Most NBFIs struggling, but a few shining

At the end of 2022, publicly traded NBFIs’ average non-performing loans (NPLs) ratio skyrocketed to nearly 24% due to some extreme figures such as 89% bad loans of scam-hit International Leasing.

Infographic: TBS

Infographic: TBS

The non-bank financial institution (NBFI) sector in Bangladesh has been struggling with a huge amount of non-performing loans, a liquidity crisis, and an extreme squeeze in the NBFIs’ net interest margin in recent quarters.

A significant portion of the blame can be attributed to non-compliant firms that sunk due to non-compliance and embezzlement.

However, some top-tier firms having better corporate governance, winning strategies, and the financial strengths to weather tough times, clearly stood apart from their mediocre competitors and also to show a contrasting picture of the devastated NBFIs that were struggling to pay back depositors.

For instance, at the end of the challenging year 2022, publicly traded NBFIs’ average non-performing loans (NPLs) ratio skyrocketed to nearly 24% due to some extreme figures such as 89% bad loans of scam-hit International Leasing.

On the flip side, top-tier firms managed to arrest their NPLs within a 3% to 7% range, while home loan provider Delta-Brac Housing (DBH) Finance PLC succeeded in recovering more than 99% of its loans.

With similar strong performance in several key financial indicators followed by analysts, the specialised NBFI appeared to be the strongest before analysts’ eyes.

The research arm of brokerage firm EBL Securities released its “NBFI Sector Performance and Earnings Update” report at the end of August, awarding DBH Finance PLC an impressive score of 89.69 out of 100. According to the audited financial report for 2022, DBH Finance PLC’s business competitor, National Housing Finance and Investment, secured the third position among all NBFIs with a score exceeding 68.

Rayhan Ahmed, senior research associate at EBL Securities, said, “A relatively lower default rate in housing loans contributed to the high profitability and ranking of these two specialised NBFIs, reflecting their strong financial health.”

IDLC Finance Ltd, the largest NBFI in the country, secured the second position among all NBFIs by the end of 2022, maintaining its status as a champion among full-fledged NBFIs with a diversified business portfolio, earning a score of over 73.

EBL Securities analysts considered earnings per share, cost-to-income ratio, returns on equity, return on asset, operating profit margin, net interest margin, NPL control, and dividend yields as their evaluation criteria.

IPDC Finance, the fastest-growing NBFI that went through a significant transformation since the world’s largest non-governmental organisation BRAC acquired its major stake eight years back, stood second among the diversified NBFIs and fourth among all, securing a score of 59.73.

Bangladesh Finance, another NBFI going through a transformation in its business model and way of operations stood fifth among all as it scored 43.51.

Lanka Bangla Finance, the second largest NBFI, stood sixth as the devaluation of Taka last year hurt its financial performance to some extent by inflating its foreign currency liabilities.

United Finance with a score of 40.17 stood seventh among all NBFIs.

State-owned Investment Corporation of Bangladesh despite its 27.3% NPL managed to secure the eighth spot with a poor score of 27.4 out of 100.

In contrast, devastated firms such as International leasing or First Finance scored near to zero amid much more liabilities than assets.

In financial business, there may come short-term dents during adverse economic situations when borrowers’ payback declines or deposit becomes expensive to squeeze profit margin, said IPDC Managing Director and CEO Mominul Islam.

However, “Financial firms having strong risk management and good governance practices overcome and chase their vision,” he added.

He attributed his firm’s superior position to the socially committed business model and the priorities for sustainable growth.

National Housing MD and CEO Mohammad Shamsul Islam believes corporate governance and transparency are the biggest strengths of his firm which translates into financial strength.

Bangladesh Finance, once lagging due to investment losses, higher NPL in the dominant large corporate loans segment might not have appeared in the top ten if the ranking had been done before the pandemic.

Its MD and CEO Md Kyser Hamid thanked the transformation program it embraced during the pandemic for a stable business and efficient operations.

Hamid, also the vice chairman of the Bangladesh Leasing and Finance Companies Association, said less bank borrowing and more customer deposits, less large loans and more small loans, technology dependency for efficient, transparent operations alongside more partnership with a wide range of actors have been proved to be the winning tools in his industry.

DBH Finance PLC MD and CEO Nasimul Baten believes that the quality of loans disbursed and better liquidity is the preparation to pay back depositors at once together make the key difference and his firm in the last 18 years kept controlling the NPL within 1%.

The NBFI industry was facing an even harder time in the first six months of 2023 due to record low-interest rate spreads as deposit rates went higher and their lending rate was capped until the beginning of July, said Hamid.

NBFI industry’s net interest income, net profit, return on equity and assets and spread everything dropped in the first half of 2023.

