portfolio investment report

7/24/2019 Portfolio Investment Report

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1. IntroductionRule No.1: Never lose money, Rule No.2: Never forget rule No.1. -Warren

Buett

The famous quote of nvestment !uru Warren Buett remn"s us that, money

shoul" #e nveste" through $ro$er analyss an" %u"gment. &n 'nan(al terms,

&nvestment s $uttng money nto somethng )th the e*$e(taton of gan, usually

over a longer term. +erent ty$es of asset (lasses su(h as sto(, #on", money

maret nstruments et(. are avala#le n the 'nan(al maret nvestng through

)h(h an nvestor (an ho$e to gan hs e*$e(te" return. Whle nvestng n these

asset (lasses an nvestors $rme nterest s n $ro"u(ng $ostve nvestment

returns )hle havng a lo) $ro#a#lty of n(urrng losses n a reasona#le tme

frame. The (on(e$t of $ortfolo analyss s nvolve" n "elverng o$tmum asset

(om#natons. !enerally, ortfolo analyss s a stu"y of the $erforman(e of

s$e('( $ortfolos un"er "erent (r(umstan(es )h(h n(lu"es the eorts ma"e

to a(heve the #est tra"e-o #et)een rs toleran(e an" returns. ortfolo

analyss nvolves quantfyng the o$eratonal an" 'nan(al m$a(t of the $ortfolo.

&t s vtal to evaluate the $erforman(es of nvestments an" tmng the returns

ee(tvely. The analyss of a $ortfolo e*ten"s to all (lasses of nvestments su(h

as #on"s, equtes, n"e*es, (ommo"tes, fun"s, o$tons an" se(urtes. ortfolo

analyss gans m$ortan(e #e(ause ea(h asset (lass has $e(ular rs fa(tors an"

returns asso(ate" )th t. /en(e, the (om$oston of a $ortfolo ae(ts the rate

of return of the overall nvestment.

&n ths re$ort )e )ll mae a $ortfolo of "eren(e assets (lass that )ll gve us a

goo" return )th mnmum rs, at the same tme $rov"e (ash for our "ay to "ay

nee"s.

1.1. Objectives:2. +evelo$ng nvestment $ol(y statement0. *amnng 'nan(al an" (onom( on"ton3. &m$lementng the nvestment $lan4. 5ore(ast the $erforman(e

1.2. Scope: 6ur $ortfolo )ll (onsst of B+T 2777777.

6ur tme frame for ths $ortfolo s 4 8ears

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We only (ons"er the nvestment avala#le n Bangla"esh. We (annot

nvest n nternatonal #on"s, 'nan(al for)ar", 'nan(al future

2. Policy StatementWe )ant to (reate an nvestment fun" that )ll gve us a healthy return for ne*t

4 years. The$ur$ose of ths &nvestment ol(y 9tatement s to esta#lsh

gu"elnes for our nvestment $ortfolo. The statement also n(or$orates

a((ounta#lty stan"ar"s that )ll #e use" for montorng the $rogress of the

ortfolos nvestment $rogram an" for evaluatng the status of nvestment.

2.1. Investment objective and spending policy

The 5un" s to #e nveste" )th the o#%e(tve of $reservng the long-term,

real $ur(hasng $o)er of assets )hle $rov"ng a relatvely $re"(ta#le

an" gro)ng stream of annual "str#utons n su$$ort of the &nsttuton.

5or the $ur$ose of mang "str#utons, the 5un" shall mae use of a total-

return-#ase" s$en"ng $ol(y, meanng that t )ll fun" "str#utons from

net nvestment n(ome, net reale" (a$tal gans, an" $ro(ee"s from the

sale of nvestments.

The "str#uton of 5un" assets )ll #e $ermtte" to the e*tent that su(h

"str#utons "o not e*(ee"a level that )oul" ero"e the 5un"s real assets

over tme. We )ll see to re"u(e thevara#lty of annual 5un"

"str#utons #y fa(torng $ast s$en"ng an" ortfolo asset values nto ts

(urrent s$en"ng "e(sons.

ero"( (ash ;o), ether nto or out of the ortfolo, )ll #e use" to #etter

algn the nvestment $ortfolo to the target asset allo(aton.

2.2. Portfolio investment policies

Asset allocation policy

We no) that the strateg( allo(aton of ortfolo assets a(ross #roa"ly "e'ne"

'nan(al asset an" su# asset (ategores )th varyng "egrees of rs, return, an"

return (orrelaton )ll #e the most sgn'(ant "etermnant of long-term

nvestment returns an" ortfolo asset value sta#lty.

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Wee*$e(ts that a(tual returns an" return volatlty may vary from e*$e(tatons

an" return o#%e(tves a(ross short $ero"s of tme. Whle )e )sh to retan

;e*#lty )th res$e(t to mang $ero"( (hanges to the ortfolos asset

allo(aton, )e e*$e(t to "o so only n the event of materal (hanges to the 5un",

to the assum$tons un"erlyng 5un" s$en"ng $ol(es, an"


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allo(aton. Whle not s$e('(ally (ons"ere" )thn ths $ol(y, alternatve

nvestments may (om$rse no more than 14= of total ortfolo assets an", to the

e*tent they are o)ne", )ll $ro$ortonately re"u(e target allo(atons to the three

$rmary asset (lasses teme" a#ove

Diversication policy

+vers'(aton a(ross an" )thn asset (lasses s the $rmary means #y )h(h )e

e*$e(t the ortfolo to avo" un"ue rs of large losses over long tme $ero"s. To

$rote(t the ortfolo aganst unfavora#le out(omes )thn an asset (lass "ue to

the assum$ton of large rss, )e )ll tae reasona#le $re(autons to avo"

e*(essve nvestment (on(entratons. 9$e('(ally, the follo)ng gu"elnes )ll #e

n $la(e:

aA We )ent through ntensve resear(h n all avala#le sto(s n +9 an" tre"to 'n" the most $ro'ta#le se(tor. We foun" that (ement n"ustry has a

goo" $otental. To "versfy our rs, )e )ll try to nvest n all (ement

(om$anes sto( avala#le n the maret.#A To get a m* to rs an" return, )e )ll nvest 7= n rsy assets an" 37=

n less rsy assets.(A We )ll mae a m* of '*e" n(ome @nvestment n gol", sto(, mutual

fun"A an" (urrent n(ome @Cuto R(sha) rent, 5+R, Bon"A

!ebalancing

&t s e*$e(te" that the ortfolos a(tual asset allo(aton )ll vary from ts targetasset allo(aton as a result of the varyng $ero"( returns earne" on ts

nvestments n "erent asset an" su#asset (lasses. The ortfolo )ll #e

re#alan(e" to ts target normal asset allo(aton un"er the follo)ng $ro(e"ures:

