BEXIMCO LIMITED : A MID-TERM INVESTMENT SCOPE

BEXIMCO GROUP OF COMPANIES: CONTROVERSIAL OWNERS , STILL SAFE INVESTMENT OPPORTUNITY

LISTED COMPANIES:

1. BEXIMCO LIMITED.

2. BEXIMCO PHARMACEUTICALS.

3. BEXTEX.

4. BEXIMCO SYNTHETICS.

5. SHINEPUKUR CERAMICS.

6. SONALIASH.

SPONSORS: Salman F Rahman and Sohel F Rahman are the present owners and corner stones of Beximco group, the largest business conglomerate of our country. Salman F Rahman is a very suspicious character in our business culture. He is one of the prime suspects of 1996 share scam and was in jail during last caretaker government. He is the most criticised business character also. In spite of these facts, there are some real opportunities to invest in beximco group companies.

AT THIS MOMENT, OUT OF THEIR SIX LISTED COMPANIES, BEXIMCO LIMITED, BXPHARMA, SHINEPUKUR AND BEXTEX ARE REALY GOOD COMPANIES. IN THIS ARTICLE, I WILL TRY TO DISCUSS PROS AND CONS OF BEXIMCO LIMTED.

BEXIMCO LIMITED: FOR INVESTMENT , NOT FOR TRADING

FUNDAMENTALS:

Paid-up capital: 165.5 crore , Tradeable portion=67%=110 crore

Lot is 100/10, Available lot= 11 lakh

DENOMINATOR	NAV (Restated)	EPS	YEAR END PE	DIVIDEND	NPAT,crore
2010	81	Q2=21.25X2=42.5	PRESENT 7.5		351x2=702
2009	101 (63)	35	14	60%B	325
2008	72 (43)	19	14	50%B+10%C	104
2007	32 (23)	1.5	24	15%B	5.5

EPS is growing continuously over last 4 years in spite of increasing capital, reflecting potential growth of business. Even this year, Q1 is just 6, Q2 is 21.5……………Q4 may be 50 plus, at least it will be 40……….just EPS justifies its price should be 400 with PE 10……………..AT PRESENT THIS IS AN UNDERVALUED SHARE.

NAV is also increasing…………….present NAV is 81…………year end NAV may be 100 plus…….same as last year……..this is basically 60% increase of NAV as they have given 60%B last year………..

Present PE is 7.45………….for any developing country this is an undervalued state for a share. Moreover, company is exponentially growing…………….still expanding its business in Aviation, Hotel and Ceramic sector.

Dividend amount is also very encouraging……..always bonus…………increasing.

NET PROFIT AFTER TAX (NPAT) is also promising. Last year, NPAT was 325 crore, this year half year NPAT is 351 crore…………….ALMOST 100% growth……

FUTURE NEWS PREDICTABLE:

1.  GMG airlines is scheduled to be listed shortly……..BEXIMCO has more than 50% shares in GMG…..They have invested 35 crore for share and another 70 crore for development. If GMG's 10 tk share price goes to 200tk after listing………..BEXIMCO will be gainer of at least 600 crore……their NAV will increase by 40 tk……..

2. Westin hotel: Beximco bought Westin's 1 crore share of 10 tk with 160 crore tk with a premium of 150 tk. Now, Westin's indicative price is 211 tk……..in IPO it will be at least 225………when trading starts it will be at least 300 plus…………..again with a 160 crore investment, they will be gainer of 160 crore…………….increasing BEXIMCO's NAV another 10 tk………….SEC few days back returned Westin's IPo proposal as they wished to float 30 crore tk, but SEC's requirement was 40 crore……….now SEC relaxed its rule…………hopefully Westin IPo approval will be within short time.

3. Dhaka Shanghai ceramic, newly acquired by Beximco………….in exchange of approx.1 crore beximco limited share(10 crore tk )………….later they invested 25 crore tk more for its growth………….BEXIMCO group is planning to merge it with Shinepukur ceramic…………..they will transfer it to shinepukur with equivalent share of shinepukur……………..if they get 1 crore shinepukur share…………with present price of 75 tk …………..1 crore share will be of 75 crore tk…………..beximco will be gainer of 65 crore tk.

