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Cut off price 34tk)

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RB জন্য : 30% Less : 24Tk

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IPO share Distribution : Book building

————————————————————————–

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Total (100%)

পুঁজিবাজার নিয়ন্ত্রক সংস্থা বাংলাদেশ সিকিউরিটিজ অ্যান্ড এক্সচেঞ্জ কমিশনের (বিএসইসি) নির্দেশনা অনুসারে, কাট-অফ প্রাইসের চেয়ে ৩০ শতাংশ কম দামে আইপিওতে সাধারণ বিনিয়ােগকারীদের কাছে শেয়ার ২৪ টাকা বিক্রি করা হবে।

নাভানা ফার্মাসিউটিক্যালস আইপিওর মাধ্যমে

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কোম্পানিটির ইস্যু ম্যানেজারের দায়িত্ব পালন করছে এশিয়ান টাইগার ক্যাপিটাল পার্টনার্স ইনভেস্টমেন্ট লিমিটেড ও ইবিএল ইনভেস্টমেন্ট লিমিটেড।

For more info – 01730-062175 or 01730-062177

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Source: TBS 27 July, 2022, 09:35 pm

The profit margin of Marico Bangladesh Limited – an India-based multinational company – shrank in the March-June quarter – despite a 9% growth in revenue – due to a sharp rise in income tax expenses.

Following financial disclosures, its shares closed 0.58% or Tk14.1 lower at Tk2,418 each on the Dhaka Stock Exchange (DSE) on Wednesday.

Marico starts its financial year in March. According to its unaudited financials, the company’s profits before tax increased 4.52% compared to the same period in the previous year.

But its net profit declined 5% to Tk102.90 crore as income tax expenses rose 56%.

Based on three-month financials, Marico, which listed on Bangladesh’s stock exchanges in 2009, has recommended a 300% interim cash dividend for its shareholders.

After the board of directors’ meeting, the multinational company revealed its financials for the first quarter on the country’s premier bourse.

During the period, its revenue increased to Tk364.65 crore from Tk334.40 crore a year ago.

Marico started out in Bangladesh in 1999 with its flagship brand, Parachute Coconut Oil.

Since then, the company has expanded its business to 29 brands in personal care and food items, such as Saffola edible oil.

To meet the growing demand for coconut oil and food products, it invested Tk29.3 crore to increase the capacity of its factory in Gazipur and set up a new manufacturing line at the beginning of 2020.

Marico Bangladesh Limited / Marico Bangladesh

Factor Investing: How You May Experience it

Why do investments perform the way they do? This is a question many investment experts have been attempting to answer for years. Luckily, factor investing can provide investors with a data-driven understanding.

In this infographic from MSCI, we use scenarios from everyday life to explain how factor investing works.

What is Factor Investing?

Simply put, investors choose stocks based on the “factors”, or characteristics, that help explain investment performance. They are typically aiming for:

• Higher returns
• Lower risk
• More diversification

While you may not have actively incorporated factor investing in your current portfolio, almost everyone will be familiar with the underlying concepts in real life. Here are five common factors and scenarios where you likely experience their principles.

1. Low Volatility Factor

The low volatility factor attempts to capture excess returns to stocks with lower than average risk. This factor has generally performed best during economic slowdowns or contractions.

How you may experience it: If you want a writing career with relatively reliable income, you’ll likely choose to be a marketer at a large company rather than a self-employed author.

2. Quality Factor

The quality factor attempts to capture excess returns in shares of companies that are characterized by low debt, stable earnings growth, and other “quality” metrics. This factor has generally performed best during economic contractions.

How you may experience it: When you’re purchasing new tires for your car, you might consider characteristics like tread longevity, traction, and fuel economy.

3. Value Factor

The value factor attempts to capture excess returns to stocks that have low prices relative to their fundamental value. This factor has generally performed best during economic recoveries.

How you may experience it: If you want a good deal, you may look for items that are on sale.

