Monthly Archives: July 2010

Malek Spinning makes debut Monday

FE Report

Malek Spinning Mills Limited, the country’s leading yarn producer, will make debut Monday at the stock market.

The company offered 40 million shares for public to raise Tk 1.0 billion from the stock market to expand its business. Its offer value is Tk 25 each share, including a premium of Tk 15.

It will be the 13th textilelisted company on the stock exchanges-Dhaka Stock Exchange and Chittagong Stock Exchange.

The DSE board Thursday approved the listing and fixed date of debut day of the textile company.

The initial public offering (IPO) subscription has fetched a huge sum of Tk 16.31 billion, which is 16.31 times higher than the IPO amount. It is the highest IPO over-subscription record in textile sector in Bangladesh.

In fiscal 2008-09, the company’s annualised EPS stood at Tk 2.63, net profit Tk 183.99 million and paid up capital Tk 700 million, according to the company’s prospectus.

A Matin Chowdhury, Managing Director of the company earlier said Malek Spinning will utilise the proceeds from the IPO to establish a PetroChemical Complex, which will be the first of its kind in Bangladesh producing Bottle Grade PET resin and Textile Grade Chips along with Polyester Fiber.

“This will result in import substitution which will translate into significant savings of foreign currency as well as stimulating tremendous growth in the polyester manufacturing industry”, said Matin.

Starting with a capacity of 6,000 spindles and annual sales of Tk 95 million, the company now has a capacity of 63,624 spindles along with an open-end capacity of 40 tons daily with a projected annual sale of approximately Tk 3.88 billion per annum.

Subscription for ordinary shares allotment of Malek Spinning opened on June 6, and closed on June 10 for the resident Bangladeshis and on June 19 for non-resident Bangladeshis.

Source: The financial express, 30 July, 2010

SEC okays rights offer of three cos

FE Report

The Securities and Exchange Commission(SEC) Tuesday approved the rights offer of threecompanies.

The companies, which have obtained the SEC nod to offer rights are Confidence Cement, Asia Pacific Insurance and Daffodil Computers.

The approval came at the commission meeting held at the commission office with its Chairman Ziaul Haq Khondker in the chair.

Confidence Cement will offer three rights for every 10 existing shares and both the Asia Pacific Insurance and Daffodil Computers will offer one rights for every existing share.

The Confidence Cement will float 7,00,52,000 rights of Tk 100 each at an issue price of Tk 700 per share, including a premium of Tk 600, totaling more than Tk 526 million.

Asia Pacific Insurance will offer 21,17,500 rights shares with an issue price of Tk 150, including a premium of Tk 50 each, totaling more than Tk 317 million.

On the other hand, without any premium Daffodil Computers will float 2,28,53,600 rights of Tk 10.0 each.

Source: The financial Express, 29 July, 2010

LankaBangla Securities to get indicative price next week

Star Business Report

The indicative price of LankaBangla Securities shares will be set within the next one week through bidding by institutional investors, as part of the stockbroker’s plan to go for IPO using book building method, officials said yesterday.

At least 15 institutional investors from minimum three sectors, including five merchant banks, will take part in the bidding to determine the indicative price of each LankaBangla Securities share.

Determining the indicative price is a prerequisite for going to discover the share price of a company that intends to go public using the book building method, a modern pricing mechanism for initial public offering (IPO).

Setting the indicative price is also required to obtain regulatory approval at the first stage.

“After getting an indicative price, we will submit the IPO prospectus to the regulator for its consent to go for price discovery,” said Mohammed Nasir Uddin Chowdhury, chief executive officer of LankaBangla Securities.

He was speaking at the roadshow on LankaBangla Securities, arranged for the institutional investors at the Dhaka Sheraton hotel yesterday.

A roadshow is required by the book building regulations before price discovery where a company’s fundamentals are displayed to the institutional investors.

AAA Consultants and Financial Advisers, the issue manager of the LankaBangla Securities IPO, presented the fundamentals of the brokerage firm at the roadshow.

If approved by the Securities and Exchange Commission, LankaBangla Securities will be first listed stockbroker in the Bangladesh market.

