Grameen Mutual Fund One Prospectus Published

Bangladesh th Weekly Market Review 326 Issue J u l y 0 2, 2005 Year 7 No. 35

Grameen Mutual Fund One prospectus published SEC in disagreement with DSE The much-awaited prospectus of Grameen One, first scheme Securities and Exchange Commission (SEC) and Dhaka Stock of Grameen Mutual Fund One, has been published on June Exchange (DSE) seem to be at loggerheads over listing of 29, 2005 in the daily Prothom Alo and The Financial Express. some companies with weak fundamentals. Both sides remain The Tk170m scheme has been sponsored by Grameen Bank, firm on their own stands. SEC explained that it approved the the pioneering institution of providing microcredit invented by initial public offering (IPO) of the companies after they fulfilled the visionary founder Dr Muhammad Yunus with Tk16.5m. Its necessary criteria and the companies got consent on the basis Trustee, Grameen Fund, has 2 eminent persons as members, of their previous performances. However, DSE argued that it Mr Faizur Razzak, the ex-Secretary and Mr Hafizuddin Khan, had already made some negative observations about some the former Advisor to the Caretaker Government of 2001. The companies and informed the regulator. These companies may first scheme has also been subscribed by some 23 leading not be allowed for listing with DSE. Performance of general financial institutions including banks, insurance companies, insurance companies that have launched IPOs in June is not non-banking financial institutions and merchant banks to the satisfactory and investors are at risk of losing a portion of their extent of Tk103.5m, while the rest Tk50m is shortly going to capital, DSE observed. Earlier in a letter it made observation be subscribed by the general investors. about these general insurance companies and hinted that the Government borrowing spurt DSE listing committee may not approve the applications of these companies considering the interest of investors. SEC Government's bank borrowing in the last fiscal year shot up by allowed it to issue Tk90m IPOs despite strong objection from a staggering 203% from the previous year, mainly due to huge the DSE that claims to have informed SEC that Nitol Insurance borrowing in May and June. The net borrowing of FY2004-05 should not be allowed to issue IPO due to poor performance was Tk36.30b, which was Tk11.96b in the previous year. Until and decline in profitability in recent times. Earlier DSE listing April 2005 the borrowing status was negative as government committee declined to approve Daffodil Computers, Khaza paid back Tk6.30b to banks suggesting that the government Mosaic, Jago Corporation, and JMI-Bangladesh Company Ltd. took more than Tk40.00b from banks in past 2 months alone. These securities are now being traded on Chittagong Stock On the last day of FY05, the government borrowed Tk4.07b. It Exchange at below their face value. SEC recently approved exceeded the Tk36.01b target fixed in the revised budget of prospectus of 4 non-banking financial institutions (NBFIs) to FY2004-05. The government has to borrow excessively from go public including Progressive Life Insurance, Sonar Bangla the banking sector in the last quarter, as the bulk of the annual Insurance Company, Premier Leasing and Islamic Finance development budget is usually spent in that period. In FY05, and Investment Ltd. Before that SEC okayed IPOs of Summit only 43% of the development budget's local component was Power, Grameen Mutual Fund, Prime Finance & Investment, spent in the first 3 quarters and the remaining 57% in the last Asia Pacific Insurance and Nitol Insurance Co. Ltd. However, quarter, which explains the borrowing bulge in the fag end of market operators apprehend that approval to 9 companies in a the last fiscal year. It is learnt that in June last, there were single month and allowing them to go public in a short span of days when the Finance Division released more than Tk5.00b time may have a negative impact on the market. Meanwhile, development funds a day. A huge deficit in revenue (around SEC has cancelled 62,674 beneficiary owners (BO) accounts, Tk5.50b in NBR) and shortfall in sales of savings instruments as they were found fake, of which 26,004 were linked to the were two other factors forcing the government to borrow more Premier Bank IPO alone. Currently, there are some 0.42m BO from banks. Until April 2005 the government could realize only accounts registered through various depository participants Tk21.83b of the Tk30.17b revised net sales target of savings (DPs). Earlier SEC identified and cancel fake or irregular BO instruments. The figure was Tk34.67b in the corresponding accounts following the scam with Premier Bank IPO. SEC also period in FY2003-04. Though the development expenditure instructed the DPs to scrutinize BO accounts to find out the was trimmed from Tk220.00b to Tk205.00b in FY2004-05, it irregular and fake ones. It also directed the DPs to submit the could not achieve the revised target. Bank borrowing grew due list of all valid BO accounts to the SEC, Central Depository to both a rise in revenue expenditure and shortfall in revenue Bangladesh Ltd (CDBL) and the stock exchanges by June 30, collection. Of the net borrowing in FY2004-05 some Tk36.27b 2005. came from the central bank and the rest from commercial banks. It is generally held that excessive borrowing from the Deep seaport project proposed central bank heightens the inflationary pressure. According to The government has received proposals from 24 international a central bank statistics, the outstanding bank borrowing stood consulting firms to carry out a $2.0m feasibility study on a at Tk241.06b in June 2005 compared to Tk204.75b in June planned deep seaport in Bangladesh. Of the 24 firms, 19 are 2004. The central bank officials, however, maintain that the foreign while 5 are Bangladeshi. The shipping ministry poised huge borrowing would not have any negative impact on the to estimate costs and investment needed for development of inflationary situation as it was done under a definite program the seaport in different phases, of which the short term (5-15 and the central bank monitored the situation cautiously. Since years) emphasized that involves construction of a new port in the borrowed money is lying with the banks as government's a greenfield site and identifying components and public-private deposit and the BB has withdrawn the money through reverse allocation of costs. The deep seaport will help address the repo (repurchase agreement), money supply in reality would chronic congestion problem in the key Chittagong port, which not increase as is apprehended. deals with nearly 90% of the country's 2-way external trade.