Except for the two housing finance providers, each of the top NBFIs had a lower score at the end of June, if compared to that of six months ago.

However, the new central bank method for setting a dynamic cap for lending rate helped create a breathing space, he added.

Each of the CEOs was optimistic that with the economic hurdles over the well-governed firms would come back with higher profitability.

Echoing them, EBL Securities’ Rayhan Ahmed said the central bank’s execution of a market-based lending rate and governance enhancement initiatives could bring promising signs for a potential turnaround of the NBFI sector.


Source: The Business Standard


Three corporate directors sell off entire Islami Bank holding

Armada Spinning Mills, Kingsway Endeavors, and Uniglobe Business Resources withdrew directorship from the bank’s board

Three corporate shareholders – Armada Spinning Mills, Kingsway Endeavors, and Uniglobe Business Resources – withdrew their directorship from the Islami Bank board in June after selling off their entire holding in the country’s largest private sector lender.

It comes a month after the Investment Corporation of Bangladesh (ICB) sold its entire shareholding in the bank in May and withdrew its nominated director.

As a result, the Islami Bank’s shareholding by sponsors-directors came down to 41.90% at the end of June from 55.06% in December last year, according to a report on the monthly shareholding position for June submitted to the chief regulatory officer of the Dhaka Stock Exchange (DSE) on 5 July.

And in June, JMC Builders bought 2.01%, or 3.23 crore, of the bank’s shares. Ahsanul Alam, son of S Alam Group Chairman Saiful Alam Masood, has been appointed as a shareholder director of the bank as a nominee of JMC Builders.

Currently, he is serving Islami Bank Bangladesh Limited as its chairman.

Market insiders said the bank’s shares were traded in the block market of the DSE. And that is why there have been some big transactions in the bank’s shares in the last three months.

TBS correspondents called Mohammed Monirul Moula, managing director of Islami Bank, for his comments, but he did not pick up his phone. Later, a message was also sent to his mobile phone, but he did not respond.

Who exited the board

Since April this year, four institutions that were corporate directors on the board of the Islami Bank have exited the board as they have sold their entire holding in the bank, according to a monthly shareholding report of the bank.

The Armada Spinning Mills, which held 2.01%, or 3.24 crore shares, sent a letter to the bank on 18 June to withdraw its directorship. Professor Nazmul Islam was director on behalf of the Spinning Mills, and the bank approved the decision on 19 June at its board meeting.

Kingsway Endeavors, which held 4.39%, or 7.07 crore shares, also wrote to Islami Bank on 13 June seeking to withdraw its directorship. Salim Uddin was director on behalf of the firm, and the bank approved the decision on the same day.

Uniglobe Business Resources held 4.67%, or 7.52 crore shares, in the bank, where it sold the entire holding and withdrew the directorship.

It also sent a letter to the bank to withdraw the directorship. Major General (retd) Abdul Matin was director on behalf of the firm, and the bank approved the decision in the board meeting.

Besides, Islami Bank’s another sponsor Islamic Development Bank changed its nominee director, which was subject to the approval of the Bangladesh Bank.

Big trade in the block market

According to DSE data, since April this year, a large amount of Islami Bank’s shares have been transacted through the block market.

A total of 14.63 crore shares buy-sell, whose value is Tk477 crore. The TBS identified the seller but did not confirm the buyer.

However, the United Arab Emirates-based BTA Wealth Management, the lone buyer to be identified, bought over 2% stake—3.42 crore units of shares—in the bank at a cost of Tk111 crore as the leading private-sector lender.

On Sunday, Islami Bank’s shares traded for over Tk84 crore in the block market at Tk32.60 each.

Among the foreign sponsors, the Saudi Arabia-based Al-Rajhi Co for Industry and Trade, Islamic Development Bank, and Arabas Travel and Tourist Agency jointly hold a 22.04% stake in Islami Bank.

Among general shareholders, foreign investors own another 24.49% share of the bank till June, which was 20.23% in May.

Besides, four Middle East-based sponsors – Bahrain Islamic Bank, Islamic Development Bank, Kuwait Finance House, and Dubai Islamic Bank – sold off or reduced their holdings in the bank since 2015, stock market sources said.

Islami Bank’s profit increased by 28% year-on-year to Tk616 crore in 2022.

In that year, its earnings per share were Tk3.84, which was Tk2.99 a year ago.

The bank paid a 10% cash dividend to its shareholders for 2022.

In the January-March quarter, its profit fell by 32% year-on-year to Tk57.12 crore.


