Friday, April 29, 2011

MJL sweetens offers for listing

Dhaka, April 29: The Securities and Exchange Commission could not decide on the listing of MJL Bangladesh Ltd yesterday, as the listing conditions are yet to be settled.

The SEC, Dhaka Stock Exchange, Chittagong Stock Exchange and MJL discussed the listing issue yesterday in a meeting, chaired by SEC Chairman Ziaul Haque Khondker. MJL put forward two offers in an effort to list on the bourses.

The offers are cash dividends to primary shareholders and compensation to investors if the share prices go below the offer price within the first six months of trading, an SEC official said.

In its next move, the company might offer more than 100 percent cash dividends and 15 percent to 20 percent compensation to the shareholders, the SEC official added.

"After approval from the board meeting we will submit a letter to the SEC," said Azam J Chowdhury, managing director of MJL. "We are very optimistic about the listing," he added.

Meanwhile, stocks returned to the red yesterday as the investors became nervous on the current market situation.

The benchmark general index of Dhaka Stock Exchange lost 32 points, or 0.53 percent, to close at 6,050 points, while the selective categories index of Chittagong Stock Exchange slumped 28 points, or 0.25 percent, to 10,913.

"Dhaka stocks started on a positive note adding more than 100 points but turned bearish as the session progressed. Investors are yet to be confident as many recommendations of probe report are still pending," said Lankabangla Securities in its daily market analysis.

Of the total 252 issues traded on the DSE floor, 181 declined, 68 advanced and three remained unchanged. Turnover on the DSE stood at Tk 666 crore, up Tk 159.31 crore from the previous day.

Source: The Daily Star

Restructure SEC: Prothom Alo roundtable

Dhaka, April 29: The issue of restructuring the Securities and Exchange Commission (SEC) once again came to the forefront at a roundtable in Dhaka yesterday on the back of its failure to regulate the stockmarket.

Unless the SEC is reformed with honest and capable people, the stockmarket would never be regulated properly and would face a stringent disaster in future, said the discussants who also urged the government to make the share market probe report public officially.

One of the discussants sought closure of the stockmarket until and unless the problems are sorted out and resolved.

They spoke at a roundtable on "Share market: what after the probe report?" organised by Bangla-language newspaper Prothom Alo. Abdul Kaium, joint editor of Prothom Alo, and Shawkat Hossain, joint news editor, moderated the roundtable, while Prothom Alo Editor Matiur Rahman delivered the opening remarks.

Faruq Ahmad Siddiqi, a former chairman of the SEC, said the commission, meaning its chairman and members, should be removed and replaced by efficient people.

"However, restructuring the SEC does not mean that everything will be changed. The surveillance remains the same for a Tk 2,000 crore turnover market as it was for a Tk 30 crore turnover market," he said referring to the inadequate workforce of the regulator.

At least three chartered accountants, two legal experts and one financial analyst should be included in the SEC's workforce. "But with the existing salary structure it cannot be expected. Separate payout structure, instead of government structure, should be there," he said.

Siddiqi said the probe report should be made public officially as it was also published in the media.

"What we saw in the report that it has served a lot of information such as where the weaknesses were and what actually happened," he said.

On the probe report's weakness, the career bureaucrat said the probe committee compared the recent debacle with the 1996 market crash and identified the primary market as a major reason for the debacle.

"I differ with the findings. Scope for price inflation in the primary market has been created due to overvaluation of shares in the secondary market," he said.

Debapriya Bhattacharya, distinguished fellow of the Centre for Policy Dialogue, said the delay in publishing the report is hurting the government's image that it revived through forming the probe committee. "Indecisiveness is worse than taking no decision," he said.

Bhattacharya identified the misuse of existing rules due to structural weakness of the regulator, lack of coordination among all economic systems, weak surveillance system in the market, and a narrow political mindset as major reasons behind the latest stockmarket crash.

He said it cannot be expected that the government will agree with all findings and recommendations of the probe committee. Whatever happens, he said, the current uncertainty over publishing of the probe report should be resolved.

Because of this, he said, neither the market nor the regulator can understand what should be done.

About reforms in the market, Bhattacharya said, "The reshuffle should have to be started from the SEC."

