Posts in category: Uncategorized

United Commercial Bank has decided to be the sponsor of an upcoming closed-end mutual fund to be managed by Capitec Asset Management.

As the sponsor of a growth fund to be listed publicly, the private sector lender will invest Tk50 crore, UCB announced in a regulatory disclosure on Tuesday, adding that its board of directors has already approved the decision.

A growth mutual fund focuses on investing in companies with high potential for faster growth, and capital gain-chasing investors tend to prefer such mutual funds over income funds, which invest in high-income generating stocks or bonds.

An official of the asset manager told The Business Standard that the target size of the upcoming fund would be Tk150 crore.

The fund will apply for regulatory flexibility to enable the asset manager to better switch between suitable asset classes – stocks and bonds – to maximise returns for investors, added the official.

For instance, when fixed-income securities like corporate or treasury bonds offer lucrative yields, stocks as an asset class usually face selling pressure. Conversely, when interest rates go down, smart investors tend to switch to stocks over fixed-income assets.

Stiff regulations requiring a minimum exposure to stocks often force mutual funds to absorb capital erosion when the stock market goes through a bearish cycle.

Capitec currently manages four mutual funds – three open-ended mutual funds and one closed-ended fund.

National Life Insurance has announced a 38% cash dividend to its shareholders for the calendar year 2023. 

At a meeting on 23 May, its board of directors made a recommendation for the dividends.

But it will require shareholders’ approval at the next annual general meeting (AGM), slated to be held on 30 June.

The life insurer had announced the same dividends a year earlier.

On Thursday, National Life Insurance’s shares price fell by 2.93% or Tk3.4 to Tk112.6 each on the Dhaka Stock Exchange (DSE).

The record date has been fixed for 12 June, according to the price sensitive information (PSI) published on its website.

In 1995, the company got listed on the DSE. Now, its shares are being traded under the A category on the country’s two bourses.

The paid-up capital of National Life Insurance is Tk108.52 crore, which is split into 10.85 crore general shares.

The company’s market capitalization is Tk1,258 crore.

As of April 2023, sponsor-directors held 55.88% of the company’s total shares, institutional investors owned 19.52% stake, foreign investors had 0.18% and general shareholders held 29.30%, according to the DSE.

The Dhaka Stock Exchange (DSE) Chairman, Professor Dr Hafiz Md Hasan Babu, has urged the National Board of Revenue (NBR) to refrain from imposing a capital gains tax on individual investors. 

In a recent press release, he said various media outlets have reported that the NBR is planning to impose a tax on capital gains for individual investors. This news has instilled fear and panic among investors, contributing to the market’s continuous decline.

During this transition period in the capital market, the DSE Chairman has requested the NBR Chairman to consider the interests of investors and not impose a tax on capital gains, reads the press release.

According to market insiders, the NBR’s move to impose a 15% tax on individual investors’ capital gains over Tk40 lakh from the stock market recently triggered a fresh round of sell-offs.

The market stopped falling earlier this month when the Bangladesh Securities and Exchange Commission (BSEC) Chairman, Professor Shibli Rubayat Ul Islam, informed journalists that NBR officials had assured him there would be no imposition of such a tax right now.

However, the market dived deeper following news updates last week that the NBR had initially sought and obtained Prime Minister Sheikh Hasina’s approval to proceed with the capital gain tax, alongside many other tax elements of the upcoming national budget.

The market capitalisation at the Dhaka Stock Exchange (DSE) has plummeted by around Tk20,000 crore over the past six consecutive days.

During the sessions, DSEX, the benchmark index of the DSE, lost 303 points to settle at 5,393, lowest since 19 April 2021.

TBS Illustration

Digicon Technologies PLC, a leading IT-enabled service provider, seeks to raise Tk30 crore through an initial public offering (IPO) from the capital market to fuel its expansion endeavours.

The company has applied to the Bangladesh Securities and Exchange Commission (BSEC) to issue three crore ordinary shares at a face value of Tk10.

As per its IPO utilisation plan, the firm intends to allocate Tk5.5 crore to repay a term loan, Tk4.5 crore for working capital, Tk18.55 crore for capital expenditures, and Tk1.45 crore for IPO expenses.

Digicon Technologies is one of the largest business process outsourcing (BPO) companies in Bangladesh. Its principal business activities include ITES services, IT training, IT consultancy, IT solutions, BPO and call centre services, HR management and payroll services, digital services, marketing of software products, and providing maintenance and managed services.

Wahidur Rahman Sharif, managing director of Digicon Technologies, told The Business Standard that under the government’s Smart Bangladesh vision, numerous IT-based development projects will be created within the country.

In the future, these projects will be automated and implemented through IT companies, creating new opportunities for the sector, he added.

“Additionally, foreign companies now prefer to obtain services at a lower cost, as these services are quite expensive in their own countries. They are prioritising countries like Bangladesh, leading to new opportunities in outsourcing. To capitalise on these prospects, we aim to make our companies more competitive,” he said.

“Furthermore, we plan to increase compliance by listing our company on the stock market, which will make it easier to meet customers’ requirements. The anticipated successful business expansion will further strengthen our company’s foundation in this sector,” he added.

