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Bond investor files petition to wind up Golden Harvest Agro

by fstcap
written by fstcap

Golden Harvest Agro, to “expand its business”, issued a Tk50 crore redeemable, non-convertible corporate bond in 2017 through private placements, following the Bangladesh Securities and Exchange Commission’s nod in December 2016

Delta Life Insurance Company has filed a court plea to wind up Golden Harvest Agro PLC to recover its investments in the agro manufacturers bond issued in 2017.

“As all efforts to recover the money failed, our client Delta Life had no other option, as the insurer itself is a publicly listed company and has accountability to its clients and shareholders,” petitioner’s lawyer Mustafizur Rahman Khan told TBS yesterday.

The high court bench of Justice Khizir Ahmed Chowdhury, on 27 January ordered the petitioner to publish a notice in two newspapers within three weeks and submit a compliance report within 30 days from the date of the notice’s publication.

Golden Harvest Agro, to “expand its business”, issued a Tk50 crore redeemable, non-convertible corporate bond in 2017 through private placements, following the Bangladesh Securities and Exchange Commission’s nod in December 2016.

Delta Life Chief Financial Officer Milton Bepari told TBS, “We invested Tk10 crore in the Tk50 crore bond where the company promised 10% to 11.5% annual interest alongside gradual redemption of bond units from the end of the second year.”

 

The company failed to pay back from the very beginning of the redemption period and the bond’s seven-year tenure expired already. It owes over Tk25 crore to Delta Life and neither legal notices nor Delta’s complaints to the securities regulator helped a recovery.

Section 241 and 242 of Companies Act allows lenders or bond investors to file pleas for winding up of a debt defaulter company, said Mustafizur.

 

If the court, upon hearing both the parties, is satisfied that the bond issuer is unable to pay back, it may appoint a liquidator to sell off the company’s assets and use the sale proceeds to pay back the deprived bond holders, lenders.

 

In 2013, Golden Harvest, a pioneering ready to cook products manufacturer, raised Tk75 crore from the stock market through an initial public offering. Again in 2019, the company raised Tk89.93 crore by issuing right shares.

Having Tk52 crore revenue in 2011, the company grew it to Tk224 crore in six years, which dropped to less than Tk100 crore again in the recent years due to its business decline.

 

Auditor raised its red flag about the company’s surged liabilities and high debt servicing costs already surpassing 36% of the total expenses.

Golden Harvest Company Secretary Mohammad Jafar Ali was not reachable over phone for a comment on the petition.     https://www.tbsnews.net/economy/stocks/bond-investor-files-petition-wind-golden-harvest-agro-1057006

 

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FeaturedFinanceNational

পৌনে ৩ বছর পর সুদহার কমানোর পরিকল্পনা

by fstcap
written by fstcap

 

  • নীতি সুদহার ২৫ বেসিস পয়েন্ট কমছে
  • বেসরকারি ঋণ প্রবৃদ্ধির লক্ষ্য থাকছে অপরিবর্তিত
  • বিনিয়োগ বাড়াতে নীতি সুদহারে আপস
  • সুদ কমিয়েই লড়বে উচ্চ মূল্যস্ফীতির সঙ্গে
  • প্রতিদিন রেফারেন্স রেট ঘোষণা করবে মুদ্রাবাজার
 

চলতি ২০২৪-২৫ অর্থবছরের দ্বিতীয়ার্ধের (জানুয়ারি-জুন) মুদ্রানীতি ঘোষণা হতে যাচ্ছে ১০ ফেব্রুয়ারি। এবারে মুদ্রানীতিতে সুদহারের বিষয়ে বাংলাদেশ ব্যাংক নতুন সিদ্ধান্ত নিয়েছে। বিশেষত জানুয়ারি মাসে মূল্যস্ফীতি দুই অঙ্কের ঘর থেকে এক অঙ্কে নেমে আসায় বাংলাদেশ ব্যাংক নীতি সুদহার ২৫ বেসিস পয়েন্ট কমিয়ে ১০ শতাংশ থেকে ৯.৭৫ শতাংশ করার প্রাথমিক সিদ্ধান্ত নিয়েছে। এই সুপারিশ বাস্তবায়িত হতে হলে তা বাংলাদেশ ব্যাংকের বোর্ড সভায় অনুমোদন করাতে হবে। সূত্রমতে, বোর্ড সভার অনুমোদন পেলে ওই দিন বেলা ৩টায় সংবাদ সম্মেলনে মুদ্রানীতি ঘোষণা করা হবে।