1. We )ll use n(omng (ash ;o) @(ontr#utonsA or outgong money movements

@"s#ursementsA of the ortfolo to realgn the (urrent )eghtngs (loser to the

target )eghtngs for the ortfolo

2. We )ll regularly reve) the $ortfolo, an" a$$ly the follo)ng $arameters

aA &f any asset (lass @equty or '*e" n(omeA )thn the ortfolo s D


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0. We (annot nvest "re(tly n treasury #on", or non-res"ental #on"s3. Cs )e nee" (urrent n(ome )e (annot heavly nvest n long term assets4. We (annot nvest n "ervatves, 'nan(al for)ar" or 'nan(al futures

". $%amining nancial and $conomic #onditionThe e(onomy of Bangla"esh has su((essfully ta(le" the (ontagon ee(t of

glo#al e(onom( (rss an" manage" tomantan a sustane" gro)th. C((or"ng to

a $rovsonal estmate, the e(onomy has $oste" a gro)th of .F1$er(entn

582717-11 an" n 582711-12 the estmate" gro)th s .02 $er(ent. Ths

$erforman(e s manly attr#uta#le to the sustane" gro)th n agr(ulture se(tor

(ou$le" )th re(overy of gro)th n n"ustry se(tor an" the satsfa(tory

$erforman(e of serv(e se(tor.

&lobal $conomic Scenario

The )orl" has (ome out of the re(esson of 277F-277G stronger than ant($ate".

/o)ever, the re(overy smare" #y "erent s$ee"s n "erent regons of the

)orl". The (onsol"aton of the glo#al re(overy(ontnues n t)o $hases. &n

a"van(e" e(onomes, the re(overy has #een less than e*$e(te" (ou$le"

)thhuge 's(al m#alan(es, mountng $u#l( "e#t an" n(rease" unem$loyment.

&n a""ton, the soveregn"e#t (rss n the $er$hery of euro area has (reate"

"o)ns"e rss n the $ro(ess of re(overy. Whle theemergng an" "evelo$nge(onomes have re(ou$e" from the slo)"o)n "urng glo#al "o)nturn, there

has#een n;atonary $ressure n these e(onomes, an" there )ere some sgns of

overheatng "rven n $art #ystrong (a$tal n;o)s. Cganst ths #a("ro$, the

Worl" (onom( 6utloo, 6(to#er 2711, sho)e" a"o)n)ar" revson of glo#al

out$ut n 2711 an" 2712 aroun" half a $er(entage $ont to 3 $er(ent fromC$rl

2711 6utloo.

The re(ent surges n glo#al ol an" foo" $r(es )ere a""ng further n;atonary

$ressures. &n;aton n a"van(e" e(onomes )as 1. $er(ent n 2717, )h(h )as

4


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e*$e(te" to $( u$ to 2. $er(ent n 2711. 6n the other han", n;aton n

emergng an" "evelo$ng e(onomes )as .17 $er(ent n 2717, )h(h )as

e*$e(te" to $( u$ to F.4 $er(ent n 2711 "ue to "omest( "eman" an" n"u(e"

foregn (a$tal n;o)s alongs"e the $r(e-he of (ommo"tes le ol an" foo".

'(e &lobal $conomic !ecession and )anglades(

The m$a(t of the glo#al 'nan(al (rss on Bangla"esh e(onomy )as not

o#serve" at the #egnnng of the(rss. /o)ever, some )eaenng n e*$ort an"

m$ort )as o#serve" n the thr" quarter of 58277H-7G,)h(h (ontnue" through

the se(on" quarter of 58277G-17. +urng these t)o 's(al years, e*$orts gre)#y

17.01 $er(ent an" 3.11 $er(ent res$e(tvely, )hle m$orts gre) #y 3.7 $er(ent

an" 4.40 $er(ent res$e(tvely. &n the (onte*t of negatve gro)th n )orl" tra"e,

these gro)th rates )ere satsfa(tory. Wththe re#oun" n glo#al tra"e,

Bangla"eshs tra"e se(tor s gro)ng sgn'(antly. The e*$orts an"

m$ortsregstere" a gro)th over 37 $er(ent n the last 's(al year. The

!overnment $rov"e" t)o n(entve $a(ages that n(lu"e" $ol(y su$$ort an"

(ash n(entves for e*$ort se(tor )h(h hel$e" qu( turnaroun" from the

re(essonary sho(s. The slo)"o)n n the gro)th of remttan(e re;e(te" the

m$a(tof glo#al re(esson, $art(ularly on the real estate marets n the >""le

ast, an" on n"ustral la#our "eman" n some 9outh ast Csan e(onomes su(h

as >alaysa. /o)ever, remttan(e $erforman(e )as atsatsfa(tory level

regsterng a gro)th rate of 22.32 $er(ent n 58277H-7G an" 10.37 $er(ent n

58277G-17. Ths gro)th further "e(elerate" n 582717-11 to .70 $er(ent. &t s

ho)ever to #e note" that #oth remttan(e an" overseas %o# re$la(ement

re#oun"e" sn(e Ianuary 2711.