4. Momentum Factor

The momentum factor attempts to capture excess returns to stocks with stronger past performance. It has generally performed best during economic expansions.

How you may experience it: When you’re deciding what to watch, you may choose a TV show that has high audience ratings. You’ll likely also recommend it to your friends, which further boosts viewer numbers.

5. Low Size Factor

The low size factor attempts to capture excess returns of smaller firms (by market capitalization) relative to their larger counterparts. It has generally performed best during economic recoveries.

How you may experience it: When you’re learning a new sport, you’ll see larger increases in your skill level than a professional athlete will.

Understanding Your Investments With Factor Investing

These simple concepts are at work in your everyday life and in your investments. Targeting these factors can help you meet your investing goals, including maximizing return potential and managing risk.

From 2000 to 2020, here’s how the risk and return of the above factors compared to the benchmark MSCI World Index.

	Return	Risk
Momentum	9.4%	14.8%
Quality	8.7%	13.9%
Low Size	8.0%	17.0%
Value	7.9%	17.9%
Low Volatility	7.6%	11.1%
MSCI World Index	6.6%	15.6%

​​Annualized risk and gross returns in USD from December 29 2000 to December 31 2020 for MSCI World Factor Indexes.

All five of the factors have had greater historical returns than the benchmark index, and some have also had lower risk.

With factor investing, you can better understand what drives your portfolio’s performance.

Who’s Still Buying Fossil Fuels From Russia?

The Largest Importers of Russian Fossil Fuels Since the War

Despite looming sanctions and import bans, Russia exported $97.7 billion worth of fossil fuels in the first 100 days since its invasion of Ukraine, at an average of $977 million per day.

So, which fossil fuels are being exported by Russia, and who is importing these fuels?

The above infographic tracks the biggest importers of Russia’s fossil fuel exports during the first 100 days of the war based on data from the Centre for Research on Energy and Clean Air (CREA).

In Demand: Russia’s Black Gold

The global energy market has seen several cyclical shocks over the last few years.

The gradual decline in upstream oil and gas investment followed by pandemic-induced production cuts led to a drop in supply, while people consumed more energy as economies reopened and winters got colder. Consequently, fossil fuel demand was rising even before Russia’s invasion of Ukraine, which exacerbated the market shock.

Russia is the third-largest producer and second-largest exporter of crude oil. In the 100 days since the invasion, oil was by far Russia’s most valuable fossil fuel export, accounting for $48 billion or roughly half of the total export revenue.

While Russian crude oil is shipped on tankers, a network of pipelines transports Russian gas to Europe. In fact, Russia accounts for 41% of all natural gas imports to the EU, and some countries are almost exclusively dependent on Russian gas. Of the $25 billion exported in pipeline gas, 85% went to the EU.

The Top Importers of Russian Fossil Fuels

The EU bloc accounted for 61% of Russia’s fossil fuel export revenue during the 100-day period.

Germany, Italy, and the Netherlands—members of both the EU and NATO—were among the largest importers, with only China surpassing them.

China overtook Germany as the largest importer, importing nearly 2 million barrels of discounted Russian oil per day in May—up 55% relative to a year ago. Similarly, Russia surpassed Saudi Arabia as China’s largest oil supplier.

The biggest increase in imports came from India, buying 18% of all Russian oil exports during the 100-day period. A significant amount of the oil that goes to India is re-exported as refined products to the U.S. and Europe, which are trying to become independent of Russian imports.

Reducing Reliance on Russia

In response to the invasion of Ukraine, several countries have taken strict action against Russia through sanctions on exports, including fossil fuels. 

The U.S. and Sweden have banned Russian fossil fuel imports entirely, with monthly import volumes down 100% and 99% in May relative to when the invasion began, respectively.

On a global scale, monthly fossil fuel import volumes from Russia were down 15% in May, an indication of the negative political sentiment surrounding the country.

