B

Weekly Market Review

J u l y 2 3,

379th Issue
Year 8 No. 39

2 0 0 6

FDI: more repatriated than invested in last 5 years Foreign investors have taken out more money than they have pumped into Bangladesh in the last 5 years mainly through profit repatriation and repayment of loans with foreign banks. Out of several hundred foreign investors in the country, a few mobile phone companies dominate the said outflow of capital, followed by oil and gas companies and foreign banks. Since 2001 investors who made total foreign direct investment (FDI) of $2,185m have eventually repatriated $2,744m. FDI records for 1996 to 2005 show the investors remitted $3,626m or 81% of their investment of $4,457m. The data shows that between 1996 and 2000, the country enjoyed a higher rate of FDI inflow with a lower outflow of profit and loan repayment. As per the Board of Investment (BoI), investors in telecommunications sector claim 36% of the total FDI, textiles 18% and chemical industries 7%, oil companies 18%, banks 10%, while power companies claim the rest 2%. The main outflow of money is taking place in the service sector, i.e. telecommunications and energy that does not export any commodity or employ larger manpower. The following table shows inflow-outflow situation for the past 5 years: FDI outflow Year FDI inflow % of outflow of inflow Profit Loan 2001 $355m $175m $188m 102.25% 2002 $328m $195m $243m 133.54% 2003 $350m $355m $229m 166.86% 2004 $460m $338m $372m 154.35% 2005 $692m $418m $208m 90.46% Within the January-May 2006 period, investors had repatriated $180m in profit. Economists suggest that the country must try to increase overall FDI inflow, especially in the manufacturing sector to offset negative impact on the balance of payment. Taka loses strength in FY2005-06 Taka has lost its value against the US dollar by 8.58% during the just-concluded fiscal year, standing at Tk69.73 at the end of June on weighted average basis. The rate was Tk63.75 per dollar at the end of June 2005, down 5.2% from Tk60.43 per dollar of a year back. The exchange rate in FY2005-06 had an excessive depreciation during February-April period before it started appreciating marginally in May. Taka depreciated by 5.24% between July-February period of the last fiscal, but lost 10.75% value against dollar from June 2005 level as demand for the greenback exceeded its supply in the market. Banks also faced some shortage of dollar in the inter-bank foreign exchange market mainly due to higher pressure from inflated import bills and heavy purchase of dollar by the nationalized commercial banks from the market. Payments against import of oil forced the state-owned lenders to become a borrower of dollar instead of a traditional supplier. Maturing liabilities for FY2004-05 oil imports on deferred payment basis, and lower receipts of external development assistance has also caused some imbalance. However, improvement in both supply and demand sides finally eased the pressure on exchange rate.

Bourses experience decline in transactions Country's premier bourse, Dhaka Stock Exchange (DSE) has witnessed a significant decline of transaction both in terms of volume and value in the first half of the year 2006 compared to the previous one. Transaction volume decreased by 53.91%, while value slid by 49.50% during the said period. A total of 247.84m shares and debentures worth Tk19,202m had been traded in 115 trading days during the period, compared to the last years 537.84m shares and debentures worth Tk38,030m. Turnover recorded the highest level was at Tk4,139m in May with daily average of Tk197.09m and the lowest in February with daily average of Tk148m. The market price barometer also registered a downward trend during the period shedding 303.82 points in DSE General Index. The index was 1643.34 points on January 30 this year, but declined to 1339.52 points on June 29 after touching the lowest at 1003.79 points. All Share Price Index in January was 1255.13 points, but declined to 1040.47 points at the end of June. DSE-20 Index, which comprises the blue chip shares, pegged at 1555.42 points in January but fell sharply to close at 1310.86 on June 29, 2006. The index hit the lowest at 1261.70 points in June and highest at 1604.88 points in January. Market capitalization declined by 2.98% during the period. By the end of June, the total market capitalization for all listed securities declined to Tk215,422m from Tk222,046m of the previous year. The financial sector dominated the DSE turnover, accounting for 55% of the total turnover in the first 6 months of 2006 with bank stocks on the top followed by pharmaceutical accounting 10% of the total turnover. Fuel and power, insurance and IT accounted for 7% and 5% respectively. By volume, investment companies took the lead while pharmaceutical, food and textile sector followed the rally. The 4 sectors accounted for 80.21% of total turnover in terms of value, whereas the rest of 12 sectors contributed the rest 19.79%. During the period, a total of 94 companies and mutual funds, out of total 256, have declared cash and stock dividend. The weighted average dividend yield by all the companies and mutual funds declined to 3.41% in June 2006, down by 29.40% from the same period of 2005. Cash dividend status of the companies and funds shows that 10 companies declared more than 50% dividend, 22 declared between 31 to 50%, 24 between 21 to 30% and 11 between 10 to 20%, while 15 declared below 10%. Sector-wise dividend performance on average shows that 9 sectors paid higher dividend up to June 2006 compared to that in the last year, with miscellaneous sector taking the lead, while 6 sectors paid a lower dividend during the year compared to the last one. Some 34 companies in different sector increased their paid up capital up to June 2006 through issuing bonus shares amounting to Tk4,335m, while one company in the banking sector issued right share worth over Tk1,056m. Paid up capital of all listed companies increased by 29.37% to Tk85,893m at the end of June 2006. Presently, 26 government treasury bonds are listed on the DSE with capital worth Tk21,032m. A total of 9 companies with a paid up capital of Tk3,544m have been listed with DSE till June 2006.