$conomic &ro*t(

The e(onomy ha" e*$eren(e" mo"est fall of !+ gro)th "urng the

re(essonary $ero". +es$te(ontnuous gro)th n agr(ulture se(tor, the sluggsh

gro)th n n"ustry se(tor $art(ularly n themanufa(turng se(tor (om$are" to

$re-re(esson $ero" )as res$ons#le for slo)er !+ gro)th. /o)ever, n the

)ae of glo#al re(overy the e(onomy re#oun"e" an" has $oste" a gro)th of

. n582717-11 as (om$are" to .7F $er(ent an" 4.F3 $er(ent gro)th n

58277G-17 an" 58277H-7G res$e(tvely. Ths $erforman(e s manly attr#uta#le

to the sustane" gro)th n agr(ulture se(tor (ou$le")th re(overy of gro)th n

n"ustry se(tor an" the satsfa(tory $erforman(e of serv(e se(tor.

Cgr(ulturere(or"e" sustane" gro)th for the last three (onse(utve 's(al years


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res$on"ng to favoura#le )eather (on"tons, (ontnue" government su$$ort for

agr(ulture n$uts an" greater a((ess to (re"t. &n"ustry se(tor re#oun"e" from

the sluggsh gro)th "urng re(esson an" re(or"e" a ro#ust gro)th of H.1

$er(ent,u$ from .3G $er(ent of $revous year. >assve ntatves taen #y the

government n the overall nfrastru(ture se(tors n(lu"ng the $o)er hel$e" to

m$rove n"ustral $ro"u(ton. 9erv(e se(tor hasmantane" satsfa(tory gro)th

$ath an" re(or"e" .0 $er(ent gro)th, slghtly hgher than the gro)th

of$revous year @.3F $er(entA. &n 582717-11, $er (a$ta !N& an" $er (a$ta !+

stoo" at J9K H1H an"J9K F44 res$e(tvely, u$ from J9K F41 an" J9K HF

res$e(tvely a year earler.

Savings and Investment

C((or"ng to a $rovsonal estmate, "omest( savngs "e(elerate" from 27.17

$er(ent of !+ n 58277G-17 to 1G.4G $er(ent of !+ n 582717-11 manly for

n(reasng (onsum$ton e*$en"ture. Whle "ue toslo)er gro)th n remttan(e

n;o), natonal savngs "e(elerate" from 07.72 $er(ent of !+ n 58277G-17 to

2H.37 $er(ent of !+ n 582717-11. >oreover, "ue to hgher nvestment n

Cnnual +evelo$mentrogramme, nvestment-!+ rato stoo" at 23.F0 $er(ent of

!+ n 582717-11, u$ from 23.31 $er(entof !+ a year earler.

In+ation

Wth the re(overy of glo#al e(onomy, "omest( "eman" s on the n(rease n

many (ountres. Ths hasresulte" n une*$e(te" u$)ar" $ressures on #oth foo"

an" non-foo" n;aton. >oreover, there )ere$ro"u(ton short-falls n many foo"

$ro"u(ng (ountres "ue to n(lement )eather (on"ton. Ra$"e(onom( gro)th

also $ushe" u$ the glo#al "eman" for foo". 9ome of the (ountres $ut #an on

foo"e*$ort to ensure nternal foo" se(urty. The &>5 6verall ommo"ty r(en"e* n(rease" #y 02 $er(ent

n Iune 2711 (om$are" to Ianuary 2717. 6l $r(e ha" gone u$ an" remane"

volatle #y the ongong(rss n the North Cfr(a an" >""le ast. Cs a result (ru"e

ol $r(es n(rease" from J9K G4 $er #arreln Ianuary 2711 to J9K127 n C$rl

2711. /o)ever, the $r(es fell n >ay 2711 an" then sta#lse" ataroun" J9K117.

Cs a (onsequen(e, n;aton )as on an u$)ar" tra%e(tory "urng 582717-11. The

year-on-year n;atonrea(he" 17.1F $er(ent n Iune 2711 from H.F7 $er(ent n

F


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Iune 2717. The average n;aton rate, therefore,rose to H.H7 $er(ent n 582717-

11 (om$are" to F.01 $er(ent n the $revous year.

,oney and #redit

The #roa" money n(rease" #y 21.03 $er(ent "urng 582717-11, )h(h )as

slghtly lo)er than 22.33$er(ent gro)th a year earler. +urng ths $ero", year-

on-year gro)th of (urren(y notes an" (ons )ththe $u#l( n(rease" #y 1H.F1

$er(ent (om$are" to the n(rease of 2H.73 $er(ent a year earler. Whle"eman"

"e$ost n(rease" #y 14.3H $er(ent from 0F.F7 $er(ent an" the tme "e$ost

re(or"e" an n(rease#y 22.H $er(ent from 1G.44 $er(ent a year earler.

8ear-on-year gro)th n "omest( (re"t )as 2F.37 $er(ent "urng 582717-11, u$

from 1F.G7 $er(ent"urng 58277G-17. 9e(tor-)se analyss of "omest( (re"t

n"(ates that the net (re"t to the governmentse(tor n(rease" #y 03.HG $er(ent

at the en" of Iune 2711 "ue to lo)er than estmate" 'nan(ng frome*ternal an"

non-#an sour(es. The net (re"t to the government se(tor )as "e(lne" #y .42

$er(ent"urng the $revous year. rvate se(tor (re"t gro)th )as 24.H3 $er(ent

n 582717-11, slghtly hgherthan year-on-year gro)th of 23.23 $er(ent of

$revous 's(al year. rvate se(tor (re"t n(rease" manly"ue to $rov"ng hgher

su#s"yoney mult$ler n(rease" slghtly to 3.42 at the en" of

Iune 2711 from 3.41 at the en"of Iune 2717. Ths out(ome )as manly #e(ause

H


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of n(rease" reserve-"e$ost rato to 7.111 from 7.17H n58277G-17. urren(y-

"e$ost rato, on the other han", "e(lne" to 7.132 from 7.13 n 58277G-17.

Interest !ate

The )eghte" average rate of nterest on (ommer(al len"ng n(rease" to 13.4$er(ent n Ianuary 2712.The nterest rate s$rea" narro)e" to 3.2H n Ianuary

2712 from 3.43 $er(ent n Iune 2711.

#apital ,ar-ets

The (a$tal marets #e(ame volatle from the se(on" half of 582717-11. +urng

the $ero", the +9 general n"e* n(rease" #y GH.30 $er(ent from 0,717.2 to

,140.H n"(atng een nterests sho)e" #ythe nvestors n the (a$tal maret.