It’s also worth noting that several European countries, including some of the largest importers over the 100-day period, have cut back on Russian fossil fuels. Besides the EU’s collective decision to reduce dependence on Russia, some countries have also refused the country’s ruble payment scheme, leading to a drop in imports.

The import curtailment is likely to continue. The EU recently adopted a sixth sanction package against Russia, placing a complete ban on all Russian seaborne crude oil products. The ban, which covers 90% of the EU’s oil imports from Russia, will likely realize its full impact after a six-to-eight month period that permits the execution of existing contracts.

While the EU is phasing out Russian oil, several European countries are heavily reliant on Russian gas. A full-fledged boycott on Russia’s fossil fuels would also hurt the European economy—therefore, the phase-out will likely be gradual, and subject to the changing geopolitical environment.

Source: DhakaTribune June 22, 2022 6:46 PM

If you truly want an idea of how well your portfolio is doing, you need something to compare the return with your invested capital.

It took you several months to save up and now you are finally determined to invest.

Perhaps it is for a near term personal goal or you just want to reap the benefits of greater wealth during retirement.

Whatever those goals may be, you are on the hunt for an asset manager.

However, how do you choose which firm or person to approach and how do you evaluate their performance?

Also, why is it so important you do so?

When searching for a suitable manager, there are a plethora of qualities to look for, such as integrity, talent, dedication and so on.

All of these can be grouped into three simple evaluation criteria which makes it easier to assess your manager. They are:

·         Reputation

·         Investment style

·         Performance

This guide will only focus on the third criteria, the manager’s performance which looks at the returns generated by the manager and the risks undertaken to do so.

We will briefly show you how to calculate and compare the metrics to benchmarks so you can get a solid picture of how well your manager is performing.

Keep in mind that the framework mentioned below can not only be used to judge mutual fund managers but also corporate fund managers (i.e., at banks, insurance companies or even individual portfolio performance).

Step 1: Calculate time-weighted returns

To understand time weighted returns, let us look at return calculation first.

Here, we introduce the concept of time-weighted return with an example.

1.      On December 31, 2021, an investor invested Tk1,000.

2.      As of June 2022, the portfolio grew to Tk1,200

3.      On July 1, 2022, the person invests Tk1,000 further, taking the total portfolio value to Tk2,200

4.      As of December 31, 2022, the portfolio value stood at Tk2,100.

A person who is unfamiliar with return calculation may decide to use the following equation to calculate their returns –

Return = (Ending value – money deposited) / (money deposited)

This would give us,

= (2100 – 2000)/ 2000= 5%

However, this return is inaccurate since it completely ignores the timing of fund injection and what particular returns are being generated using which particular amount.

Hence, any deposit or withdrawal can affect the calculated return of the portfolio, during the time period when those transactions took place.

Time weighted return (TWR) addresses this issue by separating the return on a portfolio into distinct intervals depending on whether cash was injected or withdrawn from the fund.

Consider the situation above, the return calculation can be broken down into two parts based on the cash flows:

·         From December 31 to June end,

Return = (1200 – 1000)/1000 = 20.00% (Holding period return)

·         From July to December 31,

Return = (2100 – 2200)/2200= -4.55% (Holding period return)

Now that we have holding period returns for both timelines, we can calculate the portfolio’s real return by finding out the geometric mean of the aforementioned returns.

Time-weighted return (geometric mean) = [(1 + 20.00%) x (1 + (-4.55%))] – 1 = 14.5%

The TWR equation would be the same if money had been withdrawn from the fund.

This method adjusts for the distorting effect of cash flows on returns.

Moreover, this method makes the returns comparable with other benchmark annual returns (since it can be annualized)

Step 2: Use appropriate benchmarks

The return of your portfolio is not very helpful by itself.

If you truly want an idea of how well your portfolio is doing, you need something to compare the return with.

This is where benchmarks come in.