ASSET & INVESTMENT MANAGEMENT SERVICES OF BANGLADESH LIMITED Chandrashila SuvastuTower (5th floor), 69/1 Panthapath, Dhaka 1205, Bangladesh Tel : (+88-02) 862 1821-3; Fax : (+88-02) 862 1109; e-mail : aims@aims-bangladesh.com; web: http://www.aims-bangladesh.com

This weeks data runs from 13 July to 20 July 2006 DGEN & DSE20 Movement

Stock Market Movement

This Week DSE General Index Total Turnover, Tk Market Capital, Tk No of Issue Gain* No of Issue Loss* No of Unchanged Issues*

Last Week

+/- %
-0.08 -26.85 0.81

*Issues-gain, Loss Unchanged are reported on Average price basis.

1359.77 1360.84 964,307,961.05 1,318,193,276.90 210,341,510,741 208,654,103,242 95 87 126 127 8

Technical Talk Last week the price indices of Dhaka Stock Exchange (DSE) showed a mixed trend. A large number of Rupali Bank shares were traded in the market, as its price climbed up after the representatives of Saudi Prince arrived in the city to take part in an international bidding for selling it. This week DSE General Index reached at 1359.77, dropped by 1.07 points (0.08%), against 1360.84 in the last week. DSE20 decreased by 13.57 points (1.01%) and reached at 1329.24 against 1334.74. Total turnover decreased by 26.85% and stood at Tk964.30m against the last weeks Tk1318.19m. Market capital rose by 0.8% to close at Tk210.34b ($3.0b). During the week, DSE General Price Index moved above both the 18-day and 9-day moving average line. In other term, RSI reached at 54.63 points against 55.74 points. Turnover Companies
Company Volume Value(000)Tk. % of total

Top Gainers
Weighted avg.Closing Price (Tk)
Company Last Week This Week Change % Turnover,(00 0) tk.

BSC

Eastern Bank Ltd. IFIC Bank Ltd. Lexco Ltd. Apex Foods Ltd. Paper Processing Tallu Spinning Asia Pasific G Ins.

Rupali Bank Ltd. Padma Printers Ltd.

405.50 566.85 3.00 786.60 640.59 44.88 364.34 14.47 79.25 47.72

526.25 707.75 3.50 898.75 712.00 49.50 397.50 15.75 86.50 51.75

29.83 29.00 17.00 14.81 13.28 11.03 10.75 9.88 9.44 9.28

442.23 75,533.99 43.88 8,978.02 27,064.61 405.62 2,574.80 123.38 11.27 1,333.91

DESCO Ltd. Rupali Bank Ltd. Pubali Bank Ltd. Summit Power Ltd. Lafarge Surma Cement AB Bank Ltd. Uttara Bank Ltd. Beximco Pharma Jamuna Bank Ltd. IFIC Bank Ltd.