By the en" of Iune 2717, the num#er of B6 @Bene'(ary 6)nerA a((ounts hasn(rease" to 24.3 lah from 13.14 lah at the en" of Iune 277G. Ct the

#egnnng of 582717-11, the (a$tal maret sho)e" #uoyant. The +9 general

n"e* stoo" at H,2G7.31 n +e(em#er2717, u$ #y 03.F2 $er(ent (om$are" to that

of Iune 2717. 9mlarly, maret (a$talaton stoo" at 33.1$er(ent of !+ at that

tme. /o)ever, the overheate" (a$tal marets (olla$se" n Ianuary 2711 an"

)eren $ro(ess of re(overy an" sta#lsaton "urng the last quarter of 582717-11.

>aret (a$talaton an"general n"e* of +9 stoo" at 0.23 $er(ent of !+ an"

4,7G0.1G at the en" of 582717-11.

,ont(ly ,ar-et Statistics October 2/120

Inde% Point #(ange #(ange 'D c(angeDSI 0,FGH.GH -3.F2 -1.20= -10.03=

DS$32/ 0,47.F3 4.10 7.14= -17.02=D&$4 3,3G0.G2 -47.3G -1.12= 13.40=

5igure: mar-et capitali6ation

G


10/27

9te$s have #een taen to amen" 9e(urtes an" *(hange ommsson

@u#l( &ssueA Rules, 277 to avo" msuse of #oo #ul"ng metho".

&n or"er to se$arate the o)nersh$, management an" tra"ng of sto(

e*(hange, the $ro(ess of "emutualaton n +haa an" httagong 9to(

*(hanges has #egun.

4ear and ,edium 'erm Outloo- of )anglades( $conomy

The >e"um-Term >a(roe(onom( 5rame)or @>T>5A for 582712-271 sets out

the e(onom( an"

's(al n"(ators for the ne*t 've 's(al years. ons"erng the $ros$e(ts an"

$otentals rss n the (onte*tof glo#al an" "omest( e(onom( s(enaro, real !+

gro)th has #een estmate" at F $er(ent for 582711-12. The !+ gro)th s

targete" to #e H $er(ent n 582713-14 #ase" on the assum$tons of

furtherm$rovement n the glo#al an" "omest( e(onom( stuaton an" tang

nto a((ount the e*$e(te" m$a(tsof reforms ntate" n varous se(tors.

&t s e*$e(te" that gven the ntatves at )or, Bangla"esh e(onomy )ll #e a#le

to a(heve F $er(ent gro)th n 582711-12, )h(h )ll gra"ually n(rease to H

$er(ent n 582713-14. Ta#le 1.2 hghlghts the$ro%e(ton of ey ma(roe(onom(

n"(ators "urng 582711-12 to 582714-1.

17


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'able: ,edium 'erm ,acroeconomic 5rame*or-7 2/1232/18:

9ey Indicators

11

2011-12 2012-13 2014-15Indicator

Real Sector

Nominal GDP Growth (%)

Real GDP Growth (%)

CPI Inflation (%)

Gross Investment (% GDP)

Private

Public

Domestic savings

National Savings

Fiscal Sector (% o GDP)

!otal Reven"e

Ta Revenue

N!R"Ta Revenue

Non"N!R Ta Revenue

Non"Ta Revenue

!otal #$endit"re

Revenue #$eniture

&nnual Develo$ment Prog'

&verall 'alance

inancing

Domestic inancing

!aning S*stem

Non"!an

#$ternal Financin (net)

200-0*

+ct"al

200*-10

+ct"al

2010-11

#stimated

2013-14

Pro,ection

2015-1

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24.4

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2.5

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"2'4

,'.

1.4

4'2

,',

2'3

1.2

4'2

,',

2'3

2.0

4'2

,',

2'3

2.0

4'2

,',

2'3

2.0

4'2

,',

2'3

2.0

4'2

,',

2'3

2.0

one and redit (ear-on-ear % cane

Net Domestic &ssets

Domestic Creit

Creit to the Private sector

!roa 5one*

#$ternal Sector

#$ort6 f'o'b (% Change)

Im$ort6 f'o'b (% Change)

Remittance (billion 7S8)

Current account !alance (%

GDP)

oreign #change Reserve

(billion 7S8)

Reserve in 5onth of Im$ort

+/'3

+.'0

+1'-

+0',

+3'3

+/'-

,1',

,,'1

,2'/

+/'/

+3'2

+-'2

+/'4

+0',

+3'2

+.'3

+-'+

+0'.

+3'2

+.'3

+-'2

+0'.

+3'.

+.'/

+-'2

+0',

+3'.

+.'.

+.',

+3'0

+3'.

+.'.

+2'+

1',

0'/

1',

.'1

++'2

42'2

1.'2

++'.

+-'2

+1'2

+,'1

+-'2

+1'2

+4'-

+-'.

+1'.

+.'+

+-'.

+1'.

+/'2

+/'2

+.'2

+0'2

,'/ 4'/ "2'/ "2'3 "2'- "2'1 "2', 2'+

/'.

4'3

+2'/

.'+

+2'2

4'1

+2'-

4',

++'3

4'+

+4',

4'+

+1'.