Arif Khan, managing director of Zenith Investments Ltd, said SEC should not be blamed wholesale; there must be some capable people.

"The market should be regulated only by the SEC, which also should be advised. People with integrity and managerial capacity within the commission can ensure it," he said.

Although many reasons were identified for the recent market disaster, no-one talks about the role of auditors who are responsible for making the financial statements, Khan said.

The role of Bangladesh Bank was not also discussed thoroughly. "As most of the commercial banks had exposure to the stockmarket, the market was flooded with enormous liquidity. But the central bank overlooked it," he said.

"The central bank was late in looking into the matter. If it curbed the banks' over-exposure timely, the market would not have faced this situation," he said.

Yawer Sayeed, managing director of AIMS of Bangladesh, said the crash in the stockmarket would not be possible without collusion of the regulator and its lack of knowledge.

"Every step was compromised. If there was no law, why issuance of preference shares was approved? How preference shares were issued with higher prices after rejection of rights issue proposal?" he questioned.

Shakil Rizvi, DSE president, said, "Synchronisation between the economy and capital market is needed to avoid another debacle in the capital market." Talking about the demutualisation of stock exchanges, he said, the process is going on. "It will take time."

AK Azad, president of Federation of Bangladesh Chambers of Commerce and Industry, said: "I request the government to form a taskforce to punish the market manipulators." He also said the anti corruption commission should investigate that who siphoned money out of the market.

"When the banks crossed the 10 percent exposure limit, Bangladesh Bank did not raise the issue. When the debacle started it asked the commercial banks to take funds out of the capital market," he said.

"The central bank will have to explain that why it avoided taking actions when the banks were overexposed to the capital market. I have a question for the probe committee: Why it avoided Bangladesh Bank's role?" he said.

Bangladesh Bank is trying to blame the general investors for the market debacle and that is not right, he said. "Bangladesh Bank is liable for the market crash in January."

He also said the commercial banks made hefty profit of Tk 2,000 crore from the capital market, and the commercial banks should invest their profits in the capital market.

Source: The Daily Star

Thursday, April 28, 2011

Stock Market Scam: Legal notice on Ibrahim Khaled to quit Krishi Bank

A Supreme Court lawyer yesterday served a legal notice upon Khondker Ibrahim Khaled, asking him to resign from the office of chairman of Bangladesh Krishi Bank within 10 days for disclosing the contents of stock market scam probe report to the media.

Khondker Ibrahim Khaled, head of the four-member probe committee, submitted the probe report to the finance minister on April 7. ATN Bangla, a private TV channel, aired his interview on this issue on April 7 and 8.

Advocate Md Abul Hashem in the notice said Khondker Ibrahim Khaled has made some objectionable comments regarding certain companies and individuals at different times in different electronic media.

"You (Ibrahim Khaled) deliberately and consciously got involved with character assassination of people and business organisations quoting from your so-called report and your such undesirable comments were not made in good faith and your terms of reference," the notice said.

It said that Ibrahim Khaled has intentionally disclosed the contents of the probe report, which is an absolute property of the government of republic, which is a violation of relevant laws.

Abul Hashem told The Daily Star that Ibrahim Khaled's earlier commented that steps should be taken against the people named in the probe report under the martial law. This is amount to inviting martial law in the country, Abul added.

He also said that he served the notice for the interest of people, and he will file a writ petition with the HC, seeking its direction on Ibrahim Khaled to resign from the post of chairman of Bangladesh Krishi Bank, if he does not do it within 10 days.

Advocate Syeda Afsar Jahan issued the notice on behalf of Abul Hashem.

Source: The Daily Star (28-04-11)

Tuesday, April 26, 2011

Make probe report public to stablise capital market, experts ask govt

Dhaka, April 26: Stock market analysts and experts have blasted the government for its foot-dragging over making January's stock scam report public and taking action based on it.

They observed that such a hush-hush stance on the issue by the government was leading the country's capital market to instability and volatility again.

On Monday, the DSE general index lost 212.34 points, triggering a fresh street protest by general investors. The index was at 6,540.60 points on April 7 when the probe committee handed over its report to the finance minister. On Monday, it stood at 5,863.97 points, losing 677 points in just two weeks.