The brokerage firm’s existing paid-up capital is Tk 55 crore and will float three crore ordinary shares of Tk 10 each. After the IPO, its paid-capital will reach Tk 85 crore.

Of the three crore ordinary shares, 20 percent or 60 lakh shares will be reserved for the institutional investors, who individually can apply for maximum 10 percent of the 60 lakh shares.

With the IPO proceeds, the company will go for business expansion and diversification such as increasing margin loan facilities, branch expansion, software upgrade and acquiring fixed assets.

A subsidiary of LankaBangla Finance Ltd, the firm will also go for strategic investment in other companies, participate in bond market and effectively activate dealership activities.

The half-yearly earnings per share (EPS) of LankaBangla Securities, the top performer on the two bourses in terms of turnover in the last four years, is Tk 16.20 to June this year.

LankaBangla Securities started operations in the capital market in 1998. Now it has eight branches across the country, and two more branches are in the pipeline.

The stockbroker, which was rated AA2 by Credit Rating Agency of Bangladesh, is a 90.9 percent owned subsidiary of LankaBangla Finance Ltd, a leading listed non-bank financial institution. LankaBangla Finance is engaged in leasing, credit cards, merchant banking, corporate finance and financial consultancy.

Deshbandhu Sugar to float Tk 1.0b IPO

Jasim Uddin Haroon

Deshbandhu Sugar Mills Limited (DSML), a leading refinery, wants to float shares worth Tk 1.0 billion later this year aiming at mobilise fund for expansion, its chairman Golam Mostafa told the FE.

“We’ve taken move to raise fund worth Tk 1.0 billion for expansion. We’ve already appointed issue manager for this purpose,” Mr Mostafa, told the FE in an exclusive interview recently.

Mr Mostafa said pre-placement which will begin shortly to the tune of Tk 600 million and the IPO (initial public offering) worth Tk 400 million subject to the approval of the SEC.

“This fund will be utilised to raise capacity of my refinery,” he added.

Currently, the DSML has capacity worth 300 tonnes a day and it is planned to make double at 600 tonnes a day.

DSML, a member of prestigious RSA (Refined Sugar Association), is located at Kawadi area of Palash in Narsingdi.

Mr Mostafa who is also secretary general of Bangladesh Sugar Refiners’ Association (BSRA) said sugar market remains volatile in many times mainly because of its distribution system.

“The traditional DO (delivery order) system to distribute sugar from mills is a major reason behind the price hike of the essential item,” Mr Mostafa added.

He claimed that the capacity of the country’s seven sugar refineries is much more higher than that of the country’s consumption.

BSRA sources said Bangladesh’s sugar demand is around 1.4 million tonnes a year and the capacity of the seven refineries is 2.4 million tonnes.

Deshbandhu chairman said sugar distribution through dealers will help stabilise the market.

He said there are 4000 dealers under the BSFIC (Bangladesh Sugar and Food Industries Corporation).

“If the dealers registered with the BSFIC involve with us (private refineries), proper distribution of sugar will be ensured and market will remain stable most of the time,” Mostafa added.

“I can assure you that the dealers will get at least Tk 300,000 a year if they (dealers) come with us and their experiences will help ensure smooth distribution,” he added.

Currently, BSFIC dealers get around Tk 20,000 a year by depositing security money worth Tk 100,000 with the state-owned corporation.

Mr Mostafa said the refiners’ association proposed to the government to form a committee comprising representatives of commerce ministry, industries ministry, BSFIC, national board of revenue, BSRA, and dealers to monitor the sugar market.

The committee will also determine the prices at mill gates after revision of the international market each two months, he added.

“Our association has already appealed the government to introduce the dealer-based distribution system and form a committee to ensure smooth supply and keep stable the prices of sugar,” Mostafa added.

Mr Mostafa, who hailed from Rangpur began his business through trading.

He has another venture Deshbandhu Polymar Limited (DPL), also a leading plastic bag manufacturer in the country.

