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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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NRB Bank Set to Debut on DSE in ‘N’ Category from Tomorrow

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NRB Bank

NRB Bank is gearing up for its trading debut on Tuesday, February 27, listed under the “N” category on the Dhaka Stock Exchange (DSE). The trading code assigned to the company is “NRBBANK,” as announced by the Dhaka bourse.

In the initial public offering (IPO) phase, general investors were allotted 255 shares each, while non-resident Bangladeshis (NRBs) received 209 shares against a Tk10,000 deposit. The DSE distributed the IPO shares on a pro-rata basis.

The IPO witnessed significant oversubscription, reaching 3.61 times, according to a DSE press release. Approval from the Bangladesh Securities and Exchange Commission (BSEC) for the bank’s plan to raise Tk100 crore through issuing new shares at Tk10 each was granted on November 9.

Allocating the funds raised, the bank plans to invest Tk92 crore in government securities, Tk4.17 crore in the secondary market, and Tk3.83 crore to cover IPO expenses.

As of the financial report spanning January to September 2023, NRB Bank reported a consolidated net profit after tax of Tk16 crore, with earnings per share at Tk0.27. This was a notable decrease from Tk55 crore and Tk0.94, respectively, in 2022. The net asset value per share stood at Tk12.72 as of September 30, 2023.

The bank’s non-performing loan (NPL) ratio was reported at 6.10% of the total outstanding as of September 2023, compared to 3.22% a year ago. Established in 2013, NRB Bank offers a diverse range of products and services in retail banking, SME banking, NRB banking, corporate banking, and e-banking.

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Asian Markets Dip Amid Profit-Taking Following US Records

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In Monday’s trading session, most Asian markets witnessed a downturn, despite Tokyo’s Nikkei index reaching new all-time highs following record closures of two of the three main US indices. The recent market surge, fueled by outstanding results from US tech giant Nvidia, prompted investors to engage in profit-taking, leading to a moderation in the impressive rally, analysts noted.

On Friday, Wall Street saw the Dow and the S&P closing at record highs, while the Nasdaq, dominated by tech stocks, experienced a slip, following a notable three-percent surge the day before.

Rodrigo Catril, National Australia Bank’s senior FX strategist, observed that the advance of Nvidia moderated, and other major tech stocks saw a decline after a robust run driven by artificial intelligence.

Tokyo’s Nikkei index managed to defy the trend, rising by 0.5 percent and surpassing the December 1989 record it had smashed on the previous Friday. However, Chinese shares struggled, with Hong Kong opening higher before losing 0.6 percent, and Shanghai down by 0.4 percent.

Despite the Chinese government expressing intentions to stimulate its economy through “piecemeal incentives” such as boosting sales of cars and home appliances, Asian markets experienced setbacks.

Singapore recorded a 0.9 percent drop, Seoul fell by 0.5 percent, while Bangkok, Jakarta, and Wellington reported declines. Sydney remained relatively flat, and Taipei gained a modest 0.1 percent.

Oil prices continued their descent, extending losses from Friday, as the G7 countries pledged new sanctions against Russia, marking two years since its invasion of Ukraine. Catril highlighted concerns about a lack of demand for crude oil, coupled with uncertainty arising from the new sanctions.

Stephen Innes of SPI Asset Management expressed expectations of a slowdown in the global oil supply throughout the year. He pointed to challenges facing the Chinese economy and the Federal Reserve’s efforts to mitigate inflationary pressures as factors likely to impact global growth and oil demand.

Looking ahead, the upcoming week holds significant indicators, including January Consumer Price Index (CPI) data for Australia and Japan. The week culminates in a “Super Friday” featuring key inflation and manufacturing data releases from both the United States and China, adding to the ongoing market uncertainties.

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Rollercoaster Ride for Index Values results Mixed Performance

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Dhaka Stock Exchange DSE, Bourse on the first working day of the week, February 25, ended with price Index mixed & turnover drops. This information is known from DSE sources.

804 crore 98 lakh taka shares were traded on this day. 57 crore 19 lakh less tradings were done in DSE today compared to the previous workday, 22 February, Shares worth Tk  862 crores 18 lakh shares were traded last time, Thursday.

The benchmark DSEX lost 14.32 points or 6,259 The Shariah-based index DSES gained 2.03 points or 1,362, and the blue-chip index DS30 decreased by 2.30 points or 2,137.

Of the issues traded, 96 advanced, 243 declined and 56 remained unchanged.

Bangladesh Monospool Paper Manufacturing Co. Limited ranked top gainer on DSE, the share price increased by Tk 18.30 paisa or 9.98 percent. On this day, the share was last traded at Tk 201.60 paisa.

EBL 1st Mutual Fund ranked top loser on the DSE, the share price dropped by Tk 0.50 paisa or 7.81 percent. On this day, the share was last traded at Tk 5.90 paisa.

DSE topped on trade is Best Holdings Limited 39 crore 8 lakh takas of shares of the company have been traded.

A total of 35 companies’ shares were traded in the Block on the Dhaka Stock Exchange, 62 lakh 58 thousand 465 shares of the companies were traded. The financial value of which is 38 crore 89 lakh taka

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