IT-enabled services and project income are the major revenue sources for the company. In the first six months of the current fiscal year, the company registered a revenue of Tk22.23 crore, an increase from Tk17.80 crore in the equivalent period the previous year.

Of this revenue, Tk14.20 crore came from IT-enabled services and Tk8.03 crore from project income services.

Its profit after tax stood at Tk3.16 crore, a 6% increase from Tk2.97 crore in the corresponding period of the previous year.

Its earnings per share were Tk1.15, compared to Tk1.08 a year ago. Its net asset value per share stood at Tk21.16 at the end of December 2023.

In FY23, the company made revenue of Tk45.15 crore, up from Tk41.78 crore in FY22. During the year, its profit after tax was Tk4.07 crore, a 195% increase from Tk1.38 crore in the previous fiscal year.

Its authorised capital is Tk100 crore, while its paid-up capital stood at Tk27.50 crore.

The company has invested in TechCity Bangladesh Limited, incorporated in October 2017, with a paid-up capital of Tk50 lakh. Digicon Technologies PLC owns 45% of the company. Digicon Technologies PLC started its business in December 2010 and is situated at Sheikh Hasina Software Technology Park, Jashore.

The Bangladesh Association of Contact Center and Outsourcing wrote on its website that the ICT sector in Bangladesh is poised for continued expansion.

According to the International Telecommunication Union (ITU), the number of internet users nearly tripled from 6.5% of the population in 2013 to 18.02% in 2017. Bangladesh ranked 147 out of 176 on the ITU’s ICT Development Index 2017, an occasional report that captures the level of ICT development.

Unilever Consumer Care has announced a 300% cash dividend on ordinary shares for the calendar year 2023 ended on 31 December.   

At the 51st annual general meeting on Tuesday, its shareholders approved the dividends apart from directors’ report, auditor’s report, and audited financial statement for the year, according to a release.

“In 2023, as a global business, our company encountered significant challenges stemming from geo-political crises, leading to a decline in gross profit,” Masud Khan, the company’s chairman, told the AGM.

“However, despite these adverse circumstances, we demonstrated resilience by increasing our net profit margin by 6.5% in 2023 compared to 2022,” he added.

The AGM was held on digital platform in line with the Bangladesh Securities and Exchange Commission’s directives.

The company’s other directors, Mohammad Zaved Akhtar, Zinnia Tanzina Huq, SOM Rashedul Quayum, Md Abul Hossain, and Reazul Haque Chowdhury, and Company Secretary, Md Naharul Islam Molla, also joined it.

Unilever Consumer Care Limited is one of the leading fast-moving consumer goods companies and has been operating in Bangladesh since 1974.

Throughout its remarkable journey of over four decades in this country, UCL stands strongly and maintains a leading position in the Health Food Drink Category of Bangladesh.

UCL’s portfolio includes international brands Horlicks, Maltova, Boost and GlucoMax D.

Local drug maker Renata has shipped initial consignment of its first registered product in Australia.

In a statement on Sunday, the company said the shipment of Levonorgestrel known by its brand name Novella-1 in a regulated market like Australia is a testament to their products’ global standard.

Levonorgestrel is approved by the World Health Organisation, and other regulatory bodies such as the US FDA and the Therapeutic

Goods Administration (TGA) as a first line oral emergency contraceptive pill.

The distribution and commercialisation of Levonorgestrel will be done through Renata’s partner, Nova Pharmaceuticals Australasia Pty Ltd, a supplier of pharmaceutical products to pharmacies and supermarkets in Australia.

The commercial launch of Levonorgestrel, with two other products in queue for registration in Australia, would further bolster Renata’s growing market access worldwide, the company also said in the statement.

The Dhaka Stock Exchange (DSE) and the DSE Brokers Association (DBA) have congratulated and thanked Prime Minister Sheikh Hasina for directing government companies to be listed in the capital market.

The prime minister issued the directive during the meeting of the Executive Committee of the National Economic Council (Ecnec) last Thursday.

Describing this directive as timely and positive, Dr Hafiz Muhammad Hasan Babu, chairman of DSE, said that aside from enhancing the dynamics of the capital market, it will also contribute to attracting foreign investment and fostering the sustainable development of the capital market.

A notification issued by the DSE said that despite numerous efforts, the stock exchange could not list government institutions in the capital market. Finally, the prime minister directed the government institutions to register with the aim of revitalising and broadening the economy.

Hafiz Muhammad Hasan Babu said, “If this directive is implemented, reputable companies will be listed in the capital market. This will benefit the country’s capital market and economy. Investor confidence will also increase with government companies in the capital market.”

Meanwhile, a notification released by the Dhaka Stock Exchange Brokers Association (DBA) described the prime minister’s directive as very positive and timely for the capital market.

DBA President Saiful Islam said that if this directive is implemented, the country’s capital market, as well as the overall economy, will accelerate.

He expressed hope that the instruction to establish a smart capital market would be promptly implemented, with its impact evident in the country’s economy, including the capital market.

He assured of providing necessary support to the relevant government departments, along with market regulatory organisations, in executing the directive.