The DPL is located at Polash in Narsingdi and it mainly produces woven bags and other kinds of bags needed mainly in poultry feed plants, fertiliser factories, cement, food grains and chemical factories.

DPL is also going to float IPO within next month (August).

The DPL has planned to raise Tk 100 million through issuing a total of 10 million primary shares with a face value Tk 10 each.

SEC (Securities and Exchange Commission) has already approved the DPL IPO.

Mr Mostafa who is also chairman of the DPL said it will manufacture large size bags, which have potential export market.

“Our foreign buyers want to import jumbo bags and we have planned to manufacture this kind of bag after realisation of money from public.”

DPL, the third largest bag manufacturer, will repay bank loans as well from the money to be realised through IPOs.

DPL currently produces 55,000 bags a day, and its major customers in the country are Bangladesh Chemical Industries Corporation, Kafco and Kazi Farms.

Source: The financial express, 27 July, 2010

LankaBangla Securities’ IPO subscriptions in Sep

FE Report

Bidding for price discovery under book building method of LankaBangla Securities Limited (LBSL) is expected to begin in early September, said officials Monday.

The company, country’s leading brokerage firm, will offload more than 37 per cent share in the stock market to diversify its business. If approved by the Securities and Exchange Commission (SEC), it will be the first listed brokerage firm.

“We’ll submit necessary documents next week for seeking approval of the securities regulator for beginning bidding process,” said Nasir Uddin Chowdhury, chief executive officer of LBSL. “If everything goes well, bidding for price discovery might start in early September,” he added.

In line with book building regulations, before price discovery the company held an IPO roadshow to woo the eligible institutional investors in a city hotel Monday.

In response to a question about the company’s addressing risk factors in a falling market as its core business is based on stock trading, CEO of LBSL said, “Our liabilities will be minimised after IPO as the bank borrowing will reduce, which will help get a good return.”

“Besides, other than equity market, half of the raised capital will be invested on bond market, which will also help popularize it,” he said adding that twenty per cent of fund will be put on strategic investment and rest on equity market and other purposes

In reply to another question from an institutional investor, he promised to insert risk factors and their mitigations in the company’s prospectus.

Mafizuddin Sarker, managing director of LankaBangla Finance Ltd (LBFL), described the company’s financial strength and its future prospects, while Mohammad A Hafiz, director of AAA Consultants and Financial Services that acts as issue manger, explained the company’s growth and book building procedure.

The brokerage firm whose existing paid-up capital is Tk 550 million will float 30 million ordinary shares of Tk 10 each. After the IPO, its paid-capital will reach Tk 850 million.

Eligible investors will bid for 20 per cent of total ordinary shares.

It is a subsidiary company of listed LBFL, which is a leading joint venture non-banking financial institution between local and Sri Lankan entrepreneurs.

The brokerage house in terms of turnover bagged the top position in the fourth consecutive year in Dhaka Stock Exchange and fifth consecutive year in Chittagong Stock Exchange.

Last month, its daily average turnover was more than Tk 2.0 billion on DSE.

Listed in 2006, the LBFL having a 99.99 per cent stake in LBSL is a joint venture financial institution established with multinational collaboration.

LBSL started operations in the capital market in 1997. Now it has eight branches across the country with 1600 clients, and two more branches are in the pipeline.

Source: The financial Express, 27 July, 2010

Pre-IPO roadshow of LankaBangla Securities on Monday

Sarwar A Chowdhury
LankaBangla Securities Ltd will hold a roadshow on Monday for institutional investors, as the stockbroker plans to go for initial public offering (IPO) using book building method.

If approved by the stockmarket regulator, it will be the first listed brokerage firm. A roadshow is required by the book building regulations before price discovery.

The brokerage firm whose existing paid-up capital is Tk 55 crore will float three crore ordinary shares of Tk 10 each. After the IPO, its paid-capital will reach Tk 85 crore. With the IPO proceeds, the company will go for business expansion and diversification, its officials said.

A subsidiary of LankaBangla Finance Ltd, the firm may also go for strategic investment in other companies, participate in bond market and effectively activate dealership activities.