The analysts and experts said as the government was frequently changing its stand on making the probe report public and as the finance minister was making pessimistic remarks about taking action based on the report, uncertainty among the invertors deepened and it turned into panic recently.

They also said that diverse statements made by stakeholders like Securities and Exchange Commission, Dhaka Stock Exchange, people named in the report as suspected manipulators and the probe committee chief were also making the investors jittery.  

Mirza Azizul Islam, former finance adviser of the interim government, said, 'Investors are in deep confusion about the possible government moves about the probe report as it is yet to come up with any specific indication on the issue.'

He said, 'The government should immediately make the probe report public as it is and also declare a possible course of action based on the report.'

Mirza Aziz, however, advised the investors not to be panicked.

Salahuddin Ahmed Khan, a Dhaka University finance teacher, said, 'At this stage the government should come up with an immediate action considering the interest of the market and investors.'

'Manoeuvres of the suspected manipulators might affect the market once again if the government makes delay in taking any move based on the probe report,' he said.

Akter H Sannamat, a capital market analyst, said, 'After Mondays' demonstrations, it seemed that the investors had become impatient.'

'Mondays' protest and recent volatility at the stock market are the result of the government's failure in handling the probe report,' he said.

Sannamat said, 'A precise action from the government is the only remedy in the current situation of the market.'

Head of the stock market probe committee Khodker Ibrahim Khaled on April 7 handed over the probe report to the finance minister Abul Maal Abdul Muhith. Muhith. On that day at a briefing at his office the finance minister said that the government would make the report public by deleting the names in it.

Source: New Age

Investors take to street again as stocks continue to plunge

Dhaka, April 26: Investors took to the street again on Monday and clashed with police in Motijheel protesting at the continuous fall in DSE share prices and the government's dilly-dally in publicising the probe report on recent stock market scam.

Angry investors from different brokerage houses descended on the busy road in front of the DSE building, halting traffic movement at around 12:30 pm after the general index of the DSE, or DGEN, fell by around 138 points in one and a half hours after the day's trading began at 11:00am.

The noisy crowds of investors set fire on paper and wooden boxes on the road and threw brickbats at different buildings on both sides of the road in downtown Motijheel, witnesses said.

The investors also chanted slogans against finance minister Abul Maal Abdul Muhith, Bangladesh Bank governor Atiur Rahman, Securities and Exchange Commission chairman Ziaul Haque Khandkar and DSE president Shakil Rizvi and demanded their resignation blaming them for the current spell of plunges in the DSE share prices.

They blamed Muhith for his continuous 'contradictory comments' on the situation of the market and his delay in making public the probe report on January's stock market debacle.

Police, however, dispersed the agitating investors by charging baton and chasing them to through different lanes and alleys in busy Motijheel area. Vehicular movement became normal again at around 1:30pm.

Because of heavy presence of police, investors left the area while the DSE general index slumped to one and a half month low to close at 5,863.97 points, losing 212 points on the day. 

The authorities deployed huge contingents of police in the area before the start of the trading sensing untoward incidents as anger was brewing among the investors for the last few days because of heavy slides in share prices after a government-formed investigation committee on April 7 submitted a probe report to Muhith on January's stock market debacle.

Since the probe committee, headed by Krishi Bank chairman Khandkar Ibrahim Khaled, submitted the probe report, the DGEN lost 676.63 points till Monday as investors became panicked because of continuous rumours surrounding the content of the probe report and possible government action. The DGEN was at 6,540 points on April 7.

The probe report named a number of large investors for their alleged involvement in the share market scam and a rumour spread that the large investors would force the market into a negative zone to create pressure on the government so that no action would be taken against them. Partial contents of the report were published by different newspapers.

Although the finance minister earlier said that he would make the report public and announce the government's course of action by seven days, the report is yet to be made public, giving opportunity a section of people to spread further rumours.

Abdul Matin, a protesting investor, told New Age that the finance minister had created a mystery by not publishing the report and trying to save the culprits. 'He [Muhith] is responsible for the current market slide. We are losing every thing,' he said.

Taib Ali, another investor, said that the continuous fall in share prices had given chances to the culprits to buy shares at lower prices. 'The market is still under their [suspected manipulators] control. What action the finance minister will take against them? They are roaming around with him,' he said.

