is not fully based on the market.

Though this new system was in place, the majority of the country’s banks are now buying and selling each US dollar for over Tk 124.

A visiting delegation of the IMF emphasised the need for a flexible or market-based exchange rate during a meeting with senior officials of the central bank yesterday.

After the meeting, Husne Ara Shikha, executive director and spokesperson of the central bank, told The Daily Star that the IMF team suggested that Bangladesh introduce a market-based exchange rate system.

She said the central bank would issue a circular soon in this regard as per the IMF suggestion.

Another official of the central bank said the BB has plans to publish a reference rate for foreign currencies based on daily bidding rates provided by banks.

He said the banking regulator now aims to align the reference rate with the rates at which banks buy and sell US dollars.

The IMF concluded its two-week-long official engagements in Bangladesh, reviewing progress under its $4.7 billion loan program.

Bangladesh has already received $2.3 billion since 2023, with the next tranche expected by December.

The government has sought an extra $3 billion from the IMF.

On August 7, the IMF said it would continue its ongoing $4.7 billion loan programme in Bangladesh despite the change in government.

In another development, the IMF relaxed the net international reserves (NIR) target for March and June of next year considering the stress that the country’s economy was in due to high inflation, flood and recent political changeover.

The NIR is the difference between reserve assets and reserve liabilities.

The revised target will be disclosed soon, said central bank officials.

Till December of this year, the NIR target set by the IMF was $15.30 billion, but the central bank managed to maintain $14.90 billion till December 18.

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Despite this declaration, announced in a disclosure yesterday, its shares rose by 3.92%, reaching Tk121.90 on the Dhaka Stock Exchange (DSE).

Market insiders attributed the rise in share prices to a positive development within the company, which had previously experienced disputes among its sponsor-directors.

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The textile manufacturer had paid a 3% cash dividend in FY22 and a 1% cash dividend in FY21. However, it did not pay any dividend in FY20 due to losses.

In FY23, it incurred a loss of Tk1.70 crore, compared to a net profit of Tk2 crore in the previous year. As of the end of FY23, its loss per share stood at Tk0.78.

To secure shareholder approval for the dividend and audited financial statement, Al-Haj Textile will hold its annual general meeting on 30 January next year, with a record date set for 8 January to determine eligible attendees.

According to a company insider, Al-Haj Textile failed to declare a dividend and finalise its financials within the stipulated time due to conflicts among the company’s directors and sponsors over board control. The disputes led to court proceedings.

The conflicts were eventually resolved through discussions and alternative dispute resolution, the insider added.

In November, the company announced in a stock exchange filing that the internal disputes among its sponsor-family directors had been resolved, with all parties reaching an agreement.

Following this, the company restructured its board, including a shareholder with more than 5% ownership as a director. The regulator-appointed independent directors were subsequently withdrawn.

Its newly appointed board consists of Md Bakhtiar Rahman as chairman (acting), Md Mizanur Rahman as managing director and CEO (acting), and directors Md Harunoor Rashid, Md Abdullah Bokhari, Md Talha, Md Saidul Islam, Khodeza Khatoon and Md Joynul Abedin Chowdhury.

Amid internal conflicts in June 2023, the Bangladesh Securities and Exchange Commission (BSEC) had restructured Al-Haj Textile’s board, appointing independent directors. However, the disputes among the directors continued for over a year.

The owners have now resolved the issues among themselves. In February, in a letter to the BSEC signed by Md Bakhtiar Rahman and Md Mizanur Rahman, both shareholder-directors, Al-Haj Textile stated that the disputes had been resolved.

On 17 November, the BSEC withdrew its appointed independent directors from the company’s board.

In its letter, the BSEC noted that the sponsor-directors of Al-Haj Textile Mills collectively hold 30% of the company’s shares. It also noted that the company’s shares are trading in the B category, leading to the withdrawal of the commission’s earlier directive appointing independent directors.

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The loan, approved by the Bangladesh Bank, was facilitated through a finance ministry guarantee issued on November 13.

The fund aims at enhancing ICB’s investment capacity and repay high-interest deposits and loans.

The interest rate of the approved loan was fixed at the variable bank rate, and the loan amount was deposited into ICB’s bank account on December 12.

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The decision comes two weeks after the Bangladesh Trade and Tariff Commission (BTTC) recommended the government reduce import taxes on sunflower oil and canola or rapeseed oil to offer a greater range of cooking oils in the markets.

The revenue board said the tax benefit for import of these types of oils will be valid until March 31 next year.

The cut in tariffs will reduce the import cost of these oils by Tk 40-Tk 50 a litre, the NBR said in a press release today.

Bangladesh’s consumers, already grappling with persistent inflation, have seen cooking oil prices rise over the past three months.

This increase has been driven by higher international prices and supply concerns resulting from reduced palm oil production in Malaysia and Indonesia, the world’s two largest producers of palm oil, which are increasingly focusing on using it for biodiesel.