4'2

+-'/

4'2


12/27

. Implementing t(e investment plan

.1. Investment in ,utual 5und:Analysis of ,utual 5und mar-et in )anglades(

,utual 5und5ace;alue Price PJTJC? 5JN+-1 17 12 12

>B? 19T >JTJC? 5JN+ 17 F.4 14

&B C>? T/&R+ NRB >JTJC? 5JN+ 17 F.F G4

&5& BCNL 19T >JTJC? 5JN+ 17 G.2 17.03

2N+ &B >.5. 17 077 17.3G

5&R9T BCN!?C+9/ 5&M+ &N6> 5JN+ 17 G.2 17.H0

B? 5&R9T >JTJC? 5JN+ 17 17.2 12.F4

CB BCNL 19T >JTJC? 5JN+ 17 G.H 10.1G

6J?CR ?&5 5&R9T >JTJC? 5JN+ 17 F.G 13.H1C&B? 19T &9?C>& >JTJC? 5JN+ 17 F.0 14.4

/ 5&R9T >JTJC? 5JN+ 17 F. 1F.74

?R !?6BC? BCN!?C+9/ >JTJC? 5JN+6N

17H.G

1F.FH

19T &B >.5. 17 H27 1F.H1

&B C>? 96N+ >JTJC? 5JN+ 17 H.F 1F.G2

TRJ9T BCNL 19T >JTJC? 5JN+ 17 17.0 1H.0G

5&R9T ICNCTC BCNL >JTJC? 5JN+ 17 F.H 1G.4

&B >?689 R6&+NT >5 1:9/> 1 17 17.1

22.F0

C&>9 19T >.5. 17 4G 2.73

R&> 5&NCN 5&R9T >JTJC? 5JN+ 17 02.F 2.0F

/6N&M 5&NCN 19T >JTJC? 5JN+ 17 H.4 2.4

19T BCN!?C+9/ 9/&?C R&N 9CN!9T/C>.5. 17 117.0

2G.GF

&5&? &9?C>& >JTJC? 5JN+-1 17 F.0 07.32

!RC>N 6N : 9/> TW6 17 24.3 0.2G

&B C>? 19T >.5. 17 33.1 3.3F

+B/ 5&R9T >JTJC? 5JN+ 17 H.2 37.4

!RC>N >JTJC? 5JN+ 6N 17 4.4 3H.12

!RN +?TC >JTJC? 5JN+ 17 H 3H.F4FT/ &B >.5. 17 F .G

&B C>? 19T NRB >JTJC? 5JN+ 17 07.4 F.1F

3T/ &B >.5. 17 104 F.24

4T/ &B >.5. 17 114.4 F.00

0R+ &B >.5. 17 1 F.H1

T/ &B >.5. 17 44.2 H.73

&B C>? 2N+ NRB >JTJC? 5JN+ 17 13.1 H.43

&B C>? &9?C>& >JTJC? 5JN+ 17 2.0 G.HG

12


13/27

Cs all the mutual fun"s "versfy ther fun" n varous assets, )e (an use the

$r(e earnng rato to 'n" out the #est mutual fun". We )ant to $( #et)een the

& >JTJC? 5JN+-1 #e(ause ts also a ne) mutual fun"A. &f )e

(al(ulate the average "v"en" from these mutual fun"s )e get 2G.34=

4ame of ,utual 5undsfacevalue Price

P?689R6&+NT >5 17 17.1

22.F04 12 H.4

C&>9 19T >.5. 17 4G 2.73 27 2H 23

R&> 5&NCN 5&R9T >5 17 02.F 2.0F 27 12.4 1.24

/6N&M 5&NCN 19T >5 17 H.4 2.4 4 17 F.419T BCN!?C+9/ 9/&?CR&N 9CN!9T/C >.5. 17 117.0

2G.GF177 124 112.4

!RC>N 6N : 9/>TW6 17 24.3

0.2G 17 H

Total 7 232G.34H000

00

Total "v"en" earnng from only these mutual fun" @1 unt ea(hA s B+T 1F.F4

@fa(e value * Cverage "v"en"A. 9o )e (an (al(ulate return on nvestment as

F.1H= @total "v"en" return?689 R6&+NT >5 1:9/> 1 477 17.1 4747 17177

C&>9 19T >.5. 247 4G 13F47 2G477

R&> 5&NCN 5&R9T >JTJC? 5JN+ 477 02.F 1047 02F77

/6N&M 5&NCN 19T >JTJC? 5JN+ 477 H.4 3247 H47719T BCN!?C+9/ 9/&?C R&N9CN!9T/C >.5. 477 117.0 44147 117077

!RC>N 6N : 9/> TW6 477 24.3 12F77 24377

Total 23 17H247 21477

9o, )e nee" to nvest )D' 218>//on mutual fun", an" ea(h year )e )ll earn

)D' 1>>>>. ?.1@0 @Wthout (ons"erng the $r(e n(reaseA

10


14/27

.2. Sector Investment: #ement Industry:ement n"ustry of Bangla"esh has #een o#servng tremen"ous gro)th "urng

last 've years "rven #y n(rease" $a(e of ur#anaton an" m$lementaton of

large nfrastru(ture $ro%e(ts. urrent nstalle" (a$a(ty of the Bangla"esh

ement &n"ustry s a#out 22 mn metr( tonnes @mmtA. C(tual (a$a(ty of 14-1F

mmt s mu(h lo)er than nstalle" (a$a(ty of 22 mmt "ue to su$$ly (onstrants

for $o)er an" (lners. Totalmaret se s nearly J9+ 1.0 #n.

O9our(e: B>C P Resear(h, &+? &nvestments ?t".

ortlan" om$oste ement @A s )"ely use" from the year 2770 su#sttutng

6r"nary ortlan" ement @6A. urrent avala#lty of s G4= aganst 4= of

6 n our n"ustry.

The n"ustry s olgo$oly n nature )here to$ 12 $layers are alone (ontrollng

over H= of the total n"ustry (a$a(ty an" have $r(ng (ontrol.Cmong three

(onsumer grou$s of our n"ustry, n"v"ual home maers are the largest )th

37=, real estate "evelo$ers (onsttute 24= an" !overnment organaton, .e.,

?o(al !overnment ngneerng +e$artment @?!+A, Roa"s an" /gh)ays

+e$artment @R/+A, Bangla"esh Br"ge Cuthorty @BBCA (onsttutes 04= of the

n"ustry (onsum$ton.

=o* per capita consumption depicts gro*t( in t(e long term

+es$te the fa(t that the Bangla"eshQs (ement n"ustry has gro)n #y 42= over

last ' ve years, $er (a$ta (onsum$ton stll remans su#stantally $oor only H0g (om$are" )th the )orl" average of 307 g. er (a$ta (onsum$ton of

13


15/27

(ement s 1F3 g n &n"a, 101 g n astan, 1FH g n 9r ?ana an" 37H g n

etnam. Ths un"erlnes tremen"ous s(o$e for gro)th n the Bangla"esh (ement

n"ustry n the long term.