Investors said that they had lost almost 30 percent of their capital in the latest slumps.

'We had been in heavy losses before the latest slump because of heavy plunges in January-March. Now our losses are compounding every day,' said Ashraf Hossain, another investor.

He said, 'The finance minister on Sunday claimed that the market was normal. His comments about the market are rubbish. He should not say anything about the market,' said an angry Ashraf.

Investors earlier also blamed Muhith, SEC chairman, BB governor and DSE president for the collapse of the market in January-March, when the DGEN came down to around 5,200 points in February from 8,900 points in December, 2010.

Source: New Age

Stock plunge sets off protests

Dhaka, April 26: A group of investors staged protests in front of the Dhaka Stock Exchange yesterday as the share prices nosedived sharply. The downward trend has been continuing for more than a week, except last Thursday.

The investors went for panic sell-offs from the opening hour of trading as most of them lost confidence following a debate on the stock probe report, said experts.

Speculations over the report created panic among small investors as they complained that the government is deliberately wasting time before making the report public, said one of the experts.

"The institutional investors also faced a credit crunch due to the tight money market, while some of them adopted a wait-and-see policy fearing another crash impending," said Akter H Sannamat, a market analyst.

Sannamat, also the former managing director of Prime Finance and Investment, said: "The government should take a series of good initiatives to help the investors restore their lost confidence."

The aggrieved investors started coming out of the trading houses around 12:30am when the market declined by around 140 points.

They set fire to vehicle tyres, wood blocks and paper in front of the DSE building blocking the avenue from Shapla Chattar to Ittefaq crossing and vandalised a motor bike.

The agitating investors also chanted slogans against the finance minister, top bosses of the premier bourse and demanded the resignation of the SEC chairman.

Investors demanded that the government publish the probe report as soon as possible and take action against those who are responsible for January's stock debacle.

Traffic returned to normal at 1pm after law enforcers intervened.

The benchmark general index of DSE lost 212 points, or 3.5 percent, to close at 5,863 points. The DSE index had lost 116 points on the opening day of the week.

The selective categories of index of Chittagong Stock Exchange slumped 404 points, or 3.64 percent, to close at 10,557 points.

Jewel Ahmed, an agitating investor said: "Small investors will leave the market if the government does not take any initiative to protect them."

"The government's unclear moves made us confused."

Lankabangla Securities said in its daily market analysis: "Frustration, fear and anxiety over the pending outcome of the probe report took a heavy toll on the market. As the opening bell rang, the market witnessed the gauge shedding blood and the situation exacerbated as the session progressed. Nervousness gripped the investors who offloaded shares in speculation of further index fall and prolonged bearish trend."

Some people deliberately made huge sell-offs to bring back another debacle to defame the government, said an SEC official.

The state run Investment Corporation of Bangladesh (ICB) bought shares of Tk 28 crore to halt the slumping trend of the market, he added.

Of the total 251 issues traded on the DSE floor, 237 declined, 11 advanced and three remained unchanged.

The low confidence also left its impact on the day's turnover, which came down to Tk 613 crore, down by Tk 18.1 crore from that of the previous day. The bank sector lost 3.09 percent, reaching 27.2 percent of the total market capitalisation, while non-bank financial institutions lost 4.46 percent.

Source: The Daily Star


Sunday, April 24, 2011

BD-Thai sues stock crash probe chief

Dhaka, April 25: BD-Thai Aluminium Ltd yesterday filed an appeal with a Dhaka court seeking scrapping of a part of the stockmarket scam probe report that accuses the company of siphoning off Tk 15 crore.

The aluminium products manufacturer also served a legal notice upon the probe committee asking them to pay Tk 100 crore in compensation for making "false" and "fabricated" statements about the company.

It termed the allegations "false, fabricated and unfounded" and requested the court to summon eight people including Khondkar Ibrahim Khaled, head of the stockmarket scam probe team, to explain the claims.

After hearing the appeal filed in the form of a case, Judge Aftabuzzaman of the Court of Second Assistant Judge, Dhaka asked Ibrahim Khaled and seven others to appear before it on June 12.