4. They are also planning to enter into oil, gas and energy sector.

5. Awami league in power………..Salman F Rahman is a close fellow of Prime minister……..so he will not face any problem………..when he really deserves……..I dont want to mix business with politics............but this is a reality

TECHNICAL ANALYSIS:

1. You can see from graph, over last 8 months its price is moving around 310-320………….with a spike 345………..probably no other company has PE less than 10 (except banks)………….rest all companies are getting over-valued……………people will look to invest in a company with low PE…………..Beximco LTd will be the choice…………

2. Additionally, you can see and assume from graph, all have bought share with 310 plus………no chance to fall its price below 300………even if market crashes, its price will not be effected much, as present PE is only 7.45………….no space remains to fall price…………..

3. All share's price has already been doubled over last 6 months…………..Beximco limited remais same…………..but earning is good…………just waiting for a spark

DRAWBACKS:

1. Realatively large paid-up capital and 67% public holding.

2. Lack of integrity of Salman F Rahman.

INFERENCE:

1. I do not think that price of BEXIMCO LTD will increase to sky within a short time………But I believe it will start its upward journey from November………………..will follow slow and steady growth upto next April 2011………………hopefully 4-10% increase per month………………ultimately will achieve a 40-60% growth over next 6 months…………….

2. BEXIMCO LTD deserves a minimum price of 21.25 x 2 x 10 = 425 tk. (to do justice with its fundamental)

Expected price is 21.25 x 2 x 12 = 510 tk

RECOMMENDATION: Those who are interested for investment for 6 months and will be satisfied with a 40-60% profit in 6 months ( equivalent to 100% in a year), BEXIMCO LIMITED could be a choice for them…………..

Even in the worst situation, if its price does not increase satisfactorily, after next dividend's record date you will get the stock free because a stock with EPS of more than 40, will not remain at 300 tk for long time………………..

IN ANY CASE AT LEAST 40-60% profit will come over 6 months.

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Lanka-Bangla Finance: a fastest growing financial Institution

LANKA BANGLA FINANCE: A COMPREHENSIVE ANALYSIS

OBJECTIVE:

The purpose of this analytical article is to discuss all aspects of lanka bangla finance including fundamentals, technical aspects, sponsors, future projection and prospect. There is no intension to give a buy or sell signal. Only aim is to give investors possible all informations for safe investment.

Fundamental Information:

Paid-up capital: 531 Million BDT

General shareholder: 271 Million BDT

Lot: 500x10; Available lot for trading: 54200

EPS: 15.62 x2 = 31.2

NAV: 68 (after Q2)

PE: 16.28

HISTORICAL DATA:

DIVIDENT: 2009: 15% cash, 20% B

2008: 15% cash, 15% B

2007: 15% cash, 10% B

EPS: 2009: 17, 2008: 10, 2007: 6 (rounded)

PE at year end: 2009: 22; 2008: 22; 2007: 16

NAV: 2009: 39, 2008: 20; 2007: 15

 SPONSORS:

One bank, STS group, Sampath Bank of Srilanka, Gulf financial and owners of Apollo hospitals Dhaka. STS group and Apollo owners are same……genuine professional businessmen……committed for good transparent governance.

ANALYSIS:

1. In the month of January, its price was 307tk…………….grows positively upto record date of year end declaration to 450……..then price adjustment to 350…………stable for one month……………..again started to growing……………..reaching to 520 and last one month in between 500-530.
2. Average of last 3 years, year end PE ratio is 21, let us conservative and take year end PE as 18. PE before record date was 26.
3. Projected year end EPS would be at least 32.
4. Estimated price at December 31, 2010 = 18 x 32= 576
5. Estimated price at next record date= 22 x 32= 700 (approx.)
6. Share price is now at sideways and in reality slightly downwards, but see Bollinger band is almost squeezing and price surge or hike is just waiting…………..no chance that price will fall below 490

 NEWS DESK:

Lanka Bangla securities, a 99.99% owned subsidiary is waiting for listing……..so far I know indicative price is 250, so IPO price may be 280.

They will offload 30 million share. Present NAV of LBS is 30 tk. Profit in each share 250 tk. Total gain will be 250 x 30 million= 7500 million= 750 crore.