5gure: &n"ustry +eman" an" ro"u(ton s(enaro

Industry is regional and seasonal in nature

Cs the freght (ost a((ounts for a su#stantal $ro$orton of sales $r(e, the rulng

maret $r(e of (ement #e(omes "erent n "erent regons n our (ountry.

&n"ustry s s$lt nto 've geogra$h( segments +haa 2=, >ongla 1=,

httagong 12=, 9ylhet H=, an" Ra%shah 2=.

Bangla"esh (ement n"ustry s also no)n for ts seasonalty )h(h (an #e as

hgh as 47=. ement "eman" "e(lnes "urng the monsoons "ue to a slo)"o)n

n (onstru(ton a(tvtes. 6n the other han", though the yearly (a$a(ty of the

n"ustry s saturate" )th over(a$a(ty, maret "eman" rses u$ to the ee(tve

(a$a(ty or even (rosses t "urng the 'rst 4 to months of the year.

Oligopoly industry dominated by local manufacturers

/e"el#erg, /ol(m an" ?afarge are the lea"ers among multnatonal (ement

manufa(turers an" 9hah an" >eghna are the lea"ng "omest( manufa(turers n

the n"ustry. 9hah ement s the maret lea"er )th 1= of the maret share,

follo)e" #y /e"el#erg )th 17= of the maret share. +urng the #oomng years

of 277G an" 2717, many small lo(al manufa(turers le remer, 9even r(le, >&

ement, Jnque ement an" >eghna ement n(rease" ther sales "rast(ally

r"ng on ther #ene'ts ofe(onomes of s(ale, #a()ar" lnage an" aggressve

maretng eort.

14


16/27

5igure: ,ar-et s(are 0 of ,ajor #ement companies

Positive outloo- *it( strong demand drivers in near future

ement n"ustry of Bangla"esh s n the gro)th stage (ons"erng theS?fe (y(le

of the n"ustryQ. ement (onsum$ton s e*$e(te" toenter ne) gro)th tra%e(tory

as many !ovt. nfrastru(ture s(hemes are a#out to tae o , #es"es a gro)ng

"eman" for n"v"ualhousng "eman" )th rsng remttan(e n;o). +eman"

(orrelaton )th !+ n"(ates sta#le gro)th n u$(omng years. The

(ountry)tnesse" .21= !+ gro)th on an average n last 've years an" F.2= s

e*$e(te" n ne*t 's(al year. C((eleraton of nfrastru(tures$en"ng shoul" "rve

(ement "eman" at a hgher rate n the u$(omng years.

Portfolio formation:

We (an see that the (ement n"ustry has a lot of $otental. We are gong to

nvest B+T 277777 n ths se(tor. 9hah ement s the maret lea"er, #ut they "o

not have any sto(s n the se(on"ary maret. Be(ause of ther lo) maret share,

)e are "s(ar"ng Cramt ement an" on'"en(e ement.

6ur ortfolo )ll (onsst the follo)ng sto(s:

lot

si6e

,ar-e

t price

#ost

per

lot

*eig

(t

Allocat

ed

amount

lot !oun

ded

'otal

eidelberg

#ement )d

47 2H1.4 137F4 37= H7777 4.F H3347

,eg(na #ement 177 114 11477 07= 7777 4.2 4 4F477

=A5A!&$ SB!,A

#$,$4' ='D.

00.H 477 1G77 27= 37777 2.3 2 00H77

,.I. #ement

5actory =imited

177 111. 1117 17= 27777 1.H 2 22027

4004 277777 1GH7F7

1


17/27

5igure: Stoc- price of eidelberg cement over last 1 year

We (an see that sto( $r(e s gong u$ )thout mu(h "evaton. 9o, ths )ll #e a

less rsy sto( )th a goo" $otental return.

1F


18/27

5igure: Stoc- price of ,eg(na #ement over last 1 year

We (an see there are some vara#lty n meghna (ements $r(e, #ut (urrently

the $r(e s lo). t s the #est tme to #uy ths sto(.

5igure: Stoc- price of =afarge S #ement over last 1 year

1H


19/27

.". 5D! investment5+R s a '*e" amount nvestment that earns '*e" rates of &nterest over a set

$ero" of tme. &nterest )ll #e a""e" to '*e" amount ea(h year to #ul" u$ the

value of nvestment. The nterest s ta*a#le at the rate of 17=.

)an- Interest rate 'imeI5I# )an- =td. 12.47= 2 years

A) )an- 12.47= 2 8ears'(e #ity )an- 12.47= 2 8ears

Prime )an- =td 12.47= 2 year

5igure: 5D! !ates

5rom the a#ove (hart )e (an see that all #ans$rov"e 5+R at 12.47=. 5+R soere" n a (ho(e of terms. We )ll (hoose t)o years term that )ll guarantee

12.4= nterest n(ome u$on maturty. 27= of our fun" )h(h s taa 3la(s )ll #e

nveste" n ths term "e$ost. Ths nvestment )ll gve us the (han(e of (a$tal

$reservaton an" total return at the same tme t )ll gve us the se(urty of

earnng as )ell as nvestment fun" that mat(h our nvestment o#%e(tve.

But one $ro#lem s that to get the ma*mum #ene't )e )ll not #e a#le to

)th"ra) money from ths nvestment #efore maturty. &f )e )ant to (ash-out tearler than maturty then nterest )ll #e "e"u(te" from the amount (ash n. We

1G


20/27

have $lanne" to nvest n 2 year 5+R that )ll ensures smooth nterest n(ome on

the amount. &nvestng n 5+R)ll also gve an o$ton of "vers'(aton of our

$ortfolo that )ll (ontr#ute to the re"u(ton of rs of the $ortfolo as

"vers'(atons of fun"s re"u(e rs of an nvestment. By "e("ng to nvest n

5+R )e have taen u$ some)hat rs averse nvestment strategy as return from

5+R fun" s almost (ertan. But some rs s almost nherent )th ths nvestment

one su(h rs s n;aton as the n;aton $(s u$ $o)er of (a$tal $reservaton of

5+R fun"s go "o)n sgn'(antly P on the #a(groun" of hgher n;aton #ans

may n(rease the rate on 5+R )h(h )ll then #e lost o$$ortunty of the fun"s to

get hgher n(ome as fun"s get lo(e" n for a '*e" $ero" of tme.

