The electronic bidding of Techno Drugs Limited to determine the cut-off price of its shares is scheduled to begin on 21 April and will continue until 24 April.

General investors will get the company’s shares allotment at a 30% discount from the cut-off price.

Only, eligible investors will take part in the bidding where the minimum bidding value will be Tk20 lakh.

According to a disclosure of the Dhaka Stock Exchange (DSE), pension, provident and gratuity funds that have a minimum investment of Tk1.50 crore, and other investors who have maintained a minimum investment of Tk3 crore at market price in matured listed securities as of 8 April are eligible to bid for the initial public offering (IPO) shares of Techno Drugs.

Techno Drugs on 8 March had received regulatory approval for determining the cut-off price for raising Tk100 crore for business expansion through an IPO under the book-building system.

The drug maker will use the fund to purchase machinery, balancing, modernisation, rehabilitation, and expansion of its Narsingdi factory, construction projects at its Gazipur facility, and repayment of loans.

It will allocate Tk25 crore for upgrading and renovating the Narsingdi factory, Tk15 crore for construction in Gazipur, Tk27 crore for machinery, Tk30 crore for loan repayment, and Tk3 crore for IPO expenses.

According to its financial report for fiscal year 2022-23, Techno Drugs recorded a revenue of Tk273.35 crore, reflecting a decrease from Tk502.85 crore in the previous year.

Its net profit stood at Tk19.55 crore, compared to Tk47.98 crore a year earlier.

Techno Drugs started its journey in 1996 with the manufacturing of essential veterinary medicine which was not available locally at that time.

Over the years, the company diversified its portfolio, becoming a major player in anti-cancer and hormonal medicines.

To address market gap and dependency on imported oncology medicines, the company started production of anti-cancer medicines for the first time in the country in 2010.

In 2015, to meet the increased demand, the company established its state-of-the-art factory in Gazipur. The company is also the biggest injectable hormonal medicine supplier to the government, and the fifth contraceptive implant manufacturer in the world and the first of its kind in Bangladesh.

Agrani Insurance Company Ltd has decided to increase its paid-up capital by issuing one rights share against five existing shares.

The company has called an extraordinary general meeting for its shareholders to get their consent to issue the rights shares, according to the Dhaka Stock Exchange. The company would arrange the meeting virtually on 18 April. The record date is 24 April.

Earlier, in June 2021, the securities regulator rejected Agrani Insurance’s rights share offer due to the company’s failure to submit a Credit Information Bureau report.

The listed non-life insurer would issue one rights share against every five existing ordinary shares to comply with the insurance regulator’s capital adequacy requirement.

The Insurance Development and Regulatory Authority needs non-life insurers to have at least Tk40 crore in paid-up capital and at least 60% shareholding by their sponsors and directors together.

Agrani Insurance has Tk33.98 crore in paid-up capital and only 33.83% of its shares are being held by its sponsors and directors.

The issuance of rights shares will be subject to all the necessary regulatory approvals and after securing those, the company will announce a fresh record date to identify shareholders who can subscribe to the right shares.

If the right shares remain unsubscribed by the existing shareholders, the mandated underwriter will absorb the unsold shares.

Agrani Insurance began its journey two decades ago and got listed on the bourses in 2005. It is engaged in the underwriting business.

At the end of December 2023, the non-life insurer recommended a 12% cash dividend for their shareholders.

During the year, its profit after tax stood at Tk7.14 crore and its earnings per share was Tk2.10.

On Sunday, the closing share price of the company stood at Tk37.60 on the stock exchange.

Square Pharmaceuticals Chairman Samuel S Chowdhury plans to acquire 20 lakh shares valued at Tk43 crore, aiming to increase his stake in the company.

In a disclosure on the Dhaka Stock Exchange’s website on Thursday, he outlined his plans for acquiring the shares through public and block market transactions within the next 30 working days.

Meanwhile, the pharmaceutical company’s shares experienced a 0.70% increase on the news, reaching Tk217.30 on the country’s premier bourse on Thursday.

On 11 March, its Managing Director Tapan Chowdhury also declared to buy 20 lakh shares within 30 working days.

Earlier, in January this year, Tapan Chowdhury and another Director Ratna Patra, made a declaration for buying a total of 20 lakh shares.

When directors purchase shares to increase their ownership, general shareholders’ stake at that company declines, market insiders said.

This generates demand for the company’s shares in the market, potentially leading to an increase in its share price, they added.

As of 29 February, sponsors and directors jointly held 35.01% shares in Square Pharma, while institutions held 15.21%, foreign investors 13.97%, and general investors 35.81%.

In the July-December period, its revenue stood at Tk3,746 crore, slightly down from Tk3,751 crore one year ago. Its net profit after tax stood at Tk920 crore and its earnings per share was Tk10.37.

According to company statement, several products of Square Pharma have been transferred to its wholly owned subsidiary (99.95%), Square Lifesciences Ltd.

As a result, the standalone earnings per share of the company reduced during this period.

However, the consolidated earnings per share of the Square group were not affected by this transfer and achieved positive growth during the period.

It had paid a 105% cash dividend to its shareholders for the fiscal year 2022-23, which was 100% a year ago.

The Bangladesh Securities and Exchange Commission has established a committee aimed at augmenting the presence of high-quality companies within the stock market and implementing the requisite measures to achieve this goal.

On Wednesday, during a meeting between top officials of DSE Brokers Association of Bangladesh and the commission, Commissioner Prof Shaikh Shamsuddin Ahmed made the announcement.