A S S E T & I N V E S T M E N T M A N A G E M E N T S E R V I C E S O F B A N G L A D E S H L I M I T E D Chandrashila SuvastuTower (5th floor), 69/1 Panthopath, Dhaka 1205, Bangladesh Tel : (+88-02) 862 1821-3; Fax : (+88-02) 862 1109; e-mail : [email protected]; web: http://www.aims-bangladesh.com

This week’s data runs from 23 June 2005 to 30 June 2005 Technical Talk

Stock Market Movement Market slides The index continues to slide during the past few days, apparently due to the general investors’ collection of cash from the sale of shares to finance the forthcoming initial public offers (IPOs). The Securities & Exchange Commission has already approved a number of IPOs to raise fund from the public. The bearish trend is likely to persist for a longer time as the IPOs include some financial sector shares, which are generally considered lucrative. Small investors find the situation a little grueling as these IPOs have little gap between one another that

offers a hard choice for every investor.

DSE General Index placed at 1699.26 went down by 23.72 points This Week Last Week +/- % (1.38%), against 1722.98 points last week. At the same time, average DSE General Index 1,699.26 -1.38 Average Daily Turnover, Tk 212,411,946 -11.12 daily turnover fell by 11.12% and positioned at Tk212.41m against Market Capital, Tk 206,298,857,472 -1.28 Tk238.99m of the previous week. Furthermore, market capitalization Market PEx* 14.18 also dropped by 1.28% to close at Tk206.29b ($3.17b) at the Market PBRx* 2.37 weekend. Market EPS, Tk per Tk100* 30.03 Market Dividend Yield,%* 2.26 During the week, the blue chip DSE-20 put on view in raised by 29.66 1 Year Cap. Appreciation, % 14.74 points (1.61%), and closed at 1872.57 (base 1000 on 01 Jan 2000) * PE is based on latest reported data of listed companies, which registered positive points against 1842.91 points last week. earning, PBR is based on latest reported book values, and companies with negative book value have been excluded. The companies earmarked as 'B' and 'Z' category Based on the daily charts of the DSE movement, which has been by SEC have also been excluded from calculation. **1 year Holding Period Yield used to track short-term trends, the technical readings are as under: Top Gainers Moving Average Closing During the week, the DSE General Price Index moved above both the Price (Tk) 9-day and the 18-day moving average line. Company This Last Change Turnover Week Week % (‘000 Tk.) Relative Strength Index (RSI) Eagle Star Textile 1.90 1.50 26.67 1,634 Pharmaco Internati 51.50 42.00 22.62 180,370 The RSI indicator showed upward trend during the week. Currently Dutch-Bangla Bank 1,935.50 1,625.00 19.11 534,521 RSI is 57.70 point, indicating a sell signal. Saleh Carpet 0.80 0.70 14.29 1,387 National Polymer 309.25 276.25 11.95 153,092 Price Movement of AIMS First