Total capital of LBS will be 55+30 crore=85 crore.

So LBF will be direct gainer of (750x55)/85=485 crore. Net gain just from book building (direct) per share of LBF= 485/5.5=88.

When, lank bangla securities will come in market, its minimum price will be 350. So, 55 crore tk share holding (owned by LBF) of lanka bangla securities will be at market value of 1650 crore. Therefore, gain per share would be 300 tk.

Conclusion, when lanka bangla securities will come in market, LBF per share would be gainer of at least 300+88=388tk.

Inference: With present and historical trend of LBF, it can be assumed its price would around 650tk by mid-february.

After enlistment of Lanka bangla securities, its price could be upto 800-900 depending on overall market scenario. And if market condition is favourable, 1000 will not be a dream…………….I believe it will happen before next June.

(Have nice time, good bye for next 10 days, let me know your views)

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FUNDAMENTAL ANALYSIS TO IDENTIFY SAFE PRICE

FUNDAMENTAL ANALYSIS AND PRICE DISCOVERY

PURPOSE:

Main purpose of fundamental analysis is to determine what should be the market price of a share or securities. Therefore, buying a share at this price will not put my capital at risk. Anyway if price falls for any reason, it will regain. For example, to build a thousand square feet flat in Uttara, it costs at least 40 lakh taka (including price of land and minimum 10% profit of builder). So this is a very safe investment. If its price falls below 40 lakh, it will rise again because no one is going to sell in loss for long time.

BASIC FACTORS:

Net asset value, last revaluation and growth of NAV

Earning per share and growth of EPS

Price earning ratio and year end PE over last 3 years

Paid-up capital and share division

Director's profile

Market demand of company's product

Associated business

Assessment of similar companies

NET ASSET VALUE:

It is little bit tricky………..

Mutual fund: straight forward……..price should be very close to disclosed NAV

Banks, NBFI and general insurance: Disclosed NAV and also look when last revaluation was done. You can make a general assumption that 50% of its asset is liquid. Remaining 50% is investment in land, securities, bonds and other strategic investment. From any investment, it is expected that at least 10% return will come. So overall, from its NAV 5% return is usual in a developing economy. If its asset revaluation is done 5 years back, you can add 5 x 5%=25% with its NAV to get actual asset. It is true that devaluation also occurs to certain assets (like motor vehicle, furniture) and all company has to consider that during financial auditing (to maintain standardisation set buy financial auditing rule of Bangladesh). But revaluation cant be done without a assessor and approval from regulators.

Production companies: They usually maintain less cash and almost 90% of their asset remain invested. So, we can add 10% for each year after last evaluation year with NAV.

Example: Square pharma has not reevaluated its asset in last 10 years. Its present disclosed NAV=700. We can easily assume its actual NAV would be at least 700+ 100%=1400. In reality, it has increased much more and increase is compounding. If a revaluation is done, it is possible that square pharma NAV would close to 2000tk.

On the other hand, confidence cement has revaluated its asset this year, so its NAV would be 745 as disclosed.

Inference: a company's market price should be above its NAV and it is usual to be at 1.7 times of NAV in case of any good company.

So, square pharma's present NAV= 660tk, no revaluation done in last 10 years (at least).

So, actual NAV would be at least 1320 at least.

Market price would be 1320 x 1.7= 2224.

On the basis of NAV only square pharma's price upto 2224 tk is safe to buy.

EARNING PER SHARE and PE RATIO:

Earning per share multiplied by 15 is a very safe price for any share.

We should also consider similar types of companies status.

Growth of EPS is crucialy important.

Year end PE ratio is critical. (last 3 years)

Example, Lanka Bangla's last years EPS was 16, this year it could be 31, in 2008 it was 9.8………..almost exponential growth even after stock dividents………………..In last December its price was 288…………on the basis of EPS growth only,.in coming december its price would be(274x31/16= 530)…………….on the basis of absolute value of EPS, price could be 15 x 31=465…………………on the basis of expected year end PE ratio of 20, price could be 20 x 31= 620………………we can make an average (530+465+620)/3=538.

