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Proposed financial reporting law to go next parliament n Tribune Report


Market leader for second consecutive session n Tribune Business Desk Generation Next Fashions Limited emerged as the market leader for the second consecutive session of Dhaka Stock Exchange yesterday. The stocks worth more than Tk36.4 crore changed hands, contributing 7.5% of the total DSE turnover. The volume (in amount) traded yesterday increased by 38% in comparison with the preceding trading day, which was worth Tk26.1 crore. The price of each share that ranged between Tk36.4 and Tk37.9 rose 1.94% to Tk36.8 at closing. The end-of-trading closing price of Tk36.8is the highest closing price registered by the companyin the last six months. Investors believed the market confidence in the stock is pulling up the price of the stock. Brokers said the share price increase is influenced by a declaration disclosed on Tuesday that the company obtained positive rating by Credit Rating Information and Services Limited (CRISL). The company disclosed it was given the ratings “A-” in the long-term and “ST3” in the short-term loan that was mostly reflected by its financials (audited) up to June 30, 2013, and relevant quantitative and qualitative information up to the date of rating declaration. Previously, the management disclosed a quarterly profit of Tk11.6 crore against Tk5 crore in the same period last year. The company has also reported a profit of Tk28.5 crore in the first nine months of the current year, which is an increase of 75% of the profit (Tk16.4 crore) during the same period last year. The company listed in the engineering segment of the stock market has an EPS of Tk1.69 and a price to earning ratio of 16.02, according to DSE. l

BB asks banks to offer special privileges for SMEs

n Tribune Report Bangladesh Bank has asked the scheduled banks to offer some privileges for the small and medium enterprise sector hit by political unrest. Among the privileges directed are considering down payments of rescheduled loans on the basis of bank-client relationships, fixing the restructuring period of non-classified loans (standard and small amounts) to a logical level, transferring of credit to blocked accounts if need be and allowing an amount of flexibility in determining interest rates. A circular issued yesterday made the directives. These concessions, aimed at maintaining sufficient credit flow for the SMEs, are to be allowed until the end of June next year, the circular stated. Bangladesh Bank said the SME sector has a significant contribution to the country’s economy and should be helped out of the impacts of ongoing political unrest. l

Finance Minister AMA Muhith delivering speech at a meeting with the board of directors of DSE at the finance ministry in Dhaka yesterday

‘Govt to take fresh initiative to enlist SOEs with stock exchanges’ n Tribune Report

Finance Minister AMA Muhith yesterday said the government would take a fresh initiative to enlist the state-owned enterprises with the stock exchanges as it has taken go-slow strategy due to the volatility of the capital market. Prime Minister Sheikh Hasina earlier directed listing the SOEs, but the finance ministry delayed the process because of unstable market, he told reporters after a meeting with the board of directors of Dhaka Stock Exchange at the finance ministry. A decision would be taken soon, he said. Muhith said the government has taken a number of measures, including amendments to laws, along with providing financial facilities because it wanted to create the country capital markets as “major source of business.” About the stock market debacle in 2010, he said the crash could not be controlled because the prices of most listed companies were overvalued. He, however, pointed out the investment increased recently compared to the

previous time. DSE Director Ahmed Rashid Lali said the stock exchanges badly need five facilities, including tax holiday, separate clearing and settlement company, withdrawal of 1.5% tax on stamps, and extension of provisioning period for banks and non-banking financial institutions. Those facilities are not necessary due to the execution of demutualisation as the government is implementing the process, Lali said. Meanwhile, a DSE statement said it demanded relaxing the rules for opening new branches by brokerage firms considering the present situation. Earlier, the securities regulator had put a curb on opening new branch of brokerage houses in and out of the city after market debacle three-year back. During the market booming, the DSE at the district level opened around 600 branches of brokerage firms to net more investors across the country. DSE also met with National Board of Revenue Chairman Md Ghulam Hussain later on the day, placing almost similar demands. l

BSEC asks CDBL to update BO accounts, approves rights shares for Rupali life insurance n

Tribune Report

The stock regulator has asked the Central Depository of Bangladesh to update beneficiary owner’s account as part of simplifying the application process for IPO shares. Bangladesh Securities and Exchange Commission issued a statement in this regard yesterday. In addition, BSEC approved rights offer of Rupali Life Insurance Company Ltd that will issue more than 12m ordinary shares of Tk30 each, including Tk20 in premium, with the target to raise over Tk360m from investors. The offer is of one rights share per existing share. The rights share issue proceeds will be used for business expansion and for the strengthening of the company’s capital base. It also approved the trust deed for an open

fund titled “ICB AMCL First Converted Unit Fund” worth Tk500m. The regulator is now discussing the application process for initial public offering shares with the stakeholders and intends to streamline the procedure for retail investors. Bangladesh Merchant Bankers Association and the stock exchanges already submitted their opinions over the issue. Under the new plan, the money will be transferred directly from BO accounts of successful investors in the IPO lottery to the issuing companies. The retail investors will be able to apply for IPO share allotments through their respective brokerage firms and merchant banks. It is expected that the change will reduce hassles of cheque handling and curtail the processing time lag currently associated with manual applications. l

The proposed financial reporting law will have to wait for the next parliament to be enacted as Finance Minister AMA Muhith said in Dhaka yesterday. He said the interim government would finalise the draft of the law, which will have to be passed by the next parliament when a new government would come to power. The minister told reporters of the development after a meeting with the board of directors of Dhaka Stock Exchange (DSE). The present government had initiated formulating the law due to misleading reports by a section of ill-motivated companies that caused distortion on the financial markets. A draft of the law has also been approved by the cabinet of the government. “The country’s chartered accountancy has not developed compared to other developing countries,” Muhith said, expressing dissatisfaction. “There is some problem lies in the system.” He pointed out that there are talks about the chartered accountants firms regarding the financial reporting act, but the cost management firms have backed the government move. As a result, he said, the government will not face any problem to enact the financial reporting law. l

Individuals, cos fined for share price manipulation n Tribune Report The securities regulator has fined four individuals and nine companies Tk75 lakh for manipulating scrips between 2009 and 2011. Abdur Rahim, an individual, faced Tk25 lakh fine for manipulating Rahim Textile, Bangas, Mithun Knitting, Renata, Reckitt Benckiser and Phoenix Finance First Mutual Fund scrips, said Bangladesh Securities and Exchange Commission in a statement yesterday. The commission found that Abdur Rahim and his associates committed serial transaction of the above scrips each other for influencing share prices in 2009-2010, which is false and misleading appearance of active trade, the commission said. l


NRB Bank Limited in a rejoinder has objected to a headline titled “New bank violates rules” published in Dhaka Tribune yesterday. They termed the headline as “negative and provocative.” The bank said: “Any policy of the bank is always approved by the board of directors and any exception thereof is also approved by the board. The appointment of the senior executive was duly approved by the board and accordingly and informed to the regulator.” Regarding purchase of a car, it mentioned that the bank didn’t violate any rule in terms of car purchase policy of Bangladesh Bank. In order to keep the expenses under control, the bank hired the vehicle on rental basis in compliance with the regulator’s policy. Our reply: The story we published was based on a Bangladesh Bank letter sent to NRB Bank Limited and the allegations were brought by the central bank. l

December 19, 2013  
December 19, 2013