Guaranteed Mutual Fund Excelsior Shoes 7.50 6.75 11.11 56,004 AIMS1STMF (1.58000, 1.59000, 1.55000, 1.57000, +0.01000) 2.1 Dhaka Fisheries 28.00 25.25 10.89 446 2.0 Tallu Spinning 85.00 77.00 10.39 272 1.9 Tamijuddin Textile 48.75 45.00 8.33 406 1.8 Confidence Cement 115.25 107.50 7.21 113,307 1.7 1.6 Top Losers 1.5 1.4 Closing Price (Tk) 1.3 Company This Last Change Turnover 1.2 Week Week % (‘000 Tk.) 1.1 Reliance Insurance 500.00 769.50 -35.02 4,167 Aug Sep Oct Nov Dec 2005 Feb Mar Apr May Jun Jul GB JV Food 1.10 1.30 -15.38 1,717 Eastern Bank 901.50 1,051.75 -14.29 2,373,343 Sector Indicators Bangladesh Dyeing 22.00 25.25 -12.87 5,379 Raspit Data 3.30 3.70 -10.81 14,675 Sectors PE PBR EPS DY Sector Index Fine Foods Limited 4.20 4.70 -10.64 8,075 % This Last Hakkani Pulp 5.40 6.00 -10.00 5,400 Week Week Maq Enterprise 7.00 7.75 -9.68 363 Agro Processing 8.23 2.82 47.39 7.46 122.15 124.55 Padma Cement 3.90 4.30 -9.30 76,842 Cement 19.66 1.81 -7.05 0.24 491.92 497.38 Alpha Tobacco 11.70 12.90 -9.30 98 Ceramics 11.99 0.83 11.13 11.68 65.65 66.65 Commercial Banking 18.57 4.19 25.49 1.65 487.11 494.56 Top Turnover Companies Engineering 13.9 2.53 18.4 4.49 132.83 136.46 Fishery 8.21 0.44 2.98 6.41 62.5 63.45 Closing Food Processing 13.08 0.5 2.11 5.65 64.76 65.17 Price (Tk) Fuel and Power 12.04 2.09 98.52 2.31 152.62 152.6 Company This Last Change Value (‘000 Tk.) General Insurance 14.66 1.75 19.56 3.61 198.96 207.64 Week Week % Information and Comm. 25.39 3.49 12.67 2.46 451.33 461.85 Beximco Pharma 85.70 86.80 1.28 31,734,868 Jute 15.81 0.46 -24.07 2.32 130.87 132.53 Dhaka Bank 491.00 495.50 0.92 9,668,248 Leasing 10.08 3.08 66.01 3.01 247.63 250.39 Southeast Bank 648.25 650.00 0.27 9,323,294 Leather 13.49 0.63 9.65 1.14 132.21 132.78 Square Pharma 3,750.75 3,649.75 -2.69 9,260,354 Life Insurance 1.89 22.42 533.12 1.16 648.42 636.44 National Bank 501.00 504.50 0.70 8,395,886 Miscellaneous 9.83 1.41 11.48 4.01 123.54 125.61 Padma Textile 26.50 27.80 4.91 8,161,893 Mutual Funds 11.48 1.35 15.72 4.2 202.84 205.8 Pubali Bank 1,254.25 1,242.00 -0.98 6,930,338 Paper and Printing 2.04 0.21 -13.47 13.23 39.89 42.52 MIDAS Financing 333.50 338.50 1.50 6,681,013 Pharma.and Chemical 17.56 3.88 55.73 2.19 277.07 280.89 Mutual Trust Bank 369.75 371.25 0.41 6,154,702 Services &Real Estate 14.14 0.49 4.1 3.45 80.81 78.63 Prime Bank 578.25 570.00 -1.43 5,760,896 Textile 4.8 0.69 9.7 5.68 46.36 46.12 Based on latest reported year of listed companies. Companies, which did not hold AGM for last two years, and new companies yet to report audited accounts have not been included in the calculation of the indicators. Companies that registered negative earnings have been excluded from PE calculation and those that have a negative book value have been excluded from calculation of PBR. Base period Index is 100 as on Jan 01, 2001.