 

এ বিষয়ে জানতে চাইলে বাংলাদেশ ব্যাংকের মুখপাত্র ও নির্বাহী পরিচালক আরিফ হোসেন খান আজকের পত্রিকাকে জানান, কেন্দ্রীয় ব্যাংকের বোর্ডে অনুমোদন পাওয়ার পর আগামী সোমবার মুদ্রানীতি ঘোষণা হতে পারে। নতুন মুদ্রানীতিতে সুদের হার বৃদ্ধির কোনো পরিকল্পনা নেই। পাশাপাশি মূল্যস্ফীতি নিয়ন্ত্রণ, বিনিয়োগ বৃদ্ধি এবং বৈদেশিক মুদ্রার বিনিময় হার স্থিতিশীল রাখার বিষয়ে বিশেষ গুরুত্ব দেওয়া হবে।

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FinanceStock Market

GP to pay record dividends for 2024, compensating for last year’s poor payout

by fstcap
written by fstcap

Despite the challenging macroeconomic environment, Grameenphone secured a 10 per cent year-on-year growth in profit to Tk 36.4 billion in 2024, the highest in three years, supported by operating efficiency.

The leading telecom operator declared a 170 per cent final cash dividend, buoyed by the profit growth, resulting in 330 per cent cash dividends in total for 2024. That is the highest-ever dividend by GP since its listing.

The return on investment promised by the company is likely to regain confidence of shareholders who were unhappy with the lowest cash dividends paid for 2023 in 13 years.

The dividends for 2024, including 160 per cent interim cash dividends disbursed earlier, will be equivalent to 122.73 per cent of the profit after tax, earned in the year.

The telecom operator made a profit of Tk 26.89 per share in 2024, up from 24.49 per share the year before, according to a stock exchange filing on Tuesday.

However, investors will get Tk 33 per share for 2024, meaning the telecom operator will provide an additional Tk 6.11 per share from retained earnings or the reserve.

Due to the record dividend declaration, GP’s dividend yield will reach a 12-year high to 9.75 per cent in 2024.

However, GP reported revenue of Tk 150.94 billion for 2024, registering a 4.9 per cent year-on-year de-growth, owing to cautious consumer spending, particularly on data, in an adverse business climate. High inflation is another major factor behind low revenue.

“The current economic climate has brought numerous challenges, including rising inflation and decreasing GDP, putting significant strain on businesses across various sectors,” said Yasir Azman, CEO of Grameenphone, in a statement issued on Tuesday.

“We have experienced some pressure on both top-line and bottom-line growth during the second half of the year. I want to emphasize that we remain focused on delivering long-term value and stability for investors.

“We expect revenue will gradually improve as the economy recovers and growth in mobile data usage and handset penetration resumes,” said Mr Azman.

Earnings before interest, taxes, depreciation, and amortization (EBITDA) rose to Tk 96 billion in the year. GP maintained an EBITDA margin of over 60 per cent in 2024.

During the year, the mobile operator’s subscriber base increased by 2 million to 84.3 million. Of them, 56.9 percent or 48 million subscribers are using internet services.

“Sustainability, innovation, and AI are on top of GP’s strategic agenda. We are integrating sustainability into every aspect of our supply chain to ensure that standards are met across the board,” said Otto Risbakk, chief financial officer of GP.

“We will continue investing in cutting-edge technology, expanding our reach, and enhancing our customer experiences.

“Over the next few years, we’ll be realizing the advantages of our proactive investment in platforms and artificial intelligence that will lead to automated operations, autonomous network management, and advanced customer engagement,” added Mr Risbakk.

GP invested more than Tk 18 billion in 2024 for better network coverage and expansion, focusing mainly on 4G network, along with 2600 MHz spectrum deployment to ensure improved network experience for customers.

