Many employees like Aminul Haque, a government employee, came to the booming share market to invest in bank shares expecting quick returns before quitting the scene. He infact came into this business two months ago and invested 2 lac taka already expecting big hand. All was well for the 29-year-old until December 19 last year when the premier bourse lost over 550 points, which ate up a significant part of his profits. But he did not worry after his mentor, who works for a brokerage house, assured him of a quick turnaround.

An irregular investor, Haque, with an MSc in biochemistry from a public university, stayed put, but he saw his hopes shattered in a storm that brought the stockmarket down to its knees. "I have lost half of what I was worth. This is dangerous. I never thought I would have to witness such disaster," he told The Daily Star over telephone. "I came to the market with a particular target, but all my hopes have been dashed," admitted a demoralised Haque. His comments came after the authorities stopped trading of both Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) before noon yesterday following a freefall of share prices on the bourses that stomached the highest-ever single day drop in indices.

The closure came at 11:50am after the benchmark index of the premier bourse, DGEN Index, slumped by 660 points and CSE Index, 914 points -- their highest drops. Haque was not alone. Thousands like him rushed to the markets with little knowledge about the share market, fundamentals of the companies they were investing in, despite repeated warnings from analysts. Nusrat Jahan, a student of Bangladesh Islami University, invested Tk 4.5 lakh last year and made it to Tk 10 lakh during the period. Now her current portfolio value went below the initial investment. Small-time retail investors blamed the regulator for failing to act fast enough, saying many have lost at least half of their investments due to the market collapse.

Mohammad Shihabuddin, who works for an audit firm, had the prices of his shares just halved. "Many of my colleagues are involved in the trade and they all are in shock," he told The Daily Star by phone. He said he understood that a correction was due, but it happened melodramatically. "The correction should take place gradually, not through drastic ups and downs." General investors said the regulator should have taken the closure decision earlier or during the first few minutes of yesterday's trade, which would have help avoid the doom.

"Many investors like us would have been able to avoid the slump if the decisions had been taken earlier. The collapse has already made many of us losers," said Utpal Kumar, an investor. Utpal, also a student, said the market has collapsed, as the central bank has imposed restrictions on banks and other financial institutions investing in the market. "The financial institutions, particularly banks, have already over-invested in the market. But following restrictions from Bangladesh Bank, they are not investing anymore. The market will go up once they start trading again." He said the investors who joined the market in November and December have been particularly affected. "Most of them have lost up to 70 percent on their investment."

Jewel Islam, a stock investor since 2006, blamed the authorities for the slump, as "they talk too much", doing more harm than good to the market. The 29-year-old business graduate said the banks which represent the bellwether stocks were responsible for the catastrophe. "They have been investing heavily in the market putting aside their core business."  anks logged as high as 90 percent growth in their operating profit in 2010, largely riding on the stockmarket boom. Many banks earned a big portion of their profit from the stockmarket. A bank involved in Islamic banking made a profit of about Tk 400 crore, of which Tk 100 crore came from its brokerage business.

He said many investors have withdrawn their money before the Eid. "As the marking is nose-diving, they will invest now. Small investors like us will suffer most," said Islam, who has invested Tk 2 lakh in the premier bourse. Shariful Alam, another small investor, said the market has fallen as investors are withdrawing money from the secondary market and diverting to new initial public offerings. Nahid Hasan, an investor, who also has lost about half in prices of his shares, said the decision was right, but it should have come earlier. He said his portfolio was valued at Tk 10 lakh just before the latest round of slumps. "It is now worth Tk 5 lakh only."

News: The Daily Star/Bangladesh/11 Jan 2011

Bangladesh Bank has dismissed the Securities and Exchange Commission's claim that there is a shortage of liquidity in the market.

"We don't want to lock into a blame game, but some quarters are spreading wrong information about the central bank in the market," Bangladesh Bank deputy governor Nazrul Huda told a press briefing at its conference room on Monday.

SEC chairman Ziaul Haque Khandkar at a press briefing at his office on the same day said the market was going through a 'liquidity crunch'.

Both the press conferences were held on the heels of share market's biggest-ever fall in its history.

"There is enough liquidity in the market and the Bangladesh Bank has injected three times more money into the market than the amount it withdraws as CRR (cash reserve ratio)," Nazrul Huda said.

The central bank has increased cash reserve requirement by 0.5 percentage point with effect from December 15 and it mopped up about Tk 20 billion from the market due to that.

"It's totally wrong information that the market is experiencing liquidity shortage due to increase in CRR," he said.

"Money and capital markets are two different 'markets' and the Bangladesh Bank is responsible for money market while the SEC is responsible for the capital market," he explained.

"But we cannot sit idle considering the gravity of the issue and we sat with scheduled banks today (Monday) to discuss it," he said.

"The central bank has assured the banks that it will not deal harshly with the banks which have exceeded the single borrower exposure limit," he said.

According to regulation, a bank cannot give loan which is over 15 percent of its capital meaning if a bank has Tk 100 capital, it can give maximum Tk 15 as loan to a single borrower.

"Some banks have violated the rules and we'll handle it in a relaxed manner," Nazrul said.

"We've also asked the banks to provide information about their exposure to the capital market and they can adjust the exposure if they cross the legal limit," he said.

The Bank Company Act stipulates that a bank cannot invest in the capital market 10 percent of its total liabilities. Liabilities comprise total deposit and capital.

Nazrul said the central bank sought investment information from the banks in 2009 but 'in fact we became villains."

Deputy governor Ziaul Hasan Siddique said the banks have Tk 9.14 billion excess reserve with the central bank, which means its completely idle money.