$arning from 5D!

2/12 2/1" 2/1 2/1> 2/18 2/1?Deposited 37777

7Deposit C

Interest0

34777

7

4724

7

4G401.

0

37F22.

F F27H10

H17G13.

'a% 1/ on

interest0 4777 4724

11G40.1

0

1033F.2

F

1412H.1

F 1F71G.24et 33477

7

3442

4

44F4FH.

1

2F2F4.

3

F74H3.

H

FG0HG4.

3

n"ng #alan(e at the en" of 4thyear s B+T FG0HG4.3 after ta*.

Summary

4ame of Security: ie De$osit

Duration:2 8ears, 2 8ears, 1 8ear @as 5+R mature after 2 yearsA

Denomination: B+T 377777

!ate of Prot:12.4=

Total amount earne" after 4 year: B+T FG0HG4

27


21/27

.. Investment in saving certicate&t s an nvestment for a s$e('e" $ero" of tme of a s$e('e" amount. 6n(e

nvestment s ma"e money )ll #e lo(e" n for that $ero" P early )th"ra)al

from nvestment )ll result n $enalty of the nterest "e"u(ton of the $rn($al

amount P no nterest s $a" f (ashe" )thn one year. &t s rs free nvestment

as t s #a(e" #y the government P at the same tme guarantees @12.4G-10.34A

= nterest n(ome "e$en"ng on the maturty $ero". Ta* on nterest s also lo)er

only 4= of the earnngs. We )ll nvest n Poribarsanc(ayapatra 5amily

Saving #erticate 0. 17= of our (a$tal )ll #e nveste" n t as a means of

"vers'(aton of $ortfolo of assets.

But fe) $ro#lems mght mae our "e(son of nvestng n savng (ert'(ate less

ee(tve f the (urrent rate of n;aton (rosses "ou#le "gt mar then t (an

serously ae(t our earnngs as n;aton )ll ero"e our nterest n(ome P thus

$ur(hasng $o)er of our money. 6n the other han" as the money gets lo(e" n

for 've years as )e )ll nvest so f the rate on other '*e" n(ome nvestment

goes u$ at that tme then )e )ll lose (han(e of ganng hgher n(ome of our

fun".

Investment

amo"nt (!aa)

ontl Proit amo"nt (!aa)

+mo"nt o Proit6 +mo"nt o SSP66 +mo"nt o !otal roit

1 2 3 4 (273)

+26222'22 +2+'-/ +2'1, ++,'23

,26222'22 ,24'44 ,2'34 ,,1'+/

.26222'22 .23'44 .,'23 .-2'1,

21


22/27

+6226222'22 +62+-'-/ +21'+/ +6+,2'34

28008000.00 28033.33 20.33 28241./

.6226222'22 .6234'44 .,2'34 .6-21'+/

+26226222'22 +26+--'-/ +621+'-/ ++6,23'44

Oro't on )h(h sour(e ta* "e"u(ton s a$$l(a#le

OO99 9o(al 9e(urty remum

We )ll nvest)D' 27 //7///n ths se(urty an" earn )D' 221every month

for ne*t 4 years.

Summary:

4ame of Security:Poribarsancha*a$atra (amil* Saving Certificate )

Duration:4 8ears


!ate of Prot:10.34= @on maturtyA.

.>. Investment in 'angible Asset: #4& Auto !ic-s(a*

We )ll #uy a N! auto r(sha) an" earn money #y rentng. Ct

(urrent maret a goo" qualty N! auto r(sha) s sellng at

B+T H77777. Ths s 37= of our total nvestment fun".

urrently "aly rent n(ome from N! Cuto Rssha) s B+T1777.

>onthly mantenan(e (ost for a N! auto r(sha) s B+T 2477

n 2712.

We (an e*$e(t a F= n;aton rate.

Ct the en" of the 4 year $ero" )e (an sell the Cuto R(sha) for 3 lah

@o$tmst(A to 2 lah @$essmst(A taa.

Optimistic vie*

22


23/27

&n an o$tmst( ve), )e e*$e(t the N! auto r(sha) )ll run 07 "ays a month.

@Wthout any #rea "o)nA. Termnal value of the N! Cuto R(sha) s 3lah

taa. &n that (ase )e get an &RR of 31.G4=. >eans, rate or return s 31.G4=

2/1" 2/1 2/1> 2/18 2/1?

,ont(ly rent

income

07777 02177 0303F 0F41.

2G

0G020.

HH,ont(ly

maintenance cost

2477 2F4 2H2.2

4

072.

7H

02F.G

G,ont(ly 4et Income 2F477 2G324 013H3.

F4

00HH.

H

073.

HGAnnual Income 007777 040177 0FFH1

F

3732

3.2

30242

.F'erminal ;alue 377777

total cas( in+o* 007777 040177 0FFH1

F

3732

3.2

H0242

.F

Pessimistic vie*&n a $essmst( ve), )e (an e*$e(t the N! to run only 27 "ays a )ee,other

17 "ays &t )ll #e at the garage for mantenan(e. Cn" the termnal value )oul"

#e %ust 2 lah taa. &n ths (ase )e get an &RR of 2F.1=. >eans, rate of return s

2F.1=.

2/1" 2/1 2/1> 2/18 2/1?

,ont(ly rent

income

23777 24H7 2F3FF.

2G371.

70

0134G.

1,ont(ly

maintenance cost

2477 2F4 2H2.2

4

072.

7H

02F.G

G,ont(ly 4et

Income

21477 20774 2314.

04

200H.

32

2H1H2.