Book Closure Top 20 Market Capital Least 20 Market Capital Name of the Share transfer & Book Year AGM Divide Company closure end Date nd Tk million Tk million Pro.% Lafarge Surma Cement 26,668 Modern Industries 1.95 From To Square Pharma 15,767 Petro Synthetics 2.10 Central Insur 10-07-05 23-07-05 12-04 23-07-05 10 GQ Ball Pen 13-06-05 30-06-05 30-06-05 25 Islami Bank 11,322 The Engineers 2.22 Confidence Ce 23-06-05 06-07-05 12-04 06-07-05 5 Quasem Textile 2.62 Rupali Bank 7,647 Apex Footwear 23-06-05 19-07-05 12-04 19-07-05 20 Eastern Bank 7,464 Texpick Industries 2.68 Sino Bangla 24-06-05 14-07-06 06-04 14-07-05 5 BATBC 7,116 Rahima Foods 2.75 Sonargaon Text 02-07-05 16-07-05 12-04 16-07-05 10 Prime Bank 5,700 Padma Printers 3.20 Rupali Insuran 07-07-05 26-07-05 12-04 26-07-05 15B Beximco Pharma 4,859 National Oxygen 3.75 Ambee Pharma Record date 24-7-05 12-04 04-08--05 25 Record date Southeast Bank 4,402 Paper Processing 3.98 Islami Bank 15-08-05 12-04 16-09-05 1B:5 Central Insuran. 10-07-05 23-07-05 12-04 23-07-05 10 Dutch-Bangla Bank 3,912 Metalex Corporation 3.99 Ambee Pharma Record date 24-07-05 12-04 04-08-05 25 Azadi Printers 4.06 Export Import Bank 3,901 Aramit Ltd. 07-08-05 27-08-05 12-04 27-08-05 25 UCBL 3,761 Saleh Carpet 4.42 Aramit Cement 07-08-05 27-08-05 12-04 27-08-05 35 Bank Asia Ltd. 3,411 Tulip Dairy 4.80 Confidence Ce 23-06-05 06-07-05 12-04 06-07-05 5 Dhaka Bank 3,289 M Hossain Garments 4.80 AIMS First GMF 30-06-05 07-07-05 06-05 1:1 Heidelberg Cement 2,865 Quasem Silk 4.86 Delta Life 21-07-05 27-07-05 12-04 27-07-05 30, 20B Mercantile Bank Ltd. 2,782 Rabeya Flour 4.89 Aramit Ltd. 07-08-05 27-08-05 12-04 27-08-05 35 Mutual Trust Bank Limited 2,673 Mona Foods 5.40 National Bank 2,605 Bangladesh Hotels 5.40 Last Initial Public Offering Glaxo Smith Himadri 5.44 2,530 Company Subscription IPO Private Purpose of the issue Pubali Bank 2,484 Ragngamati Foods 5.50 Period (M.Tk) Placement