Imagine a completely unmanaged portfolio with a similar investment structure to your portfolio (yours is being actively managed by a manager).

Here, the unmanaged portfolio is your benchmark, and your asset manager’s goal is to generate returns exceeding those generated by the former.

Usually, a country specific market index is considered the benchmark portfolio.

This index is a theoretical portfolio of all equity securities that are being traded within that region.

Its value is calculated based on the prices of the stocks within the index. In the case of Bangladesh, the Dhaka Stock Exchange Broad Index (DSEX) represents the market index.

However, this is not always the case.

The most important factor when considering which portfolio to use as a benchmark for comparison is its similarity to your portfolio.

Investors should look at the investment objective, asset allocation, and risk and return characteristics of the benchmark under consideration. 

For example, a portfolio consisting of exclusively fixed income securities such as bonds is likely to underperform than one consisting of exclusively stocks.

This is because bonds provide guaranteed interest payments which means they are relatively lower risk than stocks.

This makes the two incomparable (or unfair to compare).

Note: Managers mislabeling their funds and its relation to style drift

If an investor’s goal is to preserve the value of their wealth (capital preservation), their portfolio would contain low risk securities such as bonds, and fewer stocks.

Style drift occurs if the portfolio manager of this portfolio decides to change their investing style by investing in more stocks in hopes of reaping a larger return.

However, it can also occur naturally if the value of the stocks in the portfolio appreciates considerably more than the bonds.

To avoid the possibility of investing in a mutual fund which has strayed away from its objectives, always go through the fund’s portfolio statements for multiple years to understand trends and investment styles.

These list the types of securities the fund invests in.

For balanced funds and income funds, asset allocation should not consistently be equity heavy.

For growth funds, investments should heavily favor equity.

However, study the portfolio keeping the context of the economy at larger (fewer stock investments during periods of recession or slowdowns).

Step 3: Check risk level of the strategy

So far, we have successfully looked at the return aspects of investing (both calculation and comparison).

Now, we turn toward the risks. Two very common risk measures are discussed below.

Sharpe Ratio

The Sharpe ratio is calculated as:

Where,

Rp = Portfolio Return

RFR = Risk Free Return

σp = Standard Deviation of Excess Portfolio Returns

Here, the RFR is the return generated when no risk is involved.

Removing this component from the portfolio return isolates the excess return generated by taking risk.

You can refer to treasury bond rates for RFR.

The σp shows how much risk was undertaken to generate the excess returns.

Hence, this ratio illustrates the excess return generated per unit of risk.

Higher diversification in a portfolio tends to lower the standard deviation (again, depending on the asset classes), causing the Sharpe ratio to rise.

Investors can compare the Sharpe ratio of multiple portfolios to identify portfolios that only have high returns because they take on more risk.

The ideal portfolio is one which has a comparatively higher Sharpe ratio than its peers.

This means that the portfolio generates higher return per unit of risk.

Maximum Drawdown (MDD)

Imagine a graph where the returns of a portfolio are plotted on the y-axis against time on the x-axis.

Returns fluctuate immensely over time so you should have a graph with numerous peaks and troughs.

The concept of maximum drawdown calculates the percentage difference from the highest peak to the lowest trough before another new peak begins.

It quantifies the downside risk of a portfolio over a specified time frame.

The lower the maximum drawdown value the lower the losses experienced by the portfolio.

A 0% maximum drawdown means that the portfolio never lost money in that time frame and a hundred percent maximum drawdown means that the portfolio lost all its money in that time frame.

Note that the downside risk of your portfolio must be compared to that of a benchmark.

When the benchmark is down, a superior asset manager will keep losses at a minimum.

Therefore, you would prefer a portfolio with a maximum drawdown that is lower than that of the benchmark for the same time period.

Conclusion

There is a huge body of knowledge globally on evaluating investment performance.