“The strong balance sheet allows us to continue to invest with a long-term view, even in periods with a challenging economy, like this year, and it also provides the basis for an attractive and predictable dividend policy,” said the CFO.

The benefits of pioneering investments in various innovative platforms and artificial intelligence (AI) will be visible in the coming years, he added.

Stock Performance

Having remained stuck on the floor at Tk 286.7 per share on the Dhaka Stock Exchange for more than 18 months, GP’s stock slid gradually to Tk 222.2 each share in June last year after the removal of the price restriction in February of the year.

After the fall of the Hasina-led government on August 5, the stock surged 40 per cent within 10 days to reach Tk 387 per share due to over-enthusiasm among investors. Since then, GP’s stock has experienced a correction.

It closed at Tk 338.6 per share on the prime bourse on Tuesday, gaining 0.47 per cent over the previous day.     https://today.thefinancialexpress.com.bd/stock-corporate/gp-to-pay-record-dividends-for-2024-compensating-for-last-years-poor-payout-1738690910

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FeaturedFinanceStock Market

Finance adviser seeks 3 months to reduce inflation

by fstcap
written by fstcap

Further steps would be taken to stabilise the prices of essential commodities during Ramadan, said Salehuddin Ahmed

It will take another two to three months for inflation to decrease as government measures take effect, Finance Adviser Salehuddin Ahmed said today (4 February).

Acknowledging that high inflation is causing difficulties, he said several initiatives have already been implemented to address the issue.

He made these remarks while speaking to journalists after a meeting of the Cabinet Committee on Government Purchases at the Secretariat.

The adviser also stated that further steps would be taken to stabilise the prices of essential commodities during Ramadan.

The government expects these measures to help bring average inflation down to 6%–7% by June.

According to data from the Bangladesh Bureau of Statistics (BBS), monthly overall inflation has remained above 9% for over two and a half years.

In December, overall inflation stood at 10.89%, while food inflation was recorded at 12.92%. Food inflation had peaked at 14.10% in July.    https://www.tbsnews.net

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FinanceNational

January inflation slips below double-digit level to 9.94pc

by fstcap
written by fstcap

Overall inflation dropped to 9.94 per cent in January as cheaper winter vegetables tamed its rate but food inflation yet stayed high pushed by pricey staples.

A decline of approximately 1.0-percentage point from the December rate took the overall inflation down double-digit level last month, Bangladesh Bureau of Statistics (BBS) revealed Tuesday.

This happens to be the first time in three months that inflation edged down to a single-digit level. The last time it was below 10 per cent was in September when it stood at 9.92 percent, according to data produced by the national statistical organisation.

The decline in inflation was primarily driven by falling vegetable prices, which contributed most to the lower January inflation rate.

However, food inflation remained high in both rural and urban areas, exceeding 10 per cent, as the market of staples stayed wayward. In January, urban food inflation stood at 10.95 per cent while rural food inflation was recorded at 10.18 per cent.

The 12-month moving average inflation rate remained above 10 per cent at 10.34 per cent, unchanged from December.

A growing concern is the steady increase in non-food or core inflation in both rural and urban areas.

Officials at the central bank, which is implementing a tight monetary policy to curb inflationary pressures on the economy, said the prices of staples and edible oils remained high in retailing. Without these hikers, the overall inflation rate could have been lower.

They hold the hope that the downtrend in inflation would continue in the months ahead. Meanwhile, Finance Adviser Dr Salehuddin Ahmed takes until June

for inflation moderation to 6.0-7.0 per cent. Speaking to reporters the same day, he said Bangladesh’s economic situation was worse than Sri Lankan’s for wanton plunder here, which made it hard for the interim government to put things in order.

Economists attribute the rise in non-food inflation mainly to price increases in the clothing and housing categories.

“All other components of non-food inflation have declined. It seems the exchange-rate depreciation in December, which persisted into January, may have been a key factor,” says Dr Zahid Hussain, former lead economist at the World Bank Dhaka office.

The drop in food inflation is largely due to improved supply conditions in winter, with many vegetables selling cheaper than cost price on abundant supply.