The ‘Z’ chaos in the stock market

BSEC in November 2020 prohibited stocks category downgrading and the order to the bourses was never repealed. Now it asks DSE to explain why some sick companies were not placed in the “Z” category

Infographic: TBS

Infographic: The Business Standard

Bourses and stock investors, over the last two weeks, have seemed too puzzled to conclude when a listed company should be punished as a so-called “Z” category stock and when it should not be.

They were finding too many deviations between the regulations and the ongoing practices.

At least 23 of the listed firms were clearly deserving of being downgraded to “Z” much earlier last fiscal year, according to the 1 September 2020 notification by the Bangladesh Securities and Exchange Commission (BSEC) that relaxed the criteria for the companies to be placed in the “Z” category.

Surprisingly, each was still trading as superior “A” or “B” category-company shares until the puzzled bourses, responding to some criticism, downgraded five of them on 25 June, creating another sudden shock for the investors as downgrading to “Z” means inconveniences in secondary market trading and a price fall.

On the following day, the BSEC asked the Dhaka Stock Exchange to explain why each of the 23 companies was not regularly reviewed and placed in the “Z” category.

“We have already replied to the regulator’s letter,” said M Shaifur Rahman Mazumdar, acting managing director at DSE.

Following the 2020 regulations change, there had been some confusion regarding downgrading listed companies to “Z” and the DSE had been seeking BSEC approval for downgrading companies to “Z” in eligible cases, he said, declining requests for further details.

TBS, however, saw an unpublished BSEC letter written to both the bourses of Dhaka and Chattogram in November 2020 that prohibited category downgrading, and the order was never repealed later.

This was the key to all the false appearances of sick companies’ categories on the bourses, said officials at the stock exchanges, seeking anonymity.

“The BSEC order barred us from downgrading companies, and now we have to show cause,” said one of them.

The relaxations of 2020 were for the greater interest of the capital market, listed firms, and their investors amid an unusual situation during the pandemic, and they were mainly exempting firms’ accidental tough times in paying dividends, not every single non-compliance, said BSEC Executive Director and Spokesperson Rezaul Karim.

“Seeking explanation is part of the regulator’s daily job, and if the explanations are satisfactory, there should emerge solutions to exceptional problems,” he added.

BSEC also asked both the DSE and the Chittagong Stock Exchange (DSE) on Wednesday to explain why they did not monitor, act on, and report on the Z-category companies.

Since the November letter, no company went to the Z category until 25 June, said DSE-CSE officials.

“What should we report when no company entered into Z?” said one of them.

Listed companies that fail to stay in operations, hold an annual general meeting, or pay dividends within stipulated time used to be categorized as “Z” by the bourses, eying a comparative inconvenience in trading of their shares through allowing no leveraged trading and a longer settlement cycle and, of course, a weaker image among investors.

BSEC, in a September 2021 notification prior to the November, 2020 letter to the bourses, said no cash dividend, negative operating cash flow for two straight years, negative net asset value, no AGM in six months of the fiscal year ending despite no legal complexity, no operations for more than six months despite no factory modernization project could result in downgrading to “Z” with the regulator’s prior approval.

Source: The Business Standard


Navana Pharma to convert 60% of Tk150cr bond into shares

The bond will be issued for five years, and the conversion process will start in the third year

Navana Pharmaceuticals Limited is going to issue a Tk150 crore bond and wants to convert 60% or Tk90 crore of the bond into shares.

The company said in a statement that it will issue the bond for five years, and the conversion process will start in the third year.

As per its plan, the company will convert 20% of the bond into shares each year starting from the third year till the fifth.

To convert into shares, the company will seek shareholders’ approval by holding an extraordinary general meeting (EGM) on 31 July.  After shareholders’ approval, the company will seek the securities regulator’s consent.

The bond amount will be used for repaying its existing bank loans, which totalled to Tk330 crore as of 31 March.

The company has repaid Tk21.18 crore in bank loans out of the Tk75 crore capital it collected from the investors through an initial public offering (IPO) last year.

Meanwhile, Navana Pharma is going to renovate its existing production line instead of setting up new facilities with funds raised from the capital market.

According to the IPO prospectus, Tk23.24 crore was allocated for setting up a new production plant.

But the company now plans to invest Tk25.57 crore for modernisation and expansion of the existing facilities. The rest of the investment will come from its own funds.

In the scheduled EGM, the company will seek shareholders’ approval of its change of IPO utilisation plan too.

Navana Pharmaceuticals shares, having a face value of Tk10 apiece, fell by 2.84% to Tk112.7 at the Dhaka Stock Exchange on Thursday.