Bangladesh depends largely on import to meet its domestic demand of approximately 23 lakh tonnes of edible oil a year.

On Sunday, the average price of unpackaged palm oil was Tk 156.5 per litre, up 23 percent year-on-year, according to market price data compiled by the Trading Corporation of Bangladesh.

Prices of soybean oil rose too with packaged oil becoming scarce in the retails amid supply shortage.

Against this backdrop, the BTTC last week recommended that the government impose a 25 percent regulatory duty on the export of crude and refined rice bran oil to increase domestic supply.

Yesterday, the NBR said it also slashed value-added tax (VAT) on the import of sunflower and canola oils to 5 percent, along with the 5 percent VAT cut on import of palm and soybean oil from the international market.

Before lifting the import tariff, crude sunflower oil importers were required to pay a total of 31 percent of their purchase price in duties and taxes, while for the refined version it was 32 percent.

For raw canola oil, total import duty and taxes were 37 percent, while for the refined version it was 58 percent, the BTTC said in its report sent to the commerce ministry and the NBR earlier.

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The agreement, initially signed to transfer 38% of Ring Shine’s shares as part of a regulatory directive, has been nullified following a decision by the company’s board.

The board made the decision during a meeting on Sunday, according to a statement issued by the company.

In its statement, Ring Shine explained that the termination of the agreement was necessary to protect the interests of all stakeholders. The company cited controversial activities surrounding the agreement as the primary reason for its cancellation.

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Earlier, in August 2023, the Bangladesh Securities and Exchange Commission (BSEC) conditionally allowed Wise Star Textile Mills and five Singapore-based companies to buy Ring Shine’s 38% shares, including those held by the sponsor-directors.

Later in September of that year, the board of directors of Ring Shine expressed concerns about the credibility of the Wise Star and its associates.

A senior officer of the Ring Shine said the company’s existing board conveyed its opinion about the prospective owners to the BSEC so that Ring Shine is not held accountable if any issue arises after the takeover.

Ring Shine’s existing board found that there is no record of Wise Star’s commercial operations since its inception in 2021. Yet, it has a paid-up capital of Tk20,000 and authorised capital of Tk3 crore.

Ring Shine, on the other hand, has always been in active operations since 1998 and has a paid-up capital of Tk500 crore and authorised capital of Tk540 crore.

This massive paid-up capital difference is what made Ring Shine’s directors frown and doubt Wise Star’s financial strength to take over the operations of Ring Shine, he added.

On 22 October 2020, the BSEC froze the company’s IPO account due to non-compliance with the consent letter requirements for raising funds from the capital market by issuing shares at Tk10 each.

Ring Shine entered into the capital market raising Tk150 crore funds for business expansion issuing shares in 2019. Amid the pandemic, it ran into trouble as its export orders from foreign buyers significantly fell.

During an inspection, the BSEC discovered that the company had issued shares to 11 sponsor directors and 33 pre-IPO private placement shareholders without receiving any payment from them. The commission also revealed that at least Tk52 crore remained unpaid by the pre-IPO shareholders.

The then commission, led by Professor Shibli Rubayat Ul Islam, had allowed some owners of another listed firm to take over the textile company, though the takeover ultimately did not occur.

Recently, following the government change in August this year, the main owners have returned to the company.

Earlier, Auniruddho Piaal, managing director of Ring Shine Textiles, told TBS, “Since resuming operations after a partial disruption in recent years, the company has seen a significant increase in production. Demand from our foreign customers is growing rapidly.”

He said, “Given this surge in demand, we plan to utilise the frozen IPO funds, with shareholder approval, for the company’s operations in the best interest of our shareholders.”

Piaal further said, “We have already requested permission from the BSEC to unfreeze at least Tk10 crore from the IPO account to settle outstanding dues with Bepza (Bangladesh Export Processing Zones Authority). After receiving shareholders’ approval at the upcoming AGM, we will apply to the commission again to unfreeze the remaining funds for purchasing machinery.”

Meanwhile, Ring Shine reported a 43% drop in revenue, falling to Tk157 crore in FY24 compared to the previous year. During the same period, the company posted a net loss of Tk153 crore.

Ring Shine has been incurring losses since FY20, resulting in its retained earnings reaching a negative Tk902 crore. Additionally, the company has failed to pay any dividends since FY19.

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This decision was approved in a meeting of the Bangladesh Bank board with the central bank Governor Dr Ahsan H Mansur in the chair today (8 December), said its spokesperson and Executive Director Husne Ara Shikha.

Speaking about the approval, Shikha said the new banknotes will feature updated designs.

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If all goes as planned, the spokesperson said the new notes will be available in the market within six months.

Sources in the central bank said the new notes will no longer feature the image of Bangabandhu Sheikh Mujibur Rahman.

Instead, Shikha said the new designs will incorporate religious monuments, Bengali heritage and imagery related to the ‘July Revolution graffiti’.

According to Shikha, the final approval for these changes has already been granted by both the Bangladesh Bank and the government, with printing of the new notes already underway.

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