Therefore, Considering EPS factor only, Lanka Bangla's safe price is 538

Inference: considering present trend of EPS increase, we can hope that if we invest in LBF now, in 2011 December we may be able to make our money nearly double…………….just invest , don't worry and wait for a year.

PAID UP CAPITAL

Price of share is dependent on supply and demand theory= simple economic rule.

Two company's with similar fundamental may have different price only due to different paid up capital.

Example, EPS of GP is half of Marico, both are renowned multinational company, so GP's market price should be half of marico= 650/2=325……………in reality price is 250………….because GP has huge paid up capital.

The more important part is tradeable portion of share.

These are basics of fundamental analysis………….other factors are self explanatory

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How to import DSE Data into AmiBroker?

This video tutorial shows how to import DSE daily data into Amibroker. Be remember at first you have to download daily DSEe data by Profita.

N.B: If you have any problem to download daily DSE data, please see Profita Tutorial, Part-1 which shows how to download DSE data.

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Profita Tutorial, Part-2

What is Portfolio?

A portfolio is an appropriate mix or collection of investments held by an institution or an individual.Holding a portfolio is a part of an investment and risk-limiting strategy called diversification. By owning several assets, certain types of risk (in particular specific risk) can be reduced.

What is Portfolio Management?

Portfolio management involves deciding what assets to include in the portfolio, given the goals of the portfolio owner and changing economic conditions. Selection involves deciding what assets to purchase, how many to purchase, when to purchase them, and what assets to divest. These decisions always involve some sort of performance measurement, most typically expected return on the portfolio, and the risk associated with this return (i.e. the standard deviation of the return). Typically the expected return from portfolios of different asset bundles are compared. The unique goals and circumstances of the investor must also be considered. Some investors are more risk averse than others.

Portfolio Management in Profita

You can mamnage your own portfolio in Profita. You can create new portfolio, modify and delete your portfolio. The portfolio management process are show below with figure:

At first you should click on portfolio setting under Portfolio menu, see picture-1 as below:

Picture-1

The following screen will come. Type your name and enter broker house commission (it is varies from broker house to house, some house take 0.40%, someone 50% and some 60%) and click on add button as shows below in picture-2:

Picture-2

Following screen will come and click on exit button to close this screes, as picture-3:

Picture-3

Click on Portfolio Entry under Portfolio menu or press F3 from the keyboard (picture-4).

Picture-4

Portfolio entry form will come. Here you have to put date, Select Buy/Sale from category, Select items from Script, Type Quantity (how many share you buy or sell) and enter you buy/sell price. Be remember select on Calculate brokerage (it will add your buy-sale commission according to your portfolio setting). see picture-5


Picture-5

You can add many buy sale item folow the above system. The Click on Process button. When you have click on process button then your entry will update in profita's protfolio database (see the picture-6).
 

Picture-6

You can add many buy sale item folow the above system. The Click on Process button. When you have click on process button (see picture-7)

Picture-7

Click on Portfolio Viewer under Portfolio menu or press F5 from the keyboard (see picture-8).
 

Picture-8

You have to select your portfolio name from "Select Portfolio Account" button (see picture-9).

Picture-9

After selct your name your portfolio has come (see picture-10)

Picture-10

In this portfolio has two part, fisrt portion has shown Date (tansaction date), Script, Quantity, Buy/Sale, Rate, Break Even (it is very ipmortant, it shown what is your break even point after adding buy and sale commision), Commision, Total Taka, Profit, Balance, Current quantity.

In the second portion are Script, Quantity, Buy Price, Brek Even Point, Last Price, Current Value, Realized, Unreliazed, Result,  Profit (%), Target Price, StopLoss. 

Picture-11

You can find more option here like- Trade Calculator, Print Summery (you can take print of your portfolo summery) and Print Details (you can take details print of yor portfolo).

Details of Trade Calculator:

Trade Calculator, Picture-12

You can find your profit or loss by using this Trade Calcultor. There is one Mini Calcultor also for normal mathematical function like: +,  -, /, * etc. 