মিউচুয়াল ফান্ডের সব ধরনের আয় করমুক্ত

শেয়ারবাজারে অনুমোদিত মিউচুয়াল ফান্ড, এক্সচেঞ্জ ট্রেডেড ফান্ডসহ চার ধরনের তহবিলের যেকোনো ধরনের আয় করমুক্ত থাকবে। নতুন আয়কর আইনে এ বিধান যুক্ত করা হয়েছে। মিউচুয়াল ফান্ড ও এক্সচেঞ্জ ট্রেডেড ফান্ড ছাড়াও বিকল্প বিনিয়োগ তহবিল ও রিয়েল এস্টেট ইনভেস্টমেন্ট ট্রাস্টের যেকোনো ধরনের আয় এ সুবিধা পাবে।

মিউচুয়াল ফান্ড পরিচালনার সঙ্গে যুক্ত একাধিক সম্পদ ব্যবস্থাপক প্রতিষ্ঠানের শীর্ষ নির্বাহী প্রথম আলোকে বলেন, দীর্ঘদিন ধরে মিউচুয়াল ফান্ডের যেকোনো ধরনের আয় করমুক্ত সুবিধা পেয়ে আসছিল।

কিন্তু গত বছর জাতীয় রাজস্ব বোর্ডের (এনবিআর) জারি করা নির্দেশনার কারণে তালিকাভুক্ত কিছু কোম্পানি মিউচুয়াল ফান্ডের প্রাপ্য লভ্যাংশ বিতরণের সময় কর কেটে রাখছিল। এতে এ নিয়ে বিভ্রান্তি দেখা দেয়। নতুন আয়কর আইনে বিষয়টি অন্তর্ভুক্ত করার ফলে এ নিয়ে বিভ্রান্তির অবসান হবে।

এ বিষয়ে ভিআইপিবি অ্যাসেট ম্যানেজমেন্টের প্রধান নির্বাহী কর্মকর্তা শহীদুল ইসলাম প্রথম আলোকে বলেন, নতুন এ সিদ্ধান্তের ফলে এখন থেকে কোনো মিউচুয়াল ফান্ড তালিকাভুক্ত কোনো কোম্পানিতে বিনিয়োগ করে যে লভ্যাংশ পাবে, সে ক্ষেত্রে লভ্যাংশ বিতরণকারী কোম্পানি কোনো কর কেটে রাখতে পারবে না। এর ফলে মিউচুয়াল ফান্ডের আয় বাড়বে। তবে মিউচুয়াল ফান্ডগুলো যখন বিনিয়োগকারীদের লভ্যাংশ বিতরণ করবে, তখন ব্যক্তিশ্রেণির বিনিয়োগকারীদের ক্ষেত্রে ১০ শতাংশ ও কোম্পানি বিনিয়োগকারীর ক্ষেত্রে ২০ শতাংশ কর কেটে রাখবে।

শেয়ারবাজারের মিউচুয়াল ফান্ডের আয়ের কয়েকটি খাত রয়েছে। সেগুলোর মধ্যে উল্লেখযোগ্য হলো ব্যাংকে টাকা রেখে সুদ আয়, তালিকাভুক্ত কোম্পানিতে বিনিয়োগের বিপরীতে লভ্যাংশ আয়, বন্ডে বিনিয়োগের বিপরীতে কুপন বা সুদ আয়। আর তালিকাভুক্ত কোম্পানির শেয়ারে বিনিয়োগ করে মূলধনি আয় বা ক্যাপিটাল গেইন। এখন থেকে এসব আয় পুরোপুরি করমুক্ত থাকবে বলে নতুন আয়কর আইনে বলা হয়েছে।

বাজার পরিস্থিতি

মিউচুয়াল ফান্ডের যেকোনো ধরনের আয়কে করমুক্ত রাখা হলেও বাজারে তালিকাভুক্ত মিউচুয়াল ফান্ডের ক্ষেত্রে তার কোনো প্রভাব দেখা যায়নি গতকালের বাজারে। এদিন লেনদেন হওয়া বেশির ভাগ মিউচুয়াল ফান্ডের ইউনিটের দাম অপরিবর্তিত ছিল। কারণ, এসব ফান্ডের ইউনিটের দাম পুঁজিবাজার নিয়ন্ত্রক বিএসইসির বেঁধে দেওয়া সর্বনিম্ন মূল্যস্তর বা ফ্লোর প্রাইসে আটকে আছে।

ঢাকার বাজারে গতকাল রোববার লেনদেন হওয়া ৩৫৪ প্রতিষ্ঠানের মধ্যে ১৭৬টিরই দাম অপরিবর্তিত ছিল। দাম বেড়েছে মাত্র ৬৪টির আর কমেছে ১১৪টির। এর ফলে এদিন বাজারের সূচক ও লেনদেনও কমেছে। দেশের প্রধান শেয়ারবাজার ঢাকা স্টক এক্সচেঞ্জের(ডিএসই) প্রধান সূচক ডিএসইএক্স ১১ পয়েন্ট কমে দাঁড়িয়েছে ৬ হাজার ৩৪২ পয়েন্টে। দিন শেষে ঢাকার বাজারে লেনদেনের পরিমাণ ছিল ১ হাজার ৩১ কোটি টাকা, যা আগের দিনের চেয়ে ৩৩ কোটি টাকা কম।