Advocate Abdus Selim Miah, law officer of the company, filed the case.

Ibrahim Khaled, chairman of Bangladesh Krishi Bank, submitted the stockmarket probe report to the finance minister on April 7.

He later told the media that they found evidence of BD-Thai siphoning off Tk 15 crore from the share market.

His statement appeared on different national dailies and tarnished the image of the company, BD-Thai said.

The eight defendants include the three other members of the probe committee -- Mohammad Abdul Bari, former president of the Institute of Chartered Accountants of Bangladesh; Toufic A Choudhury, director general of Bangladesh Institute of Bank Management; and Nihad Kabir, a Supreme Court lawyer.

The other defendants are the chairman of Securities and Exchange Commission, the director general of Foreign Commerce Control Department of Bangladesh Bank, the managing director of City Bank, and the chief executive officer of Dhaka Stock Exchange.

The legal notice of the company states that Khaled, a former deputy governor of Bangladesh Bank, in an interview with ATN Bangla TV channel said the committee got evidence of siphoning off Tk 15 crore by Gem Global in collusion with BD-Thai.

The interview was aired on April 7 and 8, it added.

BD-Thai also asked the members of the probe committee, which implicated top politicians and businessmen, to send a written apology to the company within 15 days for making the statements in their probe report.

In default, the company will file a suit for compensation of Tk 100 crore for making defamatory statements, the notice added.

AQM Sohel Rana, a lawyer of Dr Hamid and Associates, served the legal notice on behalf of BD-Thai, saying the interview of Ibrahim Khaled was mala fide, untrue, defamatory, and biased and damaged the social and business reputation of his client.

BD-Thai is one of the largest manufacturers of anodised and powder coated aluminium profiles, doors, windows, and curtain walls and allied items in Bangladesh.

Its share traded at Tk 875, down by 3.07 percent, on Dhaka Stock Exchange yesterday.

Source: The Daily Star

DSE plunges on selling pressure

Dhaka, April 25:Dhaka stocks posted a sharp fall on Sunday driven by heavy selling pressure from general investors, whose uncertainty about the probe report's possible upshot on the market further deepened as the government was yet to come up with any action plan based on the report.

Market operators said a large section of retail investors went for bulk sale on the day as the continued downtrend in the market since the past week and the lack of corrective measure on the part of the regulators and the government infused them with the fear that the market would slip further.

'Investors have lost the trust they seemed to have regained in the past two months. The government's hush-hush policy about the probe report and the power wielded by the alleged manipulators pushed them into a state of utter frustration,' remarked an official at a brokerage house.

Many of the general investors who went for heavy sale on the day did so with an intention to leave the market and stay away from it until they perceived it was becoming stable and suitable for investment. They also expressed their frustration over the government's role about the probe report.

'The government has proven itself gutless as it could not came up with any action in two long weeks after submission of the report to assure the investors that it was working on the issue,' remarked an investor in front of the Dhaka Stock Exchange building.

He said, 'The government's words do not match its actions, due to which we are losing track of market trait and its direction.'

The benchmark general index, or DGEN, of the country's premier bourse lost 116.29 points, or 1.87 per cent, to close the day at 6,076.31 points.

The turnover on the day, however, increased to Tk 631.10 crore from that of Tk 476.82 crore on Thursday, the previous trading day, due to the rush to sell off shares.

Most of the scrip, except Beximco, lost much value on the day. All the five issues of Beximco Group witnessed an unprecedented rise posting a Tk 183.14 crore turnover, which was 29 per cent of the total turnover of the bourse on the day.

The day saw Beximco rising by 6.98 per cent, Bextex by 9.63 per cent, Shinepukur Ceramics Limited by 9.07 per cent, Beximco Synthetic by 6.40 per cent, and Beximco Pharma by 7.85 per cent.

Salahuddin Ahmed Khan, a finance teacher of Dhaka University, said, 'Investors are clueless about the market's prospect as different quarters concerned had been issuing different statements from their own stance.'

He also called for keeping the market under strong surveillance at this time to avoid further volatility.

'When the overall market is negative, surveillance against unusual price hike of any scrip is a priority to prevent any possible manipulation,' the former chief executive officer of the DSE maintained.

