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Minori Bangladesh in 3-Year Pact with Safa Capital for Tk400cr Emerald Oil Shares

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Minori Bangladesh Ltd, the largest shareholder of rice bran oil producer Emerald Oil Industries, has signed a three-year share purchase agreement with Dubai-based Safa Capital, seeking to sell its Tk400 crore ($47 million) worth of Emerald Oil shares. In the event of challenges in selling the shares, Minori has the flexibility to leverage them as collateral for a loan from the foreign investor, Safa Capital.

The anticipated funds from this agreement are earmarked for facilitating the expansion of Emerald Oil, a publicly traded rice bran oil producer that Minori took charge of after the defaulting sponsors abandoned the factory, leading to a six-year hiatus. Minori’s chairman, Miya Mamun, indicated that the funds would be crucial for various purposes, including settling defaulted loans from the original sponsors, such as the 30% shares held by Basic Bank.

Mamun, who is also a director of Emerald Oil, explained that the funds would play a crucial role in acquiring shares, supporting the company’s growth, and investing in undervalued shares of listed companies in Bangladesh. He highlighted the significance of the deal for the country’s financial markets, emphasizing the need for stronger foreign currency inflows.

Under the terms of the agreement, Minori would pay Safa Capital a commitment fee of 3% of the committed sum of Tk400 crore. Additionally, the parties aim to trade approximately seven times the shares compared to the daily average traded during the reference period.

As of now, Minori holds more than 39% of Emerald Oil shares, with approval granted by the securities regulator a year ago for Minori to subscribe to 3.15 crore new shares at a face value of Tk10 each. These new shares, constituting more than 30% of the total, are subject to a three-year lock-in period.

While the new shares are yet to be credited to Minori, they are expected to be a valuable asset once dividends are disbursed, according to Miya Mamun. However, Minori has the option to immediately sell over 5% of its Emerald Oil shares, with a public announcement, and the flexibility to buy more shares from the market and sell them to the foreign investor.

The securities regulations mandate a minimum shareholding of 2% for each shareholder director and a collective ownership of 30% by sponsors and directors. Last month, Emerald Oil Industries obtained regulatory approval to use sponsor-director shares, exceeding the minimum regulatory threshold of 30%, as collateral for loans, providing additional financial flexibility.

Despite the positive trajectory, Mamun highlighted that the company’s factory in the Sherpur district has experienced a production slowdown in the last one and a half months due to an acute shortage of gas. However, plans are in place to import a new husk boiler line, with coal as the primary fuel, to resume production by mid-March, doubling daily capacity to nearly four lakh tonnes.

Emerald Oil shares, with a face value of Tk10, closed 3.87% higher at Tk75.2 apiece on the Dhaka Stock Exchange on Sunday. The company, known for its Spondon branded rice bran oil, began its market presence in 2011 but went off production in 2017 following a loan scam involving its original sponsors. Minori’s involvement in 2021 led to the resumption of production and profitability for Emerald Oil.

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Bearish Trend on DSE

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Dhaka Stock Market DSE, Bourse on the last working day of the week, 18th July, ended with a drop in Indices and Turnover from the previous working session. This information is known from DSE sources.

391 crore 52 lakh taka shares were traded on this day. 192 crore 89 lakh less tradings were done in DSE today compared to the previous workday, July 16th, Shares worth Tk 662 crores 24 lakh shares were traded last time, Tuesday.

The benchmark DSEX decreased 36.64 points or 5,446 The Shariah-based index DSES dropped 10.43 points or 1,191 and the blue-chip index DS30 lost by 8.10 points or 1,953.

Of the issues traded, 38 advanced, 311 declined and 46 remained unchanged.

Techno Drugs Limited ranked top gainer on DSE, the share price increased by Tk 3.10 paisa or 9.72 percent. On this day, the share was last traded at Tk 35.00 paisa.

BD Thai Aluminium Limited ranked top loser on the DSE, the share price dropped by Tk 0.60 paisa or 3.00 percent. On this day, the share was last traded at Tk 19.40 paisa.

DSE topped on trade is Sea Pearl Beach Resort & Spa Limited 15 crore 86 lakh takas of company shares have been traded.

A total of 31 companies’ shares were traded in the Block on Dhaka Stock Exchange. A total of 1 crore 6 lakh 61 thousand 203 shares of the companies were traded. The financial value of which is 31 crore 82 lakh taka

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Asian markets drop with Wall St as Biden sparks fresh chip fears

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Asian markets sank with Wall Street on Thursday after a warning from the White House that it would target firms supplying China with key semiconductor technology, and Donald Trump’s comments on crucial chip supplier Taiwan.