সূত্রঃ প্রথম আলো


Next fiscal year to see higher allocation for gross subsidy

Bangladesh national budget allocation 2023-24

Infographic: TBS

Despite increasing the prices of fertilisers, electricity and gas, the next fiscal year (FY2023-24) will see an additional allocation for gross subsidies to adjust to the amount required in excess of the allocation for the current fiscal year.

However, the net subsidy will be less in the next fiscal year, finance officials have said.

In the current fiscal year’s budget, the government allocated Tk81,490 crore for subsidies, stimuluses and cash loans. In the budget of the next fiscal year, the total allocation for these sectors may be increased to Tk1,05,000 crore. While the amount of net subsidy in the new fiscal year has not increased, additional allocation is being kept mainly to meet the subsidy arrears of the current fiscal year.

The visiting IMF team, reviewing the implementation of the loan conditions, has accepted this move of the ministry of finance to adjust the subsidy spending.

An official of the Finance Division told The Business Standard that the IMF mission raised questions about increasing the subsidy allocation in the next fiscal year’s budget.

“We have informed them that the amount of net subsidy will be much less in the next fiscal year compared to this year. However, the amount of money that needs to be allocated to handle the subsidy pressure this year, could not be allocated. As a result, there are arrears in various sectors, which will be met by allocations in the budget of the next fiscal year,” said the official.

As per IMF loan conditions, the current fiscal year allocation for agriculture, food and export subsidies, social security, pension and gratuities is Tk1,82,600 crore. In the budget of the next fiscal year, the allocation will be Tk1,82,300 crores.

But in the next fiscal year’s budget, apart from subsidies, export incentives, allocation for pensions, interest on savings certificates and social security will be around Tk2,30,000 crore.

Finance Division officials said that in the budget of the current fiscal year, the allocation for subsidy in the power sector was Tk17,000 crore. Electricity prices have been hiked three times after the power department demanded an additional subsidy of Tk32,500 crore.

This has saved the government Tk9,200 crore. On the other hand, the revised budget increased the allocation for subsidy to the power sector to Tk23,000 crore.

Which means, the power sector needed a total subsidy of Tk49,500 crore this year and the power sector is getting Tk31,200 crore after price increase while the additional subsidy remains due.

After increasing the price three times this time, the price of electricity will increase again by next June. This will reduce the net subsidy demand next year. But due to the arrears of this year’s subsidy, around Tk25,000 crore is being kept in the new budget to pay it.

Same is the case with fertilisers. In the budget for the last fiscal year, there was an allocation of Tk9,100 crore for subsidies in agriculture. But the increase in fertiliser prices required a subsidy of Tk28,000 crore in the last fiscal. In last year’s revised budget, Tk15,173 crore has been allocated for the subsidy on agriculture. As a result, last year’s agricultural subsidy was also deficient.

Tk16,000 crores have been allocated for agriculture for this year. But the agriculture ministry sought an additional subsidy of Tk40,247 crore. That is, in total, Tk56,247 crore rupees are needed to meet the subsidy in the agricultural sector this year. But in the revised budget, the allocation was increased to Tk26,000 crores. As a result, a large part of this year’s agricultural subsidy remains arrears.

The government has already decided to increase the price of all types of fertilisers by Tk5 per kg saving Tk7,000 crore. As a result, the demand for subsidies will decrease in the new fiscal year. But to meet the arrears, the amount of agricultural subsidy may be increased to about Tk27,000 crore in the next fiscal year.

Finance Division officials said due to the increase in the prices of fuel oil, fertilisers, food products and gas in the international market due to the Ukraine-Russia war, the subsidy demand of various ministries in the current fiscal year is more than double the total allocation. As a result, the ministries have claimed a total subsidy of Tk1,86,595 crore in the current fiscal year.

Finance ministry officials said that despite increasing the allocation in the revised budget, apart from increasing the prices, subsidies of about Tk50,000 crore remain outstanding in various sectors this year, except for fuel oil, which the ministries are unable to pay due to lack of allocation.

Finance Division officials said that in the budget of the current fiscal year, about Tk5,995 crores were allocated for food subsidy and in the revised budget, an additional allocation of Tk812 crores was kept. An allocation of Tk8,000 crore has been estimated for food subsidy in the coming fiscal year.