CFA Institute for example has published a set of standards known as Global Investment Performance Standards (GIPS) to ensure fair disclosure and fair performance.

There is also a massive consulting industry that has grown to help asset deployers select the best asset managers.

Our article focuses on the very basic steps in return performance measurement.

However, for Bangladesh where the concept of investment return performance measurement is very new, this will be a good start.

Over time we can hope to catch up to international standards.

Rahma Mirza is an investment analyst at EDGE Research & Consulting Limited. Humayra Afroz is a former intern at EDGE AMC Limited

Source: TBS 13 July, 2022, 10:40 pm

As global market prices are still high, overall import bills are not coming down

As anticipated, foreign exchange reserves dipped below $40 billion and looks set to stay under stress in coming months given the global market volatility and the rising trend in imports, overshadowing the export growth.

The total value of import letters of credit (LCs) opened during July 2021-May 2022 was $84.85 billion, which was 43.10% higher than that of the same period of the previous year.

There have been some declines in booking for rice, onion, fruits, pulses and even petroleum goods, but those were far from having a palpable impact as the massive increase in LCs for wheat, edible oils, sugar, milk foods, fertiliser, apparel raw materials and capital machinery.

Some curbs have been in place to contain less-essential imports, but some major items cannot be checked to keep the market stable and industries running.

“We had to spend $9 billion more to import just eight products, including oil, wheat, fertilisers and gas. If their prices do not go down, the situation will be difficult to handle, because we have no control over them,” said newly appointed Bangladesh Bank Governor Abdur Rouf Talukder on Tuesday, the first day of his taking over.

Though global food prices show a declining trend, analysts do not expect much comfort from it given the global market’s volatile nature.    

As global market prices are still high, overall import bills are not coming down.

Next routine payments of Asian Clearing Union and selling of more dollars, if needed, to cool the currency market will erode the central bank’s reserves further.

ACU payments

Bangladesh has to clear the import bills to the Asian Clearing Union (ACU) every two months. The Bangladesh Bank has to spend an average of $2 billion every two months on this payment.

According to the last six-month data of the central bank, the reserve is reduced by $1 billion per month thanks to the ACU payment.  

At the end of February this year, the reserve was $45.95 billion, which dropped to $43.89 billion on 6 March after clearing $2.16 billion ACU payment.

Two months later, $2.24 billion was paid to ACU on 10 May that pulled down the reserve below the $42 billion mark from $44.11 billion on 9 May.

The Bangladesh Bank paid $1.99 billion to ACU last week, as the reserve fell to $39.77 billion from June’s $41.83 billion.

Dollar sales from reserve

The central bank is selling the US Dollar from the reserve almost every day to maintain the availability of the greenback. The central bank is providing dollar support in settling letter of credits for food and fuel import and government procurement.

The central bank sold the greenback worth a total of $7.62 billion in FY2021-22. However, the sales were not the same throughout the year. Dollar sales from reserves have picked up over the past couple of months.

In the first 13 days of the current fiscal year till Wednesday, $574 million was sold from the forex reserve. In other words, the central bank has been selling $1 billion a month, as the reserve stood at $39.70 billion on Wednesday.

What is the safe reserve?

Two decades back, a reserve able to finance the imports of three to six months was considered adequate, but the adequacy norms have changed. Now other factors like reserve as percentage of short-term debt, proportion of external debt, percentage of current account deficit are also considered.

The new governor said their goal is to take the reserves to a level enough for meeting the six-month import costs. 

A senior central bank official said the country’s reserve once was $30 billion. But it is now $40 even amid the global crisis.

“We do not see any frightening situations right now. However, we are taking steps to reduce our imports as well as the costs. We are also working on how to increase the export and the remittance inflow,” said the official.

Asked whether the import of specific products would be banned, the official replied in the affirmative. “If the situation turns ugly… time will say what steps we must take.”   

Salehuddin Ahmed, former central bank governor and a noted economist, told TBS that the current reserve level cannot be labelled as alarming.  