“The decline appears smaller than expected based on historical seasonal patterns,” the economist recalls. He emphasises that the message for monetary policy is clear: “Maintain the tight stance.”

The Bangladesh Bank is set to unveil its half-yearly monetary policy on February 10 for the rest of the financial year.

However, he admits that the decline in inflation would be a “huge relief” for households, especially those with limited incomes, for example, clothing workers.

He feels the stubbornness of food inflation needs grinding down immediately.

Dr Masrur Reaz, chairman and CEO of Policy Exchange Bangladesh, says the inflation decline as good news but cautions that food inflation remains high and continues to affect low-income people.

He suggests the central bank “should maintain its tight monetary stance as global prices for key commodities, including rice, remained elevated in December compared to November”.    https://today.thefinancialexpress.com.bd

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FeaturedFinanceIndustry News

Tk101cr loss in H1: What pushes Bashundhara Paper into the red?

by fstcap
written by fstcap

According to its reports, in the first half of the current fiscal year (July to December), its production costs increased by around 8% due to rising gas and electricity prices, while finance costs for loans surged by 108% to Tk155.92 crore

Bashundhara Paper Mills, one of the major players in the paper industry and the leader in the tissue market, has suffered a significant setback in the first half of the current fiscal year, slipping into the red with a Tk101 crore loss.

Once a consistently profitable paper and tissue products maker of Bashundhara Group, the paper mills has now found itself in hot water due to rising costs in utilities, procuring raw materials, and financial expenses from higher interest rates, all of which have contributed to lower sales.

According to its reports, in the first half of the current fiscal year (July to December), its production costs increased by around 8% due to rising gas and electricity prices, while finance costs for loans surged by 108% to Tk155.92 crore.

It owed Tk1,796.79 crore in long-term loans to several banks.

Meanwhile, its revenue fell by 40% in H1 compared to the same period of the previous fiscal year.

In the first half of FY25, its revenue declined to Tk410.47 crore, and it incurred a loss of Tk101.48 crore.

 

In the entire fiscal year of FY24, the paper firm made Tk1,315 crore as revenue and posted a profit of Tk19.15 crore.

In its unaudited report for the half-year, the paper firm explained, “We have been severely affected by external economic variables like the increase in the exchange rate of the foreign currency, the price hike of raw materials, import restrictions, reluctance to open letters of credit (LC) by the bank, the increase in bank interest rates from 9% to 14.50%, and the availability of the US dollar.”

 

“Due to unavoidable political and economic circumstances, we were not able to open LCs for raw materials, which led to a huge loss in business,” it said.

 

“Negative developments in trade policy or global trade—including sanctions, import duties, and other trade restrictions between countries—could directly or indirectly affect sourcing inventory products and the company’s profitability,” it added.

It also said, “Significant or unforeseen fluctuations in the prices of other important production inputs such as energy and chemicals, and problems related to their availability, could erode profitability and threaten business continuity.”

 

“An unprecedented government-ordered nationwide internet and mobile connectivity blackout blocked social media, blocked raids, and several days of general holidays, shut down and closed educational institutions, which led to the economy as well as the business coming to a sudden stop,” it said.

“As a result, revenue has decreased by 40.11% for the year 2024-2025 from the same year of 2023-2024,” it added.

“While due to the economic and political variability, sales decreased by Tk274.95 crore during the July to December quarter of the year 2024-2025 from the same period of fiscal 2023-2024,” it concluded.    https://www.tbsnews.net

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FinanceNational

Shares of Beximco Pharma, Shinepukur fall after govt announces sale

by fstcap
written by fstcap

Beximco Pharma posts 28% profit growth in Q2

Shares of Beximco Pharmaceuticals and Shinepukur Ceramics, two concerns of the troubled Beximco Group, declined in early trade today after the interim government decided to sell shares of the profitable concerns to pay salaries of employees of 13 laid-off companies owned by the conglomerate.

The government yesterday said the Bangladesh Securities and Exchange Commission and the Financial Institutions Division would take steps to sell the shares to clear up to Tk 550 crore in dues for the employees of the shuttered factories.

Officials of the two organisations and several banks are scheduled to meet on February 2 to discuss the sale of Beximco Pharma and Shinepukur Ceramics shares.