The stockbroker was the top performer on the two bourses in terms of turnover in the last few years. Last month, its daily average turnover was more than Tk 200 crore on Dhaka Stock Exchange.

LankaBangla Securities started operations in the capital market in 1998. Now it has eight branches across the country, and two more branches are in the pipeline.

Source: The daily star – 22 July, 2010

Green light for two mutual funds

Star Business Report
The stockmarket regulator yesterday gave a green light to two applicants to float mutual funds.

One applicant was the Tk 150 crore EBL NRB Mutual Fund, sponsored by Eastern Bank Ltd (EBL), while the other was the Tk 100 crore worth Sonali Bank 1st Mutual Fund, which will be sponsored by Sonali Bank Ltd.

Both the funds are closed-end with a maturity period of 10-years, said officials of Securities and Exchange Commission (SEC).

The commission approved the funds at a meeting presided over by SEC Chairman Ziaul Haque Khondker.

A mutual fund is a professionally managed collective investment scheme that pools money from many investors and invests in stocks, bonds and short-term money market instruments.

The per unit price of each of the two mutual funds will be Tk 10, said SEC Executive Director Anwarul Kabir Bhuiyan after the meeting.

In the EBL NRB Mutual Fund, Eastern Bank will subscribe units worth Tk 15 crore as sponsors, while Tk 60 crore will be raised through pre-IPO or private placement, and the rest Tk 75 crore will be kept for initial public offering (IPO).

Of the Tk 60 crore pre-IPO placement, 50 percent or Tk 30 crore will have to be reserved for non-resident Bangladeshis, Bhuiyan said.

Race Asset Management will act as manager of the fund.

In the Sonali Bank 1st Mutual Fund, Sonali Bank will subscribe units worth Tk 25 crore as sponsor, while Tk 25 crore will be raised through pre-IPO placement and Tk 50 crore through IPO.

Investment Corporation of Bangladesh’s subsidiary, Asset Management Company Ltd (AMCL), will act as manager of the fund.

The SEC executive director said Sonali Bank proposed the name of the fund as Sonali Bank 1st ICB AMCL Islamic Mutual Fund.

But, the commission did not approve the name because as per an SEC decision, the asset managers’ name cannot be used in the mutual funds’ title.

Currently, 26 closed-end mutual funds and three open-ended unit funds are being traded on the bourses.

At yesterday’s meeting, SEC also approved the rights offer of City Bank and Islamic Finance and Investment.

The City Bank will now be able to issue more than 1.96 crore rights shares at an offer price of Tk 200 each, including a Tk 100 premium.

Existing shareholders can enjoy the rights offers at a ration of 1:1, meaning one rights share will be given against one existing share.

Islamic Finance and Investment will issue more than 19.92 lakh rights shares at an offer price of Tk 150 each, which includes a Tk 50 premium.

Existing shareholders can enjoy the rights offers at a ration of 2:1 — one rights share will be given against two existing shares.