Floor price to stay until DSEX tops 6,500 points

The securities regulator will not risk lifting the floor price until the main index at the Dhaka Stock Exchange (DSE) goes past 6500 points “in the interest of small investors who are a majority in the stock market”, said the head of the Bangladesh Securities and Exchange Commission (BSEC).

The DSEX rose by 0.16 per cent to settle at 6206.80 points at the end of last Thursday’s trading.

Removal of floor price will lead to price erosion of securities in margin accounts, he said, adding that small investors would then fall victim to margin calls.

In an exclusive interview with the FE, BSEC Chairman Shibli Rubayat Ul Islam said big and institutional investors would take advantage of the price erosion in absence of the floor price while retail investors would endure losses.

“They will face forced selling [of stocks] by lenders,” he added.

Margin accounts have assets purchased with funds belonging to both investors and brokerage firms. So, an investor’s equity is the total value of the securities in the margin account minus the money borrowed from brokerage houses.

As per the rules, a lender shall request his client to provide additional capital or securities if his margin account falls below 150 per cent of the debit balance. The lender shall not permit any new transactions unless the equity is equivalent to at least 150 per cent of the debit balance.

If a margin account falls below 125 per cent of the debit balance, the lender without informing its client can sell assets to meet the margin call.

The index may come down to settle at 6,000 points if the floor price is withdrawn after it reaches 6,500 points, said Mr Islam. “The index is now at 6,200 points. It will fall to 5,500 points if the floor price is withdrawn at this moment.”

The BSEC chairman pointed the finger at institutional investors for the sorry state of the market.

He said that instead of supporting the market now, institutions were waiting to grab the holdings of small investors at lower prices after the removal of floor price.

Mr Islam said investments made by banks have declined to 15 per cent or even lower. For example, Dutch-Bangla Bank now has market exposure at around 4 per cent, he said.

Banks can invest in listed securities up to 25 per cent of their equity on a solo basis and 50 per cent on a consolidated basis, according to the Bank Companies Act. In August 2022, the central bank allowed the banks to calculate their exposure at the purchase price instead of the market price following pleas from a section of stakeholders.

Responding to a query, the BSEC chief said the amount borrowed by small investors in the form of margin loans was greater than that of big investors.

The securities regulator imposed the floor price for the first time in March 2020 to protect the market from going into free fall against the backdrop of the pandemic.

It was then lifted in phases from April 2021.

Later, the price restriction was re-imposed in July 2022 for economic uncertainties ushered in by the Russia-Ukraine war. The restriction was partially removed from 169 stocks in December last year.

On March 1, the regulator reinstated floor price for the 169 securities.

“I am willing to lift floor price at a stage when investors will not be distressed by margin calls,” said the BSEC chief.

The issues surrounding the price restriction will be solved if inactive investors become active, he said, referring to high net-worth and institutional investors. “The floor price will be ineffective if the stock prices go up” due to participation of investors with high investment capacity.

Investors, who can inject fresh funds, should not consider the floor price as a barrier, said the BSEC chairman.

He, however, ruled out that the regulator was fixated on the rise and fall of the index. “But safety of investors is our concern.”

“The Ordinance [Securities and Exchange Ordinance 1969] has mandated us to ensure safety of investors. In no way we can bypass the Ordinance.”

Source: The Finencial Express


Labaid Cancer Hospital plans to go public

It will be the second hospital after Samorita to go public

Labaid Cancer Hospital plans to go public

Labaid Cancer Hospital and Super Specialty Centre, a sister concern of Labaid Diagnostic Centre, is planning to come to the stock market to raise fund.

This will be the second hospital to go public after Samorita Hospital, which got listed with the Dhaka Stock Exchange in 1997.

Labaid Cancer Hospital has already signed a corporate advisory and issue management agreement with City Bank Capital, a merchant bank, officials of the companies told The Daily Star.

City Bank Capital will also act as the issue manager for the planned initial public offering of the hospital.

Labaid Cancer Hospital plans to go public

Ershad Hossain, managing director and CEO of City Bank Capital, and Sakif Shamim, managing director of Labaid Cancer Hospital, pose after signing a corporate advisory and issue management agreement at City Bank Capital’s headquarters in Dhaka today. Photo: Collected

Ershad Hossain, managing director and CEO of City Bank Capital, and Sakif Shamim, managing director of Labaid Cancer Hospital, signed a deal in this regard at City Bank Capital’s headquarters in Dhaka today.

The healthcare sector needs huge capital expenditure and the capital market has the scope to supply it, so the cancer hospital is planning to raise fund from the market, Hossain said.

Labaid Cancer Hospital has huge growth potential, so City Bank Capital has agreed to give the service, he added.