Shinepukur Ceramics lost 5 percent to Tk 11.40 as of 10:48 am on the Dhaka Stock Exchange (DSE).

Beximco Pharma, one of the leading drug makers in Bangladesh, fell 1.44 percent to Tk 75.5 as of 11:06 am on the DSE, despite posting a 28 percent year-on-year increase in profit in the October-December quarter of 2024.

The company reported a profit of Tk 184.31 crore in the second quarter, up from Tk 144.07 crore a year ago, according to its financial statement published today.

Earnings per share rose to Tk 4.1 during the October-December quarter from Tk 3.21 in the same period of 2023.

Shares of Beximco, however, remained unchanged at Tk 110.10 as of 10:56 am on the DSE.

The company reported a loss per share of Tk 2.58 in October-December of FY25, compared to a profit of Tk 0.82 per share in the same period a year ago.

In a disclosure to the DSE, Beximco said its production was nearly halted during the period due to a lack of banking facilities.

“No banks opened any letters of credit since August 2024. Moreover, stocks of fabrics and yarns, which could not be used, had to be sold below cost price as garment factories were also shut down,” the company said.

“This resulted in the company posting a negative EPS compared to the corresponding period last year,” it added.    https://www.thedailystar.net

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FinanceIndustry NewsStock Market

Marico’s profit soars 27pc on higher revenue, finance income

by fstcap
written by fstcap

Multinational company Marico Bangladesh registered a 27 per cent year-on-year growth in profit in the third quarter through December last year, driven by increased revenue and finance income.

The company’s income grew almost at the same pace in the nine months through December last year, compared to the same period the year before.

“The company’s top line growth — revenue growth — was significantly high, compared to many local companies,” said Md. Moniruzzaman, managing director of Prime Bank Securities.

Marico witnessed a 20 per cent year-in-year growth in revenue to Tk 4.04 billion in Q3. The growth is significant for a listed company against the backdrop of the sluggish economy; many local companies are struggling to survive.

Meanwhile, Marico declared 440 per cent interim cash dividends, based on the audited financial statements for the nine-month period ended in December last year. Shareholders will get Tk 44 per share against the face value of Tk 10 per share.

Marico saw its finance income jump 23 per cent year-on-year during the third quarter through December, supporting its bottom line growth.

Moniruzzaman said the company’s cash funds might have been injected into fixed-income securities, such as Treasury bonds that ensured good returns during the quarter.

Marico’s other income was also up 39 per cent year-on-year in Q3 to December last year.

EPS (earnings per share) rose to Tk 44.34 in Oct-Dec, increased from Tk 34.93 in the same period of the previous year.

Marico reported a 27.51 per cent growth in profit year-on-year to Tk 4.58 billion in the nine months to December last year.

During the period, revenue grew 12 per cent, while finance income and other income experienced a growth of 66 per cent and 7.59 per cent respectively.

A decline has been observed in the operating cash flow reported for the nine months to December 2024, which was due to higher payment to suppliers compared to the previous year.

Marico reported NOCFPS (net operating cash flow per share) of Tk 88.35 for April-December, 2024, down from Tk 143.15 reported for the same period a year earlier.

It reported NAVPS (net asset value per share) of Tk 241.29 as of December last year whereas the value was Tk 228.07 at the end of 2023.

Marico has persistently been on a growth trajectory even after the outbreak of Covid 19 in 2020. It reported a profit of Tk 2.64 billion in 2020. It grew exponentially for five years to gain a profit of Tk 4.60 billion in 2024.    today.thefinancialexpress.com.

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BankingFeaturedFinance

Non-residents can now invest up to Tk1m without Bangladesh Bank approval

by fstcap
written by fstcap

Non-residents will no longer have to secure the Bangladesh Bank’s approval to invest up to Tk1 million ($8,201) in any public or private institutions within the country, except for the capital market listed ones.

The Bangladesh Bank, in a circular issued today, instructed all authorised dealer banks to comply with it.

Officials at the central bank say the exemption is to facilitate small foreign investments. However, investments above Tk10 lakh must secure approval from the Bangladesh Bank.