“We have to have a reserve equal to the minimum three-month import payment, but we have more than that. But the reserve fall in a short span of time is a matter of concern. If the reserve continues to go down like this, it could be an issue for us in the future,” he noted.

Noting that the emphasis should be on keeping the reverse at current levels, he said, “Taka should not be devalued further.”

“If Taka is depreciated further, issues like import bills and production costs will compound. Exporters will get some benefits, but it will increase the money flow and fuel inflation,” he said.

Salehuddin Ahmed stressed on trimming the import of less necessary items. He also called for verifying the repayment capacity of the private sector as he said the sector is availing a large chunk of foreign credits.        

“We should not default in repaying loans in the public and private sectors.”

Prof Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue (CPD), said the country even last year had a reserve to pay import bills for nine months, but it now fell to five months.    

“From that point of view, the reserve situation is of course concerning. But we need to consider commodity price hikes across the globe which have made imports costlier,” he said.

Prof Mustafizur appreciated the government for widening the LC margin to 100% for import of some items, discouraging import of some products and letting Taka float freely against the US Dollar.   

He suggested opting for a ban on car imports if required. “This will reduce the revenue, but the government should focus on stabilising the balance of payment.”    

Professor of economics at Dhaka University Dr Selim Raihan said widening trade deficit, huge pressure on reserve and foreign exchange have not been compensated by the export growth.

He appreciated that some policy measures were taken in the right direction– efforts to contain imports and some adjustments in the exchange market, which, he believes, would give export and remittance a further boost.

“It’s true that reserves dipped below the $40 billion mark, yet it is not like some other countries including Sri Lanka. We have taken some measures and some more measures are needed,” he said, suggesting further adjustment in exchange rate, if needed, to offer some relief to forex reserve holdings.

There might have been some adjustments and readjustments in global fuel oil, food and commodity prices, but overall price levels are still well above their pre-war levels. “Global market is volatile and price pressure will continue for energy, food and other commodities.

So there is no room to think that the situation is going to be normal,” he warned.

Though LC margins have been raised for non-essential items, additional duties or even temporary import restriction can be imposed if situation demands in future, suggests Prof Selim Raihan, executive director of Sanem, a local think tank.

“We have to leave behind the feeling of complacency about the reserves and policymakers should not be in a comfort zone any more so that we would never fall into crisis,” he said, urging more vigilance and effective implementation of import-curbing measures.

He also referred to the IMF’s earlier question against incorporating $7 billion export credit into forex stock. “There is a dilemma: is our reserve $40b, or it is $33b?” he pointed out.

Source: TBS 14 July, 2022, 12:00 pm

Lack of policy support, modern machinery and absence of interest-free easy loans are major bars to the sector’s growth, say insiders

The light engineering industry, considered to have a major export potential, continued to grow in the 2021-2022 fiscal year but still a long way from grabbing a sizable chunk of the massive $7 trillion global market.         

In the 2021-22 fiscal year, the sector saw a significant year-on-year growth of 50.4% to $795.63, from $529 million in the 2019-2020 fiscal, which was also when the government declared light engineering goods as “Product of the Year”.

Industry insiders say the sector has the potential to grow much more than it is doing now.

“We are nowhere close to where we can be,” said Golam Azam Tikul, president of Bogura Forum for Agro-machinery Manufacturing.

Lack of policy support from the government, shortage of modern machines and absence of interest-free easy loans are major hindrances for the sector’s growth, according to Tikul. 

Stakeholders say unhealthy working environments for workers, high prices of raw materials, lack of laboratories and certification systems are further hindering the industry’s development.

The market is also taking a blow due to production of counterfeit products in unauthorised factories and import of substandard products from India and China, they added.

After the light engineering products were declared as the Product of the Year for 2020, the government decided to set up industrial parks for the sector in five districts – Dhaka, Narayanganj, Jessore, Bogra, Gazipur and Narsingdi.