The 14-storey modern building facility of the hospital has over 150 inpatient beds, emergency facilities, intensive care unit, dialysis and palliative care, according to the website of the hospital.

It has the facility of chemotherapy, radiotherapy, brachytherapy, immunotherapy and hormonotherapy and dedicated modern laboratory for cancer diagnosis, it added.

Labaid is an around 35-year-old company and it has an intrinsic value, said Shamim of Labaid Cancer Hospital, the initial investment of which was Tk 500 crore.

“We want to go for the IPO for its value creation.”

The hospital has the potential to grow further and it has plans to go for expansion, he added.


টানা ৪ বছর ধরে বিক্রি ও নিট মুনাফা কমছে ড্যাফডিল কম্পিউটার্স এর

সর্বশেষ চার বছর ধরে টানা বিক্রি ও কর-পরবর্তী নিট মুনাফা নিম্নমুখী পুঁজিবাজারে তালিকাভুক্ত তথ্যপ্রযুক্তি খাতের কোম্পানি ড্যাফোডিল কম্পিউটার্স লিমিটেডের। এ সময়ে প্রতি বছরই আগের বছরের তুলনায় কোম্পানিটির বিক্রি ও নিট মুনাফা কমেছে। এমনকি চলতি ২০২২-২৩ হিসাব বছরের দ্বিতীয় প্রান্তিকে (অক্টোবর-ডিসেম্বর) কোম্পানিটির বিক্রি সামান্য বাড়লেও নিট মুনাফা কমতে দেখা গেছে।

কোম্পানির আর্থিক প্রতিবেদন অনুসারে, ২০১৮-১৯ হিসাব বছর থেকে টানা ব্যবসা কমতে দেখা গেছে ড্যাফোডিল কম্পিউটার্সের। আলোচ্য হিসাব বছরে কোম্পানিটির বিক্রি হয়েছে ৬০ কোটি ১২ লাখ টাকা। আগের হিসাব বছরে এ বিক্রি ছিল ৬৯ কোটি ১ লাখ টাকা। আলোচ্য হিসাব বছরে কোম্পানিটির গ্রস মুনাফা হয়েছে ১৭ কোটি ৩৯ লাখ টাকা। আগের হিসাব বছরে এ মুনাফা ছিল ২৩ কোটি ১৭ লাখ টাকা। আর ২০১৮-১৯ হিসাব বছরে কোম্পানিটির কর-পরবর্তী নিট মুনাফা হয়েছে ৭ কোটি ৩৩ লাখ টাকা। আগের হিসাব বছরে নিট মুনাফা হয়েছিল ১০ কোটি ৯১ লাখ টাকা।

আলোচ্য হিসাব বছরের ধারাবাহিকতায় পরের বছর অর্থাৎ ২০১৯-২০ হিসাব বছরে কোম্পানিটির বিক্রি আরো কমে হয়েছে ৫৫ কোটি ৯ লাখ টাকা। এ বছরে কোম্পানিটির গ্রস মুনাফা হয়েছে ১৫ কোটি ৬৯ লাখ টাকা। আর বিভিন্ন খরচ শেষে কোম্পানিটির কর-পরবর্তী নিট মুনাফা হয়েছে ৪ কোটি ৫৫ লাখ টাকা। ২০২০-২১ হিসাব বছরে কোম্পানিটির বিক্রি আরো কমে হয়েছে ৪৮ কোটি ১৪ লাখ টাকা। এ বছর গ্রস মুনাফা হয়েছে ১৪ কোটি ১১ লাখ টাকা। আর বিভিন্ন খরচ শেষে কর-পরবর্তী নিট মুনাফা হয়েছে ৩ কোটি ৪৮ লাখ টাকা।

সর্বশেষ ২০২১-২২ হিসাব বছরে কোম্পানিটির বিক্রি আগের বছরের তুলনায় ২ লাখ টাকা কমে হয়েছে ৪৮ কোটি ৩৫ লাখ টাকা। এ সময়ে কোম্পানিটির বিক্রি কমেছে শূন্য দশমিক ৪৩ শতাংশ। আলোচ্য হিসাব বছরে কোম্পানিটি গ্রস মুনাফা হয়েছে ১৩ কোটি ৮৮ লাখ টাকা। আগের বছরের তুলনায় সর্বশেষ বছরে কোম্পানিটির কর-পরবর্তী নিট মুনাফা কমেছে ১৩ লাখ টাকা বা ৩ দশমিক ৮০ শতাংশ।

