Stocks
BSEC nudges to except bonds from capital market exposure
Bangladesh Securities and Exchange Commission, BSEC has recently sought the Bangladesh Bank for the 2nd time to exclude fixed-income securities – bonds, Sukuks and asset-backed securities – while calculating the capital market exposure of banks.
BSEC spokesperson and Executive Director Rezaul Karim said fixed-income securities are less erratic than shares and have lower extent of capital gain or loss. This is why the BSEC asked the central bank to exclude them while calculating exposure.
In terms of Bangladesh Merchant Bankers Association President Md Sayadur Rahman, the investment capacity of banks is dropping because of the listing of bonds on the capital market.
“Since they are not erratic, all types of bonds should be kept out of exposure calculation,” he added.
Ershad Hossain, managing director of the City Bank Capital Resources Limited, said the Bangladesh Bank should revisit the inclusion and exclusion of different asset classes that is equity, quasi-equity, and debt securities in the capital market exposure in a rational manner, instead of considering them on the basis of capital market listing.
“My logic is, if you list a bond, it will create an opportunity for bondholders to exit by selling its units, rather than waiting for it to mature,” he said.
In September this year, the Bangladesh Bank informed the securities regulator that banks have more chances to invest in the capital market, particularly in bonds.
Previous week, Treasury bonds, which are out of the capital market exposure limit, went live on trial trading in the bourses.
On the contrary, perpetual bonds are issued to raise AT1 capital to comply with the central bank’s Basel III guidelines. These bonds will include exposure when it will be listed on the stock exchanges.
6 perpetual bonds are already listed on the bourses which are included in the capital market exposure.
In August this year, the Bangladesh Bank allowed banks and non-bank financial institutions (NBFIs) to calculate their capital market exposure based on the cost of investments, instead of the market price of their held securities.
After that, banks and NBFIs do not need to sell shares to stay within their exposure limit after capital gain.
The central bank responded to repeated requests from the securities regulator and the investment industry as they believed the measure would help stabilize the capital market.
One of the Listed companies, National Polymer Limited has recommended 10.50% Cash Dividend for the year ended June 30, 2024.
It has reported Consolidated EPS of Tk 2.27 paisa, and Consolidated NAV per share of Tk 30.63 for the year ended March 31, 2024.
The Annual General Meeting (AGM) of the company will be held on December 18, through the digital platform. The record date for this has been fixed at October 22.
The Company also discloses its financial reports for the second quarter, (April – June 24).
As per the company’s consolidated life revenue account for April to June 2024, the excess of total income over total expenses, including claims (surplus), stood at Tk 1,394.24 million. This marks a significant increase from the surplus of Tk 823.68 million during the same period in 2023.
For the first half of 2024, from January to June, the company reported a surplus of Tk 2,177.57 million, compared to Tk 1,290.39 million in the corresponding period of the previous year.
Additionally, the Life Insurance Fund balance as of June 30, 2024, reached Tk 55,188.62 million, showing a net increase of Tk 5,892.25 million from Tk 49,296.37 million on June 30, 2023.
One of the Listed companies, Beacon Pharmaceuticals PLC has recommended 20% Cash dividend and 10% Cash Dividend to Sponsor Shareholder and Directors for the year ended June 30, 2024.
It has reported EPS of Tk 2.26 paisa, and NAV per share of Tk. 26.37 for the year ended June 30, 2024.
The Annual General Meeting (AGM) of the company will be held on December 23, through the digital platform. The record date for this has been fixed at October 27.
The Bangladesh Securities and Exchange Commission (BSEC) has removed three audit firms from its panel for their failure to secure enlistment with the Financial Reporting Council (FRC), according to a notice issued today.
The firms—A Hoque & Company, FAMES & R, and SK Barua & Company Chartered Accountants—were delisted following the FRC’s request. In December last year, the FRC published a list of enlisted audit firms and subsequently, in February, requested the BSEC to remove any firms that were not included on that list.
BSEC regulations mandate that financial statements signed by auditors outside its approved panel will not be accepted. With the removal of these three firms, the total number of audit firms on the BSEC panel has been reduced from 48 to 45.
Sources from the FRC revealed that 15-20 audit firms failed to secure enlistment last year, and approximately 45 chartered accountants are currently under restrictions imposed by the Institute of Chartered Accountants.
Although the delisted firms can no longer audit issuer companies or listed securities, they are allowed to complete audit and assurance services that were initiated before their removal, the BSEC clarified.
You must be logged in to post a comment Login