However, in the case of an investment below Tk1 million by a foreign investor in a Bangladeshi company in exchange for shares, the assistant directors (ADs) of the Bangladesh Bank will check the necessary documents.

Although the central bank’s approval is not mandatory in this regard, the relevant bank will keep a copy of the client’s (investor) application, and send it to the central bank and the client in a prescribed format, says the circular.

Shares can be issued against foreign exchange brought in from abroad only through the banking channel before the issuance.

ADs will ensure from relevant documents that the purpose of the foreign exchange, or remittance, is an equity investment, under which banks and clients will preserve encashment certificates, the circular adds.

In addition, the resident’s status of the shareholders and source country of funds shall be ensured from relevant documents. “If shares are issued against imported capital machinery, the bank shall forward the application to the Bangladesh Bank.”

This move by Bangladesh Bank to streamline foreign direct investment (FDI) approvals for smaller investments comes at a crucial time, as the country’s net FDI inflow during the first quarter of fiscal 2024-25 plummeted to an 11-year low of $104 million.

The decline was attributed to factors such as political instability and economic uncertainty centring the student-led mass upsurge and subsequent fall of the Sheikh Hasina-led government during the period.

Data from the central bank say the net FDI inflow in the same quarter of FY24 was $361 million, meaning it decreased by 71% compared to the previous fiscal year.    https://www.tbsnews.net

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BankingFinanceNational

Govt’s borrowing from banks rises to Tk 16,000cr so far this fiscal year

by fstcap
written by fstcap

The government’s net bank borrowing has risen sharply due to lacklustre tax collection, slow private sector credit growth and the overall economic slowdown since the political changeover in August last year.

Net bank borrowing is calculated based on the amount that the government has taken from banks subtracted by that repaid to Bangladesh Bank.

Until January 22 of FY25, net bank borrowing by the government stood at Tk 15,759 crore, up from a balance of negative Tk 778.30 crore during the same period of the previous fiscal year, as per the latest data from the Bangladesh Bank.

However, the government’s borrowing from commercial banks rose at a slow pace when compared to the target for FY25, which was set at Tk 137,500 crore.

Central bank data illustrated that the government borrowed heavily from commercial banks, taking out around Tk 74,420 crore until January 22.

In the same period, it repaid a little over Tk 58,661 crore to the central bank.

The government generally borrows from the banking system through treasury bills and bonds.

Yet, until FY24, the government borrowed directly from the central bank. However, that facility was suspended by the central bank after economists and insiders criticised the move, saying it was fuelling inflation.

Seeking anonymity, a senior central bank official told The Daily Star that the government had no option but to borrow heavily from commercial banks as the central bank had suspended lending.

He added that the private sector is not interested in taking loans now due to high interest rates and political uncertainty.

This is demonstrated by a slowdown in private sector credit growth, which decelerated to 7.66 percent in November last year, the lowest since May 2021, when it was 7.55 percent, BB data showed.

As a result of the private sector’s reluctance to borrow, banks have more funds on hand and are very interested to invest in government treasury bills and bonds.

The government has a huge demand for money, which is urgently required, said Fahmida Khatun, executive director at the Centre for Policy Dialogue.

Most public projects are stagnating now, so global donor agencies are not releasing funds, she said, adding that the government’s revenue collection had not reached the expected levels due to the disruption of business activities centring the ‘July uprising’, when a mass uprising overthrew the Awami League government.

However, the economist added that the private sector would not be affected by heightened government bank borrowing since there is little demand for loans among private enterprises at the moment.

A chief executive of a private commercial bank said the government has been unable to collect as much revenue as it had targeted while the inflow of foreign funds has also slowed, compelling it to borrow from the banking sector.

Ashikur Rahman, a senior economist at the Policy Research Institute of Bangladesh, said net borrowing from the banking sector increased due to dismal revenue mobilisation since FY24.

Even worse, during the July-December period of FY25, the National Board of Revenue collected Tk 156,442 crore, which reflected a 0.98 percent year-on-year decline.

This has only served to increase the government’s dependence on saving certificates and the banking sector as it looks for sources of funds.    https://www.thedailystar.net

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