Corporate Announcements (M.Tk.) Popular Life April 24 – 28, 2005 45.00 - Statutory requirement PRIMEINSUR: Company will be placed in " Z" category Insurance Fareast Islami May 07 – 11, 2005 45.00 - Statutory requirement from existing "A" category with effect from 01 September Life Insurance subject to the approval of no dividend in the forthcoming People’s Leasing & May 14 – 18, 2005 63.60 42.40 To be utilized for lease AGM to be held on 31 August 2005. Financial Services finance and term financing. Prime Finance & July 30 - 03 Aug, 50.00 - ABBANK : audited accounts as on 31 Dec 2004, the Bank Investment 2005 has reported net profit of Tk. 90.07 m with EPS of Tk18.19 Summit Power August 27-31, 280 .00 - Business Expansion as against Tk.17.12 m and Tk. 3.63 as on 31 Dec 2003. Limited 2005 Asia Pacific August 21-25, 105.00 - Business Expansion EBL : audited accounts as on 31 Dec ‘04 with net profit of General Inurance 2005

Tk. 483.37m and EPS of Tk. 58.38 as against Tk 357.77 m

and Tk. 43.21 as on 31 Dec 2003. Top 20 Beta Least 20 Beta FEDERALINS : stock dividend @ 10% for the year 2004. Date of AGM : 07 September 2005. Satndard Ceramic 4.69 Meghna Condense Milk -1.45 PHARMACO: audited accounts as on 30.06.04 with net loss NCC Bank 2.04 Chittagong Vegetable -1.14 of TK.(4.07)m and EPS of TK.(20.35) as against Pubali Bank 1.72 Meghna Pet -0.99 TK.(26.05)m and TK.(130.27) as on 30 June 2003. Standard Bank Limited 1.60 Bangladesh Plantation -0.56 Moreover, accumulated loss of the company was Mutual Trust Bank Limited 1.42 Metalex Corporation -0.46 TK.(57.37)m as on 30 June 2004. Lafarge Surma Cement Ltd. 1.42 Hakkani Pulp -0.40 CMCKAMAL : company will be placed in "Z" category from Beximco Ltd 1.41 Bangladesh Zipper -0.34 existing "B" category with effect from 2nd July 2005. Dhaka Bank 1.40 Modern Industries -0.28 NBL : audited accounts as on 31 Dec 2004 with net profit of Heidelberg Cement 1.40 Bangla Process -0.26 TK. 170.02m and EPS of TK. 32.93 as against TK. 88.12m UCBL 1.40 Eagle Star Textile -0.24 & TK. 17.07 as on 31 Dec 2003. Export Import Bank 1.38 Quasem Textile -0.17 SANDHANINS :audited accounts as on 31 Dec ’04. has First Lease International Ltd. 1.36 Savar Refractories -0.16 reported increase in life revenue account of Tk. 237.07m Rupali Bank 1.36 Mithun Knitting -0.15 with total life insurance fund of Tk. 701.45m as against Square Textile 1.35 BLTC -0.11 Tk.157.74m and Tk.464.38m as on 31 Dec 2003. Prime Bank 1.34 Sonali Aansh -0.08 ABBANK : stock dividend @ 5% for the year 2004. Date of Mercantile Bank Ltd. 1.34 Desh Garments -0.05 AGM: 30 November 2005. United Leasing 1.31 Stylecraft -0.04 National Bank 1.29 3rd ICB MF -0.04

Recently Listed Apex Foods 1.28 Hill Plantation -0.03 Bangladesh Online 1.28 Quasem Silk -0.02

0Company Subscription Period IPO Private Trading started *Beta indicates volatility of the stock's weekly return relative to the market since last (M.Tk) Placement on DSE on 200 days. (M.Tk) Global Insurance Jan 29 – Feb 09, 90.00 - April 16, 2005 2005 Agrani Insurance January 09 – 13, 90.00 - March 05, 2005 Yawer Sayeed, Managing Director & CEO 2005 Wasiq al Azad, Head of Operations ICB AMCL Islamic Oct ober 12- 17, 70.00 30.00 January 05, 2005 Mutual Fund 2004 Laila Mahmuda Shilpi, Manager Mercantile Insurance August 28- 90.00 - December 07, Sukumar D’Costa, Manager-Accounts Sept.01,2004 2004