Capital Market Scenario: October 2012 till April 18, 2013

Secondary Market Scenario

Secondary market continued declining trend that was

started during December 2010. DGEN started the

period with a value of 4,589.34 and lost 881.85 points

to close at 3,707.49. The deviation between highest

and lowest point of DGEN during the period is 1,096

which dictates the significant volatility during the

period. Investor’s Participation in the secondary

market remained low despite all the efforts. The

average daily turnover during the period is only

2,814.21 million.

Being a news driven market turnover did rise during

some periods mainly due to some market related

news. During the period, market saw an uptrend at the

end of January primarily because of investor’s

optimism regarding corporate declarations. As

investors went in a buying mode, turnover and index

stated to climb. But as investors started profit taking,

the market started falling at the mid of February. At

April 01, 2013 DGEN stood at 3,610.43 which have

risen to 3,707.49 on April 18, 2013.

DSE scenario at a glance during October 01, 2012 to April 18, 2013

Total Trading Days 131

Daily Average Turnover (BDT mn) 2,814.21

Highest Turnover During The Period (October 03, 2012) 10,448.33

Lowest Turnover During The Period (January 21, 2013) 1,015.72

Beginning Value of DGEN 4,589.34

Ending Value of DGEN 3,707.49

Highest Value of DGEN (October 02, 2013) 4,706.43

Lowest Value of DGEN (April 01, 2013) 3,610.43

Primary Market Scenario

During the period, the prices of two approved IPO’s were revised downward due to current market situation. The

Commission approved revising the market price of Summit Purbanchal Power Company Limited to BDT 40 from

BDT 45 and Argon Denims Limited to BDT 35 from BDT 44. The commission also postponed the IPO application

of Apollo Ispat Limited. During the Period BSEC approved IPO application of five companies (typed bold in the

table below). Primary market activity during the period is as follows-

Primary Market Activity during October 2012 to April 18,2013

Name of Company No. of shares Price per share IPO size

A. Companies that raised capital through IPO and got listed

1 Envoy Textiles Limited 30,000,000 30 900,000,000

2 Sunlife Insurance Company Limited 12,000,000 10 120,000,000

3 Summit Purbanchol Power Co. Limited 30,000,000 40 1,200,000,000

4 Argon Denims Limited 30,000,000 35 1,050,000,000

5 Premier Cement Mills Limited 12,000,000 22 264,000,000

6 Golden Harvest Agro Industries Limited 30,000,000 25 750,000,000

7 Global Heavy Chemicals Limited 12,000,000 20 240,000,000

8 Orion Pharma Limited 40,000,000 60 2,400,000,000

Subtotal

6,924,000,000

B. Companies that raised capital through IPO and waiting for listing

1 Bengal Windsor Thermoplastic Limited 16,000,000 25 400,000,000

Subtotal

400,000,000

C. Companies waiting for raising capital through IPO

1 Family Tex (BD) Limited 34,000,000 10 340,000,000

2 Central Pharmaceutical Limited 1400000 10 14,000,000

Subtotal

354,000,000

Total

7,678,000,000

The sluggish condition of secondary capital market

also affected the primary capital market. As DGEN

declined, valuation in the primary market also declined

due to lower P/E ratio. During the period BSEC

followed valuation methods based on weighted

average earnings per share and net asset value per

share. For determining valuation based on weighted

average EPS, last 3 months average of market P/E or

sector P/E quoted in Dhaka Stock Exchange,

whichever is lower has been considered. After

determining the valuation based on these methods,

the final price of the shares were fixed based on

qualitative justification of BSEC. But recently BSEC is

considering the average of NAV and weighted

average earnings based value as the justified price for

IPO.

Please note that there is no written rule in this matter.

BSEC approves the valuation purely based on

conservative approach and based on the market

scenario.