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Profita Tutorial, Part-1

Profita is a Share Price and Stock Market Analysis (Technical analysis with various indicators), Portfolio Management and RealTime Trade Monitor software based on Dhaka Stock Exchange (DSE), Bangladesh. This software also updates price from Chittagong Stock Exchange (CSE). You can download this software for free. This software targets those who have no time to go to Broker House or Stock Exchange but want all the information at their fingertips. This software is developed using VB 2008 and it is a freeware. This software shows data only for technical and fundamental analysis. It neither gives any literal Buy or Sell indication nor it provides any rumor.  

Features :

• DSE daily share price.
• Share Price, Trade, Volume, Price Range in last trading day, Price range in selected date range from DSE and CSE in a single table.
• Annualized and Yearly Audited PE, Dividend and NAV data with Declaration Date; AGM, Record Date, Total share, Category and PPS (price position in percentage according to maximum and minimum price in selected date range.)
• You can click on the grid header to sort that column's data. By means of which you can see the top gainers and losers and other comparison like highest or lowest PE, EPS etc.
• Price - Volume Graph of last 2 years.
• You can see the highest and lowest price date.
• Company Fundamental information with Financial Reports and charts (MACD, RSI, CandleStick, ADX, CCI chart etc.)
• Sector and DSE General Index based Financial chart.
• You can select your favourite stocks in main table.
• Search section has criteria like
• DSE News of last 2 years with company, date and category wise search.
• The software has a Dividend calculator which shows minimum price for profit.
• Forthcoming IPO and Other importand notice.
• Show how much share you can buy with your current credit.
• Built in Web Browser with some important link
• CSV File export for Ami Broker.
• Pattern Screener, Weekly Report added.
• You can do virtual trading with new enhanced Trade Calculator.
• Mobile web watch list with offer/bid price of DSE and CSE added.
• Realtime Trade Monitor with complete analysis and porfolio integration
• Price Alarm with real time chart.
• Tick Table an one screen display of DSE and CSE Price.
• Change Fundamental Data Menu can be used to adjust price and volume after FaceValue Change.

• Profita Setup 2.7v

• Download Microsoft .NET Framework 2.0

After download this software you should install this in you computer. Before use it you have to complete registration. registration process are shows below with  screen shot:

Registration Process, picture-1

Registration Process, picture-2

After completing the above form just click on "Apply for online Regisration", now you can use profita.

Do you know how to import DSE data by profita, it is very easy, just see the following scree shot:

Picture-3

Picture-4

After complete this form just cick on "Update" button then necessary update will be complete,  but be remember data update will be available after 4:30pm on each trading day.

Picture-5

Picture-6

When you have click on "Export" button the DSE data will be start to download and following screen comes, be remember it shows downloded path where data wiill be stored, you have to noted it becuase it will be require for further use in Amibroker.

Picture-7

Click on "Ok" button, now DSE data is in your computer with specific location which indicates by big circle.

This is a very good Portfolio management software also. You can manage your portfolio in vary professioanl way with following features:

• Multiple Porfolio Accounts with different brokerage rate.
• Buy, Sale, Deposit, Withdraw and Dividend entry
• Every sale shows profit or loss
• BreakEven of each share
• Specific Buy Sale view with sorting facility
• Print and Edit options are added
• Stoploss calculation and Profit Target is integrated.
• Export and Import facility of portfolio data. (See Porfolio Settings Menu.) 

Second part of Profita will be coming soon about Portfolio management in Profita.

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Technical Analysis of IFIC Bank

IFIC (International Finance and Investment Corporation) Bank shows very good strength in Dhaka Stock Exchange(DSE). It's previous game has just over in last month of June'10. It was increase to 1147 from 787 within 13 days (T+13), gap= 1147-787=360 taka profit which is 45% only in 13 days in that period.

IFIC bank's second game has just start on 28th September at 1143/-, it is now 1258/- gap=115 /- within 4 working days. Yesterday it has been increased 70/- and today is has been increased 25 taka also. This time it also shows very very strong up-trend. Its up-trend may be continuing for next few weeks and it may cross 1500/- within 13 trading days.

Please see the IFIC bank TA graph:

TA chart of IFIC Bank

In above Candlestick chart, green bar indicate the bullish pattern and red bar indicate the bullish bar.  Arrow indicates the buy or sell signal. Candlestick chart is very popular chart for analysis which was developed in Japan

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