Besides, an industrial city project through the Bscic on a 50-acre land in Munshiganj is in progress at a cost of Tk316 crore and scheduled to be completed by 2022.

Muminur Rahman Mithu, an entrepreneur from Old Dhaka, said the price of plots in government-allocated industrial parks, including Munshiganj, is much higher than lands located elsewhere.

“Also, the area of land in these parks across the country is insufficient as compared to light engineering factories across the country. As a result, 80% of entrepreneurs will not really benefit from it,” he added.

Despite these obstacles, the sector’s export reached $529 million in FY21 from $292.92 million in the pandemic-hit 2019-20 fiscal.

Abdur Razzak, president of the Bangladesh Engineering Industry Owners Association (BEIOA), said, “Overall investment in the light engineering industry is about $15 billion and we are still below 1% of the $7 trillion global market.”

He also pointed out the industry meets about 20% demand of the local market while some 60% products are imported.

“If we get enough government land, state-of-the-art technology, pragmatic policies and low cost government land for setting up factories, this sector will not have to look back,” said Razzak.

He further said import tax for the sector’s raw materials ranges from 30-40% while the tax on importing finished products is only 1%.

“If this disparity is eliminated with industry-friendly policy support, it is possible to meet total local demand and also increase exports,” he added.

Before the budget of FY 2022-23, SME Foundation submitted 50 proposals to the National Board of Revenue for small and medium enterprises including light engineering, out of which 14 proposals were accepted in this budget. This includes providing income tax exemption for a period of 10 years to entrepreneurs engaged in agro-processing and agricultural machinery and all types of light engineering industries related to light engineering which will be used only in industries.

In the budget for the 2022-23 fiscal year, the government provided a 10-year tax-holiday for entrepreneurs who produce small parts and products for use in factories. 

Besides, there is a VAT exemption for the production and commercial distribution of Power Tiller and for the supply of locally collected scrap in the foundry industry.

Md Mofizur Rahman, managing director of SME Foundation said, “It is important to reduce the tax rate in the entire SME sector, including the light engineering sector.”

Citing the example of Japan, he said, “Their economy is 90% dependent on the SME while our SME sector accounts for some 20-25% although more that 75% employment is in this sector.” 

According to him, if people in the industry do not get help, it will be difficult to achieve the government’s target of 2041.

“Why should we need to spend time on updating the trade licence each year. The government can rather increase the fee and also the validity period,” he suggested.

The main markets for the light engineering products are Thailand, Japan, the Netherlands, India, South Korea, the United Kingdom, Taiwan and Pakistan.

Source: TBS Report

06 July, 2022, 07:50 pm

Bidding to set the cut-off price – the offer price at which shares get issued to investors – for the shares of Navana Pharmaceuticals which will raise capital from stock markets under the book building method ends on Thursday.

The share price will be determined based on offers made by eligible investors – institutions and high net worth individuals – in the electronic subscription system.

General investors will receive the primary shares at a 30% discount on the cut-off price.

The bidding for the company started from 5 pm on 4 July, which will continue till 5 pm Thursday.

The principal activities of the company are manufacturing, marketing and distribution of pharmaceutical products for human and animal health and sales of the produced items in the domestic and foreign markets.

The company is currently marketing 48 human and 48 veterinary products.

Navana Pharmaceuticals will expand its business

Starting its business journey in 1986, Navana Pharmaceuticals will now expand its business.

The company will raise capital of Tk75 crore by issuing shares to stock investors as an alternative source of finance instead of bank loans.

According to its IPO prospectus, the company will use the fund to renovate its cephalosporin unit and build manufacturing, utilities and engineering buildings.

The company has a factory at Rupshi in Narayanganj. The general production unit and the veterinary production unit went into operation in 1986 and 2003 respectively.

Financial status

The financial accounts for the last five years indicate that the company’s business in the local market and exports have been steadily increasing.