এদিকে চলতি হিসাব বছরের দ্বিতীয় প্রান্তিকে কোম্পানিটির বিক্রি হয়েছে ৯ কোটি ৬৪ লাখ টাকা। আগের হিসাব বছরের একই সময়ে এ আয় ছিল ৯ কোটি ৪৫ লাখ টাকা। এক বছরের ব্যবধানে কোম্পানিটির বিক্রি সামান্য বাড়লেও কর-পরবর্তী নিট মুনাফা শূন্য দশমিক ৭২ শতাংশ কমে হয়েছে ৮৭ লাখ টাকা। আগের হিসাব বছরের একই সময়ে কোম্পানিটির নিট মুনাফা ছিল ৮৮ লাখ টাকা।

Source:  Daily Bonik Barta

1% lower limit lifted, floor re-imposed for the 169 scrips

Infograph: TBS

Infograph: TBS


  • Now the 169 scrips’ prices can fall up to 10% a day until hitting the floor price
  • Of the 168 scrips, one mutual fund was delisted in the meantime
  • Asia Insurance and Far Chemical were added
  • New floor will be equal to the average of closing prices from 26 Feb to 1 Mar
  • But if the previous floor is lower for any of the 169 scrips, that one will be considered as floor

In an effort to end an ineffective downside restriction, the Bangladesh Securities and Exchange Commission (BSEC) reinstated the floor price for 169 small-cap scrips on Wednesday.

On 21 December 2022, the market regulator removed the floor for 168 stocks and restricted their daily fall limit to 1%.

As a result of the repeal of that order, the prices of those scrips can fall up to the regular lower circuit breaker limit – 10% a day – until hitting the floor price.

Of the 168 scrips, one mutual fund was delisted in the meantime, and the regulator added Asia Insurance and Far Chemical, making it a list of 169 scrips in total.

Now, the average of the closing prices of those 169 scrips for four trading sessions – 26 February to 1 March – would be their new floor prices, according to the BSEC’s 1 March order.

But if the previous floor price, that was announced on 28 July last year, is lower than the new floor, then the lower one would be effective, according to the order.

The 169 scrips represent roughly 5% of the market capitalisation of all the listed scrips in the Dhaka Stock Exchange (DSE).

Stockbrokers and investors said the commission’s 21 December move to withdraw the floor from 168 scrips was a blow to a large number of investors, as 100 of those scrips lost their market value as of 1 March, including the 39 that fell by 20%-35%.

The worst part of the fall was investors were unable to exit from the falling knives as there had been no buyers due to the narrow bottom circuit, investors said.

However, 27 of the scrips were above the 28 July floor on 1 March, and the remaining were flat as the minimum tick price gap was higher than 1% of the scrips’ market prices.

The smallest gap between two prices of a share or mutual fund is Tk0.1 in the DSE and CSE.

The floor prices and the narrowed down lower circuit drastically affected the liquidity in the bourses, as investors were deprived of exit opportunities regardless of whether they needed money to withdraw from investment accounts, or to buy any other security.

When buyers wait for a scrip’s price to fall, they refrain from bidding for it. And at an extreme point of pessimism, the number of DSE scrips having bidders dropped drastically to 62, and 337 of the 399 DSE shares, mutual funds and corporate bonds had no buyer.

However, as the regulator on Sunday and Monday busted market rumours that it might withdraw the floor price from another set of scrips, the market started to recover and 138 scrips had bidders during the closing bell on Wednesday.

79 of the 169 scrips came back in active trading, up from only 15 on Sunday, while of the 232 scrips with intact floor, 173 were stuck there and 59 were trading above floor on the day.

How the market performed on Wednesday

Meanwhile, the daily transaction increased to over Tk450 crore, which fell below Tk300 crore a day during the decline last week.

DSEX, the broad-based index of the Dhaka Stock Exchange (DSE), from its recent bottom of 6,175 on Monday morning, hit 6,234 in the middle of Wednesday session. But adamant sellers dragged the index down to even lower than the previous close.

“The market saw mixed reactions as the session began with an upbeat momentum, but the morning optimism faded as risk-averse investors booked profits, enticed by the recent price appreciation of selective issues,” said EBL Securities in its daily market commentary.

DSEX finally closed at 6,214 which was 0.04% lower, and out of the total DSE scrips, 68 advanced and 80 declined.

“However, opportunist investors continued to take positions in beaten down issues with anticipation of quick gains since they expect positive momentum in the market, as the floor price is likely to be intact for the foreseeable future,” added the brokerage firm in its commentary.

On the sectoral front, IT contributed the maximum 16.2% of the DSE turnover, followed by life insurance and food.

As the late hour selloff wiped out the early hour intraday gains, most of the sector displayed mixed returns at the end.

General insurance registered the highest gain of 1.5%, followed by life insurance and tannery.

Paper with 2.4% correction led the losers, followed by travel and jute sectors.

Source: TBS News