506,687 103,300 93,855 106,650 113,400 74,496 20,277 612,654 100,619 37,295

131,576 75,534 55,603 38,442 37,679 36,938 36,342 28,341 27,069 27,065

13.54 7.77 5.72 3.96 3.88 3.80 3.74 2.92 2.79 2.79
In million

Top 20 Market Capital

Lafarge Surma Cement Islami Bank BD Ltd Square Pharma Rupali Bank Ltd Eastern Bank Ltd Pubali Bank Ltd Prime Bank Ltd National Bank Ltd Dhaka Bank Ltd Beximco Pharma 19,294 12,697 11,442 9,140 7,478 7,109 6,734 6,036 4,710 4,437 City Bank Ltd. Dutch Bangla Bank Export Import Bank BATBCL Southeast Bank Ltd Bank Asia Ltd Uttara Bank Ltd Mercantile Bank DESCO Ltd Padma Oil Co.

Top Losers
Weighted avg.Closing Price (Tk)
Company Last Week This Week Change % Turnover,(00 0) tk., T

4,251 4,235 4,138 4,026 3,698 3.659 3.579 3,395 3,301 3,185

Peoples Insurance National Life Ins.

Fareast Islami Life Ins.

Shampur Sugar Mills Rahima Food Corp. Alpha Tobacco Ltd. Northern Jute Ltd. Bangla Process Monno Stafllers Ltd. Zeal Bangla Sugar

639.50 1265.96 707.32 14.20 28.29 10.46 23.00 160.00 413.00 19.66

503.75 999.50 595.25 12.20 25.00 9.40 20.70 160.00 413.00 17.70 Last Week

-21.21 -21.01 -15.84 -13.45 -10.50 -10.13 -10.00 -9.38 -9.20 -9.16

20.66 495.01 3,422.80 1,724.29 569.70 4.70 8.28 2.18 37.50 1,546.68 Change %

Recently Listed
Company Subscription Period IPO (M.Tk) 45.00 45.00 514.80 120.00 Private Trading started Placement on DSE on (M.Tk) January 02, 2006 February 06, 2006 April 16, 2006 May 07, 2006

Progressive Life October 08-12, 2005 Insurancde Pragati Life Insurance November 20-24, 2005 Ltd Jamuna Bank Limited February 05-09, 2006 S Alam Cold Rolled February 19-26, 2006 Steels

Exchange Rate
This Week
T.T/O.D BC T.T./O.D BC T.T/O.D 0.04 -0.63 0.09 -0.44 -0.81 -0.17 0.45 0.04 -0.54 0.04 0.04 BC 0.04 -0.63 0.09 -0.44 -0.81 -0.17 0.45 0.04 -0.54 0.04 0.04

Last Initial Public Offering

Company Lanka Bangla Finance Limited Subscription Period August 06-10, 2006 IPO Private Purpose of the issue (M.Tk) Placement (M.Tk.) 90.00 Strenghten the capital base of the business and expansion 110.96 Utilize the fund in lease finance & term financing 45.00 Strenghten the capital base of the insurance and augument business expansion Strenghten the capital base of the business and expansion

USD EUR GBP AUD JPY CHF CAD HKD SGD AED SAR

70.3700 90.0032 130.5364 53.9879 0.6146 57.6520 63.0104 9.0704 45.2395 19.3154 18.9141

70.4000 90.0416 130.5920 54.0109 0.6149 57.6766 63.0372 9.0743 45.2588 19.3237 18.9222

70.3400 90.5698 130.4244 54.2251 0.6196 57.7504 62.7252 9.0669 45.4833 19.3077 18.9066

70.3700 90.6084 130.4801 54.2482 0.6199 57.7750 62.7519 9.0708 45.5027 19.3160 18.9146

Bangladesh August 20-24, Industrial Finance 2006 Co. Limited Prime Islami Life November 26-30, Insurance Limited 2006

Based on Standard Chartered selling rates to public in Taka. Notes: USD-US dollar, GBP-Great Britain Pound, AUD-Australian Dollar, JPY- Japanese Yen, CHF-Swiss Franc, CAD-Canadian Dollar,

HKD-Hong Kong Dollar, SGD-Singapore Dollar, AED-UAE Dirham, SAR-Saudi Riyal.

Industrial September 24-28, 278.00 Promotion & Dev. 2006 Company of Bangladesh Ltd.

ASSET & INVESTMENT MANAGEMENT SERVICES OF BANGLADESH LIMITED Chandrashila SuvastuTower (5th floor), 69/1 Panthopath, Dhaka 1205, Bangladesh Tel : (+88-02) 862 1821-3; Fax : (+88-02) 862 1109; e-mail : aims@aims-bangladesh.com; web: http://www.aims-bangladesh.com