Its products are exported to Myanmar, Vietnam, Sri Lanka, Kenya, and Hong Kong.

Navana Pharmaceuticals had total revenue of over Tk243 crore in fiscal 2017-2018, of which over Tk223 crore was local sales and Tk10.82 crore was exports.

Five years later, in fiscal 2020-21, the company’s revenue increased to Tk360 crore, of which domestic sales are Tk336 crore and exports are Tk24 crore.

In the first nine months of fiscal 2021-22, its earnings per share (EPS) were Tk2.39.

Navana Pharma / Share Price / bidding

Futureproofing – has been the preoccupation of bKash, the company that revolutionized the mobile financial service in Bangladesh, in recent years.

Alif Group has expressed its interest in buying 25 percent shares in BD Welding at an agreed rate from ICB

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Bangladesh Welding (BD Welding) Electrode Ltd will change its category from “Z” to “B” on the stock market by issuing dividends.

The company will change its category in order to implement the transfer of its shares held by the state-owned Investment Corporation of Bangladesh (ICB) to Alif Group – a local private sector investor.

Alif Group has expressed its interest in buying 25 percent shares in BD Welding at an agreed rate from ICB.

Earlier, in July 2019, Alif Group and ICB signed a memorandum of understanding (MoU) for the acquisition of the shares. However, the deal was not implemented as BD Welding has been in the “Z” category of the stock market since 2015.

The company has also failed to hold its annual general meeting (AGM) since the 2018 financial year.

As per the securities law, ownership of a company that fails to issue dividends and hold annual general meetings cannot be transferred.

Owner company ICB sought release from this law from the Bangladesh Securities and Exchange Commission (BSEC), to sell its entire holdings to Alif Group, but the regulator did not agree with ICB.

Therefore, as an alternative solution, ICB, on behalf of the company, filed a petition with the High Court to hold the AGM and board meeting of BD Welding for the financial years 2018-19 and 2019-20.

In February this year, the High Court gave permission to BD Welding to hold a board meeting and an AGM.

After the permission was granted, BD Welding held its board meeting on Sunday.

The company’s board of directors has recommended no dividend for the year ended on June 30, 2018. However, it recommended a one percent stock dividend for the year ended on June 30, 2019.

The dividend would be approved at the AGM dated September 17, 2020. To ensure shareholders’ participation, the record date is set for August 31 this year.

BD Welding has posted a loss per share of Tk0.08 for the year ended on December 31, 2019. Its net asset value per share was Tk11.61.

SM Nurul Islam, managing director of BD Welding, who currently owns around five percent of the company, said that after the dividend approval at the AGM, the company will move from “Z” to “B” category. Therefore, ICB will face no troubles in selling the shares to Alif Group.

He added, “The company is now facing a cash crisis to set up a new factory. We have not been able to manage funds from any other sources because of ICB’s obligation. Alif wants to invest in BD Welding as the owner of the company. However, due to these complications, it has not invested yet. I hope in the next few months this issue will be resolved and we will get money to run this company.”

Earlier, in 2017, BD Welding sold its land in Chattogram to BSRM Group to repay a bank loan. Recently, the company purchased land in Dhamrai to set up a new factory with existing machinery.

In 1999, the company entered the stock market to collect funds in setting up an oxygen plant in Chattogram. It was competing with the multinational Linde Bangladesh and some new entrants until its raw material imports were disrupted because of a lack of banking support due to defaulted loans.

Losing the edge gradually pushed the company lower and it ended up halting production.

In 2009, five out of eight sponsors sold their entire holdings to the ICB and now the state-owned investment entity is chairing and controlling the BD Welding board.

The company’s paid up capital is Tk42.92 crore. Out of total shares, general shareholders hold 65.39 percent.

The closing price for the company’s shares was Tk22.20 per share on the Dhaka Stock Exchange on Monday.

Source: TBS