Earlier, Association of Bankers, Bangladesh president Mahmood Sattar, chairman of Primary Dealers' Association Anis A Khan and Sonali Bank managing director Humayun Kabir held a meeting with governor and three deputy governors.

After the meeting, Mahmood told journalists that institutional investors will start their operations in full swing as market has enough liquidity.

Anis Khan said his bank bought Tk 1 billion of shares on Sunday.

Humayun Kabir said price is declining and it is giving a signal to the market that it is good time to buy.

Source: bdnews24.com/ Bangladesh/ Jan-10-2011

Bangladesh Bank Governor Dr Atiur Rahman today urged the commercial banks to increase their credit flow in to agriculture sector particularly for setting up commercial dairy farms with bio-gas plants in the rural areas.

A coordinated dairy farm is not only environment-friendly, it also meets three basic demands of farmers- protein, fuel and fertiliser, he said.

The governor was addressing a function at Titli Tala of Jagannathpur upazila while visiting an Agrani Bank financed bio-gas and hybrid baokul and guava cultivation project.

Bangladesh has enormous capacity of establishing around 40 lakh coordinated dairy farms with four cattle in each, he said referring to a recent survey.

He said the dairy farms can yearly produce 480 crore cubic meter bio-gas, 120 million tonnes of high quality organic fertiliser, 1,700 crore liter milk and one million tonnes of meat apart from creating job for around 1.2 crore skilled and non-skilled rural people.

“So, it’s huge opportunity for commercial banks to pursue green business on integrated dairy farm and bio-gas plant,” Dr Atiur said adding that Bangladesh Bank has been trying to make the integrated dairy farm model popular among the people.

The governor said a small dairy farm with four cows and one bio-digester everyday can produce 17 liter milk, 100 kg organic fertiliser and 100 cubic biogas.

Director (news) of Channel-I Shykh Siraj, Managing Director of Agrani Bank Syed Abdul Hamid, government officials and locally distinguished persons spoke, among others, on the occasion.

Referring to the Bangladesh Bank’s Taka 200 crore re-financing scheme for solar power generation and waste management, the governor urged people to take the opportunity.

The governor lauded the Agrani Bank’s financing project for the bio-gas plant and hybrid baokul and guava cultivation in Pabna and said many commercial banks already invested their money for solar power generation.

He urged the commercial banks to invest more in such projects and said it’s very encouraging to see that the commercial banks are providing the farmers with credit for fruit cultivation.

“Such initiative will help farmers for cultivating high value crops, making the country more green and contributing to country’s economy,” said the governor. —BSS

Source: Daily Sun/Bangladesh/ Jan-10-2011

Standard Chartered Bangladesh will organise an exposition in the city to provide an opportunity to its business partners to showcase their products to the customers of the bank.

The exhibition titled ‘Showcasing Lifestyle 2011’ will be held on January 13-15 at Radisson Hotel in the capital.

The event will provide a unique opportunity for the bank’s business partners to exhibit their exclusive products and services, to match the lifestyle needs of the bank’s customers, said Sandeep Bose, head of consumer banking of Standard Chartered Bangladesh.

Exhibitors will include leaders of various industries like real estate, automobile, furniture, electronics and other premium lifestyle products while Standard Chartered will exhibit its range of services.

‘The exclusivity of this event aims to ensure that we are able to cater to the discerning needs of our high value customers,’ Sandeep Bose said.

Depending on the response to this event, the bank plans to organise this exposition every year, he added.

Shanta Properties Limited and Asset Development & Holdings Limited will co-sponsor the event while Rangs Properties Ltd, Urban Design & Development Ltd. (UDDL) and ICON (Orascom) will join are partners.

Source: Daily Sun/Bangladesh/ Jan-09-2011

The operating profit of United Commercial Bank Limited (UCBL) during calendar 2010 surpassed the target set for the year by Taka 1.0 billion to Tk 5.05 billion.

This is a 55 percent growth over the previous year.

The bank earned Tk 3.25 billion as operating profit in 2009 and the target set for the year 2010 was Tk 4.0 billion, according to the bank’s annual report.

The report showed a steady growth in the operating profit of the bank over the last ten years.

The operating profit of UCB in 2001 was recorded at Tk 5.03 billion while the deposit in the same year amounted to Tk 14.245 billion. It stood at Tk 113.19 billion in 2010.

Being in operation for the last 27 years, its number of profit earning branches reached 105 out of the total 107 across the country, the report stated.

This was revealed at a function styled ‘Annual Business Conference 2011’ organised by the bank at a city hotel yesterday.

Chairman of UCB MA Hashem addressed the function as the chief guest.

He called upon the branch managers to continue all out efforts to further accelerate the growth of the bank with highest professioalism.

UCB chairman laid emphasis on expanding small loan products such as SME and retail lending to minimise the defaulting risk which is widely present in cases of big loans.

MA Hashem also asked the senior officials to take initiative for introducing separate merchant banking, brokerage house and Islami banking services to earn more profit.

He expressed his hope that the target of earning Tk 6.50 billion operating profit set for the current year would be exceeded by Tk 8.0 billion.

Vice Chairman Kazi Enamul Hoque, Chair-man of Audit Committee Md Jahangir Alam Khan, Directors Saifuzzaman Chowdhury, MA Sabur, Hajee MA Kalam, Sabbir Ahmed, Sharif Zahir, Sultana Rezia Begum, Tanvir Khan, Nasim Kalam, Bazal Ahmed, Qamrun Nahar and Nurul Islam Chowdhury were also present.

Earlier, Managing Director of UCB M Shahjahan Bhuiyan deli-vered the welcome speech.

The managers of successful branches were also awarded at the function.

Source: Daily Sun/Bangladesh/ Jan-09-2011