The dollar remained subdued following its latest retreat caused by growing expectations that the Federal Reserve will cut interest rates at least once this year.

Firms linked to artificial intelligence have led a surge in equities this year as investors see the sector as the next major growth area, with market darling Nvidia piling on more than 140 percent since the start of the year.

The industry has helped push the S&P 500 and Nasdaq to multiple records in the past seven months, helped by the prospect of lower borrowing costs.

But the rally took a blow Wednesday when Bloomberg News reported that Joe Biden was looking at imposing strict curbs on firms such as Tokyo Electron and ASML if they continue allowing Beijing access to their chip tech.

The report, which comes as he looks to buttress his credentials as strong on China ahead of November’s presidential election against Trump, sent shivers across trading floors, sending the Philadelphia Semiconductor Index plunging nearly seven percent — its heaviest loss since 2020.

Nvidia dived more than six percent and Dutch firm ASML collapsed more than 12 percent.

Tokyo Electron fell 7.5 percent on Wednesday and a further 9.5 percent Thursday. TSMC shed more than three percent in Taipei.

Meanwhile, Trump’s comments that Taiwan — home of the key chip-maker TSMC and other major producers — should pay the US for its defence caused some geopolitical unease.

The fear fuelled a sell-off across Asian equities, with Tokyo and Taipei down at least two percent, while there were also hefty losses in Hong Kong, Shanghai, Sydney, Seoul, Singapore and Manila.

Analysts warned that the imposition of more chip restrictions could fuel further selling and lead to a correction in markets, which some warn have become overbought.

– ‘A big currency problem’ –

Worries over tech have offset the feel-good mood that has been sparked by recent data and comments from Fed officials indicating they are ready to cut interest rates as soon as September, and possibly again before January.

The latest boost for doves came in the central bank’s Beige Book summary of the economy, which said there were signs it was slowing.

“Expectations for the future of the economy were for slower growth over the next six months due to uncertainty around the upcoming election, domestic policy, geopolitical conflict, and inflation,” the report said.

The prospect of lower rates has weighed on the dollar, while the yen — which has been battered against the greenback this year — has won support from bets on a Bank of Japan hike in coming months.

“Markets are pricing in the Fed to start cutting rates in September, and risks of yen carry trade — the practice of borrowing low yielding currencies to invest in high yielding currencies — unwinding are building as yield gap narrows,” Saxo researchers said in a note.

“Recent comments from Trump have also hinted at concerns from US dollar strength.”

Trump, in Milwaukee for the Republican National Convention, has also weighed in on the dollar’s relative strength against the yen and yuan, telling Bloomberg Businessweek “we have a big currency problem” and “I would always notice they fought very hard to keep their currency low”.

Taylor Nugent, at National Australia Bank, said: “The comments play to the view (that) bilateral trade deficits and currency valuations are a key focus, and tariffs would be a key negotiating tool.”

Investors are keeping tabs on Beijing, where China’s leaders are expected to wrap up a key gathering, with hopes President Xi Jinping will unveil fresh measures to boost the world’s number two economy.

– Key figures around 0300 GMT –

Tokyo – Nikkei 225: DOWN 2.0 percent at 40,277.86 (break)

Hong Kong – Hang Seng Index: DOWN 0.5 percent at 17,652.42

Shanghai – Composite: DOWN 0.6 percent at 2,944.67

Pound/dollar: DOWN at $1.3007 from $1.3012 on Wednesday

Euro/dollar: DOWN at $1.0938 from $1.0941

Dollar/yen: DOWN at 155.92 yen from 156.33 yen

Euro/pound: UP at 84.09 pence at 84.07 pence

West Texas Intermediate: UP 0.7 percent at $83.39 per barrel

Brent North Sea Crude: UP 0.5 percent at $85.49 per barrel

New York – Dow: UP 0.6 percent at 41,198.08 (close)

London – FTSE 100: UP 0.3 percent at 8,187.46 (close)

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LafargeHolcim reveals their Q2 Financials

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One of the listed companies, LafargeHolcim Bangladesh Limited discloses its financial reports for the second quarter, (April – June 24).

The company’s Consolidated earnings per share (EPS) Tk 1.14 paisa in Q2 of the current financial year (April – June 24). Consolidated EPS was Tk. 0.69 for January-June 2024 as against Tk. 1.47 for the same period last year. EPS  was Tk 0.80 paisa during the same period last year. Consolidated NAV per share was Tk. 16.60 as of June 30, 2024.

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