11Annual Income 24H777 2F77 2G40H

3.2

017

1.1

00H1H

4.3'erminal ;alue 27777

7total cas( in+o* 24H777 2F77 2G40H

3.2

017

1.1

40H1H

4.3

We (an e*$e(t 47= (han(e of #oth o$tmst( an" $essmst( (ase. Cs a result

our $oss#le rate of return s @47= * 31.G4= D 47= * 2F.1=A 03.44=

ths nvestment )ll gve us monthly net n(ome from B+T 2F477 to B+T 21477

@n the 'rst yearA.

20


24/27

.8. Investment in 'angible Asset: &old&nvestment n gol" s not very llqu" #ut ths nvestment (an #rng hefty $ro't. &t

requres su#stantal (a$tal nvestment. &t generates no (ash unless sol". &ts

gra"ng $ro(ess "etermnes ts qualty though su#%e(tve. &n our $ortfolo )e

)antto nvest t2la(s n gol". Cs $art of our nvestment strategy of havng large

gan on sngle nvestment )e thought gol" (oul" #e han"y nvestment gven the

rsng tren" of the gol" $r(e. C((or"ng to our $ol(y statement o#%e(tve gol"

nvestment )ll mat(h our strategy as )e )ante" to nvest some $orton of fun"s

nto har" asset. But there s some rss nvolve" $uttng money on the gol".

9ometmes t (oul" $rove as gam#leas gol" $r(e ten" to #e volatle over tme so

(han(e of earnng large $ro't may "mnsh qu(ly. &t (oul" also #e rsy n the

sense that f nvestors #uy gol" P hol" t for a longer $ero" of tme #ut (annot

aor" to sell t as the $r(e "oes not go u$ to mae u$ for #ought $r(e P hol"ng

$ero" (osts. 9o nvestors )ll #e n %eo$ar"y f hol"s gol" #ut (annot sell t to

mae nvestment n other asset. But stll )e )ll nvest n ths sol" asset as the

$r(e of t s sho)ng no sgn of let u$ re(ently P s $(ng u$ almost "aly #ass.

K7.77

K277.77

K377.77

K77.77

KH77.77

K1,777.77

K1,277.77

K1,377.77K1,77.77

K1,H77.77

5igure: gold price per ounce

ear Price per Ounce &ro*t( rate

2// KGF2.04 12=

2/1/ K1,223.40 2=

2/11 K1,4F1.42 2H=

2/12 K1F7H.4 G=

2/1" K1G30.F @fore(aste"A 13=

23


25/27

2/1 K221.GF @fore(aste"A 13=

2/1> K2414.GH@fore(aste"A 10=

2/18 K2H12.G4 @fore(aste"A 12=

2/1? K0100.11 @fore(aste"A 11=

5or (al(ulatng the fore(aste" gro)th rate )e use" the )eght of @47=. 07=,

17= an" 17= for (onse(utve yearsA

We (an see that, f )e nvest B+T 1H212 @1.0 oun(e of gol"A on gol" n 2712, )e

(an mae B+T 000GG7.1340 at the en" of year 4. /ere the a(tual return n 12.G=

But gol" s not a lqu" asset, an" the vara#lty n $r(e s very hgh. ons"erng

the rs the return s very lo). After analy6ing t(e situation *e discarded

&old from our portfolio.

.?. Investment in =and

Cs )e have lmte" #u"get, )e )ll nvest only n one 9hotnagsho of ?an". Cfter

analyng a lot of ?an" $r(es )e have foun" a very suta#le lan" for nvestment

n Natore @ra%shahA.

We see the average gro)th rate for lan" n that area s 27.3F= usng the

average gro)th rate )e (an get the fore(aste" lan" $r(e n that area

/ere the gro)th rate s the rate of return for lan". 9o )e (an e*$e(t a 27.3F=

return from ths nvestment.

Summary:

4ame of Security:9an

Position9Natore (ra:shahi)6 ;ust outsie Natore Town'

Duration:4 8ears

24

2//? 2//@ 2// 2/1/ 2/11 2/12

=and Price H77777 G4777 114777 104777 14777 277777

&ro*t(

rate

7.21742 7.1F0G10 7.222222 7.212121

2/1" 2/1 2/1> 2/18 2/1?

5orecasted

Price

237G0G.1 2G724H.0342 03GF0 32123G.4 47F3FF.4


26/27


'otal amount received after > ears:B+T 47F3FF

!ate of return:27.3F= @on maturtyA.

>. #onclusion:&n mang our $ortfolo )e have tre" to #e as mu(h "versfy as $oss#le. The

ma*mum amount of our $ortfolo s atta(he" )th the N! auto R(sha)

$ro%e(t. We (oul" not re"u(e the amount, #e(ause of the hgh $r(e of N! auto

R(sha). But for other assets, )e tre" to nvest from 17= to 27= of our total

$ortfolo.

The #on" )e nveste" s a government #on", so ths s the safest se(urty n our

$ortfolo. &t has a return of 10.4= @tough the (a$tal )ll #e '*e" for 4 yearsA.

&nvestment n 5+R )ll gve us slghtly lo)er rate of return, 12.4=. But the

amount s lqu" after every 2 years. 9o n (ase of n;aton or other rs, )e (an

a"%ust as requre".

urrently n Bangla"esh, sto( maret s very volatle, thats )hy )e tre" to

nvest very lo) n ths se(tor @17=A. We have analye" the maret an" only

nveste" n (ement se(tor @as se(tor fun"A. Cs )e foun" that (ement se(tor has a

goo" gro)th $otental n future.

We have analye" the mutual fun" maret, an" sele(te" the #est mutual fun"s

an" nveste" 2 lah taa on them.

We ntally )ante" to nvest n gol", #ut foun" that the return s very lo) @12.F=A

for ths hgh rs asset. Cfter (ons"erng the rs-return ssue, )e have "e("e"

not to nvest n !ol".

2


27/27

Cs )e have lmte" asset, )e (oul" only nvest very lttle n ?an". We foun" a

suta#le lan", %ust n our #u"get @n Natore, Ra%shahA. We (al(ulate" the rate of

return to #e 27.3F=.

&f )e m$lement ths nvestment )e (an get #oth (urrent n(ome @from Cutor(sha) an" 9avng "e$ostA an" (a$tal gan @from 9to(, >utual 5un", ?an",

5+RA.

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