Akter H Sannamat, a capital market analyst, said, 'On Sunday, the investors became more discouraged than ever following the finance minister's remark about reforming the Securities and Exchange Commission.'

'The government should come up with a positive attitude to address the situation and restore investors' confidence,' he said.

Out of the total 255 issues traded on the day, 23 advanced, 227 suffered heavy loss, and five remained unchanged. 

Source: New Age

MI Cement listing deadlock likely to end by this week

Dhaka, April 25:The Securities and Exchange Commission is likely to issue a directive this week to the Dhaka and Chittagong bourses asking them to enlist MI Cements Ltd on condition that the company will compensate its shareholders from the directors' accounts if its shares are traded below the IPO issue price in the six months of its listing.

The SEC expressed its willingness to settle the listing deadlock the company has been facing in a meeting with the representatives of the company and the two bourses at the SEC boardroom on Sunday morning, commission sources said.

MI Cements chairman Jahangir Alam told New Age on Sunday, 'We will keep Tk 5 crore in reserve in a bank account to compensate the shareholders in case they lose money in share trading in six month of the company's listing.'

'We have also agreed to keep the directors' shares, which account for 70 per cent of the total shares, floated on the market under the custody of the DSE to realise funds for the investors' compensation claims if the fund to be kept reserved in a bank account for the purpose is found insufficient to cover losses,' he said.

A senior official of MI Cement said that the SEC, DSE and CSE agreed to the condition proposed by the company.

Source: New Age

Market Disclosures [25-04-11]

Summit Alliance Port
Alliance Holdings Ltd, one of the corporate sponsors of the company, has reported its intention to sell 11,95,690 shares out of its total holdings of 79,36,300 shares of the company at prevailing market price through the stock exchange within next 30 working days. It is to be noted that Alliance Holdings Ltd earlier reported its intention to sell 20,32,590 shares of the company on October 28, 2010 and completed its sale of 8,36,900 shares up to October 31, 2010. Now it intends to sell the remaining 11,95,690 shares.

Bangladesh Finance and Investment Co
Trading of the shares of the company will be allowed only in the spot market and block/odd lot transactions will also be settled as per spot settlement cycle with cum benefit from April 25 to 27. Trading of the shares of the company will remain suspended on record date on April 28.

Green Delta Insurance
Trading of the shares of the company will be allowed only in the spot market and block/odd lot transactions will also be settled as per spot settlement cycle with cum benefit from April 25 to 27.  Trading of the shares of the company will remain suspended on record date on April 28.

United Leasing
Trading of the shares of the company will be allowed only in the spot market and block/odd lot transactions will also be settled as per spot settlement cycle with cum benefit from April 25 to 27. Trading of the shares of the company will remain suspended on record date on April 28.

One Bank
Asaduz Zaman, one of the sponsors of the bank, has reported his intention to sell 60,000 shares (bonus shares) out of his total holdings of 4,69,346 shares of the bank at prevailing market price through the stock exchange within next 30 working days.

Peoples Insurance
Golam Faruk Ahmed, one of the directors of the company, has reported his intention to sell 2,00,000 shares (bonus Shares) out of his total holdings of 6,87,450 shares of the company at prevailing market price through the stock exchange within next 30 working days.

Asia Pacific General Insurance Co
AHM Mustafa Kamal, one of the sponsors/directors of the company, has reported his intention to sell 77,700 shares out of his total holdings of 1,55,400 shares of the company at prevailing market price through the stock exchange within next 30 working days.

Uttara Finance
The board of directors has recommended 40 per cent stock dividend for the year ended on December 31, 2010. The AGM will be held on May 30. Record date will be on May 3.

United Commercial Bank
The board of directors has recommended 25 per cent stock dividend for the year ended on December 31, 2010. The AGM will be held on May 30 at 10:30am at Army Golf Club at Dhaka Cantonment in Dhaka. Record date will be on May 4.

City General Insurance
The board of directors has recommended 12 per cent stock dividend for the year ended on December 31, 2010. The AGM will be held on June 23 at 10:30am at Institution of Diploma Engineers, Bangladesh at Kakrail in Dhaka. Record date will be on May 4.
Source: New Age