February in Review - The Capital Market

February in Review – The Capital Market

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A capital market is a place that has one thing constant and that is change. Throughout the year we can see that the whole economy has its ups and downs. This is affecting the capital market. Some people are actually winning because of their calculated decisions while others are losing money. To succeed in this market you have to have proper knowledge about the market and good forecasting abilities. But you need data for that. Data can help you forecast the market and help you make the best decisions. That is why in this article we are putting all the updates for February.

New Initial Public Offering (IPO)

Desh General Insurance 

Desh General Insurance Company Limited is one of Bangladesh’s leading insurance firms. It was found on February 8, 2000. It began operations in 1996 with a paid-up capital of BDT 60 million. The credit rating of A+ had resulted in the accumulation of BDT 240 million by Desh General Insurance Company Ltd. The Desh General Insurance  IPO application started on February 14, 2021, and continued up to February 18, 2021.

They had just priced the IPO at 10 takas per share, with a total offering of 500 shares per lot. The subscription date began on February 14th until February 18th, 2021. The business aims to spend 20% of the IPO capital in the capital market, 74.02% in the FDR & Treasury Bonds, and 5.98% in the IPO floatation cost. The company’s RIL Investment rating is 3.2 out of 5, putting them in the investable group.

Index Agro Industries Limited IPO

Index Agro Industries Limited (IAIL) began operating in the year 2000. They usually supply Broiler and layer feed for poultry, and fish, and Day-Old Chicks. A fully integrated poultry feed manufacturing facility. They started with a capital of 82 million BDT. Following their IPO, the Pre-IPO Paid-up Capital was 390 million BDT, while their post-IPO Paid-up Capital was 472 million BDT. They have an approved capital of 1 billion BDT. 100 lots at 10,000 shares each are being offered for sale with an initial selling price of 50,000. They were released on February 22nd, 2021. The last day to apply was February 28th. They have an A credit rating. The Index-Agro had an average RIL Investment rating of 2.8 out of 5. We know that 3 out of 5 is the investable category for an IPO. In this case, the business had only slightly affected that amount.

Gainers:

Here are the top 5 Gainers Considering Close Price & YCP till march.

  1. The Peninsula Chittagong Limited (PENINSULA)
  2. LankaBangla Finance Ltd (LANKABAFIN)
  3. eGeneration Limited (EGEN)
  4. Anwar Galvanizing Ltd (ANWARGALV)
  5. Zahintex Industries Limited (ZAHINTEX)

Market updates

  • Floor price adjustment:

    The Security Exchange Commission (SEC) had decided that the right share/dividend had to be adjusted. For that, they took steps to adjust it a bit. They reduced the floor price proportionately. 

  • Institutional Investment is not up to the mark:

    The banks were expected to spend a significant sum, but this did not happen. The bank’s liquidity, which totaled Rs. 2 lakh 4 thousand crores. That money was never put to use. As a result, Bangladesh bank policy intervened, ensuring a large amount of liquidity as well as a 60 crore taka stimulus package. Remittances are also on the rise. Private credit grew at a rate of 17-18%. However, the target was lowered to 11.5 percent. The banking channel had the money to invest in the industry since the new rate of credit is about 8%. Previously, public credit grew at a rate of 44 percent or more, but now it grows at a rate of about 31 percent. The investment did not go as planned.  Because of that, the bank’s maintained their liquidity. This cash had to be put to good use.

  • Trade volume declined:

    SEC and ICB took some dynamic decisions that reflected an immediate positive response. However gradually the response faded and the trade volume gradually declined. Institutional buyers need to come forward and contribute more investment in the capital market. It will have a significant positive impact on the capital market. 

Updates from Royal Capital Ltd

Royal Capital Limited regularly organizes training and workshops for our clients and staffs.  Royal Capital also had their very own training program throughout February. Due to COVID-19, we took their program on Zoom till 24th February. We provided training courses on:

  • Certificate course on Fundamental Analysis

In this course, we discussed personal finance and the investment goals, savings and investment, different asset classes, the power of compounding, long-term investment, fundamental analysis, a top-down approach, and portfolio construction. We aimed to train them so that they can develop knowledge and the skills required for equity research.

  • Certificate course on Technical Analysis

This course taught how to create a better understanding of the steps of technical analysis, candlestick patterns, support and resistance levels, trends, how to analyze stocks, and how to draw technical charts.

  • Certificate course on Stock Market Trading

Training’s most significant aim is to learn how behavioral factors influence investment decisions. This course helped to create a better understanding of Royal Capital Services, rules and regulations of the capital market, practical use of the Dhaka Stock Exchange (DSE) app/investor platform. It will also help you to understand the securities laws and regulations regarding the capital market which will additionally help you to understand how the DSE trading engine works.

Conclusion

Throughout the whole month of February, we had multiple IPOs launching. New steps are in talks and might take time to show their real influence in the market. It is a matter of time that happens. Nevertheless, we should stay optimistic. We should hope that in the next couple of months the market will regain its stability back. The IPO market always had its fair share of interest in the market. Royal Capital also had its fair share of progress. In conclusion, we can say February had its ups and downs and we can be optimistic about the months to come. If you are interested open an online B0 account click here and if you want to check out our other articles on our website.

 

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