CDBL NEWS - June 9,2011

- Islamic Finance Inv Bonus shares credited on 09-JUN-11
- Jamuna Oil Co. Ltd Bonus shares credited on 09-JUN-11
- UCBL Bonus shares credited on 08-JUN-11
- Rupali Bank Limited Bonus shares credited on 07-JUN-11
- Sonargaon Textiles Bonus shares credited on 07-JUN-11

Recast SEC not in hurry to approve new IPOs

Mohammad Mufazzal

Fourteen companies lining up to make initial public offering will have to wait a bit longer as the newly recast securities regulator has adopted a cautious approach to approve their proposals, officials said Tuesday.

According to the Securities and Exchange Commission (SEC), the companies have sought to raise three billion taka from the market with ten firms planning to go public through the fixed price method.

But their fate now hangs in the balance as the recent stock crash prompted the newly appointed SEC chairman and three new members to take time to scrutinise the proposals and examine their financial details.

Pvt banks place proposal to BB for re-fixing CDR

Siddique Islam

Leaders of Bangladesh Association of Banks (BAB) requested the central bank governor Tuesday to re-fix credit-deposit ratio (CDR) by allowing six more months to implement the revised CDR.

The BAB proposed increasing CDR by 5.0 percentage points from the existing 85 per cent to 90 per cent for conventional commercial banks, while allowing Sharia-based Islamic banks to maintain 95 per cent against the existing 90 per cent.

The apex forum of the country's private commercial banks (PCBs) made the proposal at a meeting with the high-ups of Bangladesh Bank (BB) held at its conference room Tuesday.

Stock investors awaiting budget announcement

A good many investors in the country's capital market are looking for some opportunities through fiscal measures in the upcoming national budget for legalising their undisclosed money, according to some quarters in the stock market.

Sources in the capital market said many institutional and big individual investors are waiting for announcement of the budget to make their next decisions relating to investment in the stock market.

Both Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) have earlier urged the authorities concerned to allow investment of undisclosed money -- after making payment of a certain portion of such money as tax -- in the stock market, without any further question being asked by the tax personnel.

"A large section of the institutional investors are not going for investment right now but waiting to see whether the government extends the opportunity for legalisation of undisclosed income," said Chief Executive Officer (CEO) of NCCB Securities and Financial Services, Mr Manjum Ali.

BB asked to take actions against errant banks

The Ministry of Finance (MoF) has asked the Bangladesh Bank (BB) to take stern actions against the banks which invested large funds in 2009 and 2010 beyond their allowable limits.

The directive was issued by the MoF last week as the banks' over-exposure led to the recent abnormal rise of the stock market and its consequent crash.

Besides, the MoF has asked the securities regulator to re-examine the asset-revaluation reports of eight listed companies as they are suspected to be involved in making profits from the stock market, unethically, by overvaluing their assets.

CDBL NEWS - June 6,2011

- Standard Bank Ltd. Bonus shares credited on 06-JUN-11
- Uttara Finance Bonus shares credited on 06-JUN-11
- Premier Leasing Bonus shares credited on 05-JUN-11
- Summit Power Ltd. Bonus shares credited on 02-JUN-11

MoF ready to subscribe Rupali Bank's rights

FE Report

The Ministry of Finance (MoF) will provide Rupali Bank with Tk 2.54 billion next week to subscribe the government's portion of rights shares likely to be offered within a very short time to the bank's shareholders.

The government at present holds 92.25 per cent shares of the bank, a top ministry official said. One rights share will be offered against two existing shares to raise the paid-up capital of the bank in line with the instruction of Bangladesh Bank (BB), the official added.

"Rupali Bank will be given Tk 2.54 billion to subscribe rights shares in favour of the government as it holds now 92.25 per cent shares on the bank," a senior official in the MoF said.

"It is an official decision, taken about a couple of month's back, to provide Rupali Bank with the required fund," he added.

He said Rupali Bank has recently sought the amount from the MoF, referring to the earlier decision in this connection.

Investment, growth, policies and realities

The estimates about the growth rate of the Bangladesh economy, price situation, household income and expenditure, level of poverty, income distribution et., that are provided by the official Bangladesh Bureau of Statistics (BBS), leave a lot of room for raising questions about their objectivity and relevance to the realities. The government-run BBS has lately projected that the country's gross domestic product (GDP) in the current fiscal year (FY), 2010-2011, would grow by 6.7 per cent. This estimate about the GDP growth rate has now been contested by the Centre for Policy Dialogue (CPD), a leading think-tank in the country. It has expressed its doubts over the objectivity of the BBS's GDP growth figure. In the estimation of the CPD, the BBS-calculated GDP growth rate at 6.7 per cent in fiscal 2011 could be upheld as objective only if the same had been backed up by proofs of an actual lift-up in the investment rate in different sectors. The fact that such investments have been markedly lower than the desired level, do largely tend to take credibility away from the latest figure of the BBS about the GDP growth rate. According to the CPD, the country's GDP would not grow at more than 6.2 or 6.3 per cent in the outgoing fiscal that was marked by a low level of overall new investments in the economy.

Atiur sits with SEC chief tomorrow

Bangladesh Bank will take a series of steps, including regular meetings with the capital market watchdog, in an effort to stabilise the stockmarket and check any wrongdoing.
The central bank governor, Atiur Rahman, will sit with the Securities and Exchange Commission and other institutions tomorrow.
A report of the Ibrahim Khaled-led probe committee recommended that the two bodies sit together regularly.
“We will sit regularly to make sure there is coordination among us,” Rahman told The Daily Star.
A BB official said they will review the existing guidelines for running the capital market and discuss possible steps to invigorate the stock market.
Allegations have it that a large portion of the small and medium enterprise loan has been invested in the share market. Bangladesh Bank has set up a separate department to oversee the SME loans.
Officials of the department have already visited 65 enterprises and filed their inspection reports with the central bank high-ups. The inspection teams did not find evidence that SME loans have been diverted as alleged, a BB official said.

Businesses worried over future political situation

FBCCI president AK Azad Tuesday expressed deep concern over the future political situation in the country and said business community wanted to know in which direction the politics was heading, reports UNB.

"Business people are worried over the political situation. We don't want to see 1/11 episode again which had gone away, because businessmen were the worst sufferers," Azad said while addressing a discussion meeting in the city Tuesday.

He said country's business people are now united and urged the government to take steps for bringing back the businessmen who had settled down abroad.