Source: The daily star , 21 July, 2010

সিটি ব্যাংক ও ইসলামী ফাইন্যান্সের রাইট শেয়ার অনুমোদন

অর্থনৈতিক রিপোর্টার ॥ পরিশোধিত মূলধন বাড়াতে রাইট শেয়ার ছাড়ার অনুমোদন পেয়েছে সিটি ব্যাংক এবং ইসলামী ফাইন্যান্স এ্যান্ড ইনভেস্টমেন্ট লিমিটেড। গতকাল মঙ্গলবার সিকিউরিটিজ ও এঙ্চেঞ্জ কমিশনের (এসইসি) ৩৫১তম সভায় পুঁজিবাজারে তালিকাভুক্ত এ দু’টি প্রতিষ্ঠানের এ সংক্রানত্ম প্রসত্মাব অনুমোদন করা হয়।
কমিশন সভা শেষে এসইসির মুখপাত্রের দায়িত্বপ্রাপ্ত নির্বাহী পরিচালক আনোয়ারম্নল কবীর ভুঁইয়া সাংবাদিকদের জানান, বাংলাদেশ ব্যাংকের নির্দেশনা অনুযায়ী ব্যাসেল-২ বাসত্মবায়নের জন্য সিটি ব্যাংক পরিশোধিত মূলধন বাড়াতে রাইট শেয়ার ছেড়ে অর্থ সংগ্রহ করছে। ব্যাংকটি মোট ১ কোটি ৯৬ লাখ ২৯ হাজার ১২৫টি রাইট শেয়ার ছেড়ে ৩৯২ কোটি ৭৮ লাখ ২৫ হাজার টাকা সংগ্রহ করবে। ব্যাংকের শেয়ারহোল্ডাররা ১:১ হারে (১টি সাধারণ শেয়ারের বিপরীতে ১টি) রাইট শেয়ার পাবেন। ১০০ টাকা অভিহিত মূল্যের প্রতিটি রাইট শেয়ারের জন্য শেয়ারহোল্ডারদের কাছ থেকে ১০০ টাকা প্রিমিয়ামসহ মোট ২০০ টাকা নেয়া হবে।
অন্যদিকে ইসলামী ফাইন্যান্স মোট ১৯ লাখ ৯২ হাজার ১৯১টি রাইট শেয়ার ছেড়ে পুঁজিবাজার থেকে ২৯ কোটি ৮৮ লাখ ২৮ হাজার ৬৫০ টাকা সংগ্রহ করবে। শেয়ারহোল্ডাররা ১:২ হারে (২টি সাধারণ শেয়ারের বিপরীতে ১টি) রাইট শেয়ার পাবেন। এই প্রতিষ্ঠানের প্রতিটি ১০০ টাকা অভিহিত মূল্যের রাইট শেয়ারের জন্য ৫০ টাকা প্রিমিয়ামসহ মোট ১৫০ টাকা সংগ্রহ করা হবে।

Source: The daily janakantha, 21 July, 2010

বিকন ফার্মার আইপিও লটারি আজ

অর্থনৈতিক রিপোর্টার ॥ বিকন ফার্মাসিউটিক্যালস লিমিটেডের প্রাথমিক গণপ্রসত্মাবের (আইপিও) লটারি আজ সকাল সাড়ে ১০টায় রাজধানীর শেরে বাংলা নগরে অবস্থিত বঙ্গবন্ধু আনত্মর্জাতিক সম্মেলন কেন্দ্রে অনুষ্ঠিত হবে। লটারির সামগ্রিক প্রক্রিয়া শেষে ওয়েবসাইটে ফলাফল প্রকাশ করা হবে।
বিকন ফার্মাসিউটিক্যালস ১০ টাকা অভিহিত মূল্যের ৩ কোটি শেয়ার ছেড়ে পুঁজিবাজার থেকে ৩০ কোটি টাকা সংগ্রহ করছে। এজন্য গত ২০ থেকে জুন ২৪ জুন পর্যনত্ম স্থানীয় বিনিয়োগকারী এবং ৩ জুলাই পর্যনত্ম প্রবাসী বিনিয়োগকারীদের কাছ থেকে আবেদনপত্র জমা নেয়া হয়েছে। এই সময়ের মধ্যে মোট ৯৪ কোটি শেয়ারের জন্য ৯৪০ কোটি টাকার আবেদন জমা পড়েছে_ যা নির্ধারিত শেয়ারের তুলনায় ৩১ গুণেরও বেশি। কোম্পানির ৫০০টি শেয়ারে এক মার্কেট লট নির্ধারণ করা হয়েছে।
বিকন ফার্মার বর্তমান পরিশোধিত মূলধন ১৯০ কোটি টাকা। তবে আইপিও প্রক্রিয়া শেষ হলে পরিশোধিত মূলধন ২২০ কোটি টাকায় দাঁড়াবে। ২০০৯ সালের আর্থিক বিবরণী অনুযায়ী, কোম্পানিটির শেয়ারপ্রতি সম্পদ মূল্য ১৬ টাকা ৫ পয়সা এবং শেয়ারপ্রতি আয় ৩১ পয়সা।

Source: The daily janakantha – 21 July, 2010