The current state of the country’s capital market, persistent challenges, and necessary actions were discussed at the meeting.

We are prioritising the listing of new high-quality companies to infuse greater dynamism into the country’s capital market

Prof Shaikh Shamsuddin Ahmed, commissioner, Bangladesh Securities and Exchange Commission

In his speech, Commissioner Shaikh Shamsuddin said the commission is collaborating with all stakeholders, including market intermediaries, to enhance the welfare of the capital market. “We are prioritising the listing of new high-quality companies to infuse greater dynamism into the country’s capital market.”

He said to deal with the obstacles that hinder the capital market’s development, the commission will work closely with institutions such as the Bangladesh Bank and the National Board of Revenue.

Following a thorough discussion on the capital market’s current status during the meeting, representatives from the commission and the brokers’ association reached a consensus to collaborate closely in addressing prevailing weaknesses within the country’s capital market. Their joint aim is to expedite measures for long-term stimulation and growth of the capital market.

The commission reassured general investors not to panic, emphasising that the market operates according to its own dynamics. Furthermore, the commission affirmed its commitment to taking necessary measures to maintain market stability.

Risk-free interest surged above 11%, investors were deprived of gains from healthier stocks for a long time and excessive and unpredictable regulatory interventions perplexed people – all these played a role in the free fall of Dhaka stocks for more than five weeks.

Over Tk86,000 crore in market capitalisation – the total value of all the listed securities on a bourse – has been eroded during the last 24 sessions since 12 February when investors started to shy away from risk-taking in stocks due to a rare regulatory indecision regarding how they would treat shares of sick companies selling like hotcakes.

Since 1 January, the DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), fell by 7% to 5,814 points during the closing bell on Tuesday – the lowest since 24 May 2021.

Only in three of the past 24 trading sessions did the index see some green, when some optimistic investors tried to grab the emerging opportunity to buy oversold shares, only to surrender to desperate sellers on the very next day.

Analysts, adhering to the universal theory that suggests the stock market tends to weaken when interest rates continue to rise, stated that large-cap stocks, particularly those that were stuck at their lower limits for one and a half years despite declining earnings, might have been under some stress until there is a rebound in fund flow and corporate earnings.

However, the frequent occurrence of junk stock mega fests on the bourses, facilitated by the regulator’s decision to keep most large and mid-cap stocks hibernating for extended periods, has pushed clean investors into a tight corner.

Stockbrokers, seeking anonymity, revealed that the market’s collective psyche was abnormally affected by excessive manipulation, leading many short-term traders to lose money chasing them at the end of managed rallies. Clean investors, who prioritise adherence to investment principles, have consequently shied away.

Sick companies, grappling with ongoing production challenges, outstanding bills, and loan payments, while their auditors continuously raise red flags for investors, have surprisingly led the gainers for more than a year.

For instance, lossmaking Khan Brother PP Woven Bag Industries saw its shares surge more than 20 times in value over the course of a year until the end of February 2024.

Another example is Khulna Printing and Packaging, which has been out of operations for an extended period and was founded by an absconded loan defaulter. Despite this, its shares surged by 267% in a year.

Similarly, Central Pharmaceuticals, which encountered significant disputes with the revenue authority and subsequently became sick, witnessed its shares generate a remarkable 230% return.

Meanwhile, blue-chip firms like Square Pharmaceuticals and Brac Bank generate meagre positive returns if their dividends and a single digit capital gain are calculated together. On the other hand, Grameenphone and British American Tobacco caused 15-20% capital erosion in a couple of weeks.

Rumour about regulatory factors at their peak

Seeing rare market interference like the floor price, regulators suddenly changing their minds in so many things related to market behaviour, and an apparent indemnity to manipulators who act with insiders made impatient investors excessively rumour-seeking as they believed in what they saw, said a senior stock broker.

For instance, the process of coming out of pandemic time relaxation by sending weaker firms in the Z category has been a chaotic blunder to the investors, as the regulatory officials gave contradictory messages several times alongside acting out of indecisions that even hurt junk lovers’ sentiment, said another brokerage official who serves thousands of retail and a few institutional investors.

Rumours like “regulatory officials got divided in quarters, when the floor from which stocks to be lifted, or which new circular the regulators to throw to change market courses” are price sensitive to investors, and the factors should not have been so important here, he added.

The Bangladesh Securities and Exchange Commission (BSEC), blaming rumours for the market fall, recently said in a press statement that there is no division among market regulators and bourses and spreading rumour on social media would be a punishable offence.

Social media user investors nowadays are refraining from sharing their market predictions, which is illegal according to local securities laws. However, their frustration is rising as the free fall continues, and this sentiment is going viral on social media platforms, with almost everyone counting losses.

Brokers’ seven points for a better market

The DSE Brokers Association (DBA) held a meeting among the top brokers on Tuesday and stated in a press release that they believe the fall is a natural consequence of the withdrawal of floor price restrictions.

They anticipate that the market should soon take the right course, attracting investors to lucrative stocks at cheaper prices.

They urged policymakers and regulators not to consider any radical market interference, such as reinstating floor price restrictions.

Their major demands, according to the statement quoting DBA President Md Saiful Islam, included listing more of the well-performing companies to increase the supply of quality stocks, strengthening the mutual fund sector, ensuring reforms in the stock categorisation system and margin loan regulations, and ensuring compliance in listing and operating listed firms.