IMF for banks' reduced exposure to capital market

The International Monetary Fund (IMF) has recommended amendment to the regulations relating to capital market investment by the banks to minimize risks. According to the IMF banks should not be allowed to invest in the share market more than 25%, in any form, of their total capital. At present a bank is allowed to invest in capital market an amount not in excess of 10% of its total liabilities. The central bank has estimated that if any bank invests 10% of its deposits and if the share price slides by 25% from its purchase price, the bank's capital adequacy ratio will decline by a minimum of 2%. The IMF has also suggested for taking measures to reduce investment in the bank's own subsidiary companies, brokerage houses and merchant banks, to minimize their risk. http://www.thefinancialexpress-bd.com/more.php?news_id=132240&date=2011-04-12

MJL seeks two more weeks to settle listing issue

The state-run fuel company Mobil Jamuna Lubricants (MJL) Monday sought two more weeks from the securities regulator as it failed to be listed within the deadline the regulator fixed earlier. The MJL authorities applied for time extension as both the bourses refused Sunday to accept listing proposal of the company as they think that the shares of the company are overpriced. The company has offered 30% stock dividend in compensation to the general investors. But the bourses observed that such dividend could not change the company fundamentals. MJL has floated 40 million shares with the face value of BDT 10 each at a premium of BDT 142.40 per share. Under the book building system, the offer price of each of MJL shares has been fixed at BDT 152.40. http://www.thefinancialexpress-bd.com/more.php?news_id=132295&date=2011-04-12

Probe report attacks Mobil Jamuna

The probe committee on the stock market debacle has found huge inconsistencies in the profile of Mobil Jamuna Lubricants Bangladesh Ltd. The committee found flaws in the company's value added tax (VAT), income statement, earnings per share, accounts receivable, and purchase. According to the probe report, the company's sales revenue was BDT 1.12 billion in the JanuaryMarch period of 2010 with a 28.66% growth over the same period a year ago, while VAT was BDT 1.36 billion with a 22.48%, showing that these values have not increased by the same proportion during the period. Furthermore, the company intends to raise share capital amounting to BDT 6.09 billion, whereas the net asset value of the company is BDT 2.72 billion. http://www.thedailystar.net/newDesign/news-details.php?nid=181394

BD-Thai Aluminum manipulated share prices: probe report

The panel that investigated the recent stock market crash has cited overpricing of BD-Thai Aluminum shares as a case study of market manipulation. The committee said the company spread price-sensitive information in the market to inflate prices of its shares in collusion with its

issue manager. The first move for the alleged manipulation began in June 2008, when the aluminum panel maker posted a statement on revaluation of its assets. Prices of BD-Thai jumped to BDT 305 each share on July 31from BDT 114 on May 2008, boosted by the filing and the subsequent posting on the revaluation of assets. The share prices of BD-Thai hit BDT 575 on February 11, 2009 after the aluminum producer got approval of issuing 987,000 shares to Gem Global for BDT 375 each through a warrant. GEM Global started selling shares on April 21 at BDT 909.51 each. The investment fund sold 272,000 shares until May 27 of the same year, earning BDT 145 million. http://www.thedailystar.net/newDesign/news-details.php?nid=181395

Bangladesh presses Turkey to lift curbs on fabrics imports

Bangladesh has urged the Turkish government to withdraw proposed measures to restrict imports of fabrics and garment items in order to boost trade between the two countries. Turkey plans to impose a 17% duty on imports of fabrics and ready-made garment products from all least developed countries from July of the year as a measure to protect its own garment industry. Currently, garment exports to Turkey from Bangladesh are duty-free. If Turkey does not change its decision or exempt Bangladesh from paying the levied duty, the targeted trade between Bangladesh and Turkey of $3 billion by 2015 might not be attained. During the July-December period of fiscal 2010-11, Bangladesh exported goods worth $323.35 million and imported goods worth $75.29 million. http://www.thedailystar.net/newDesign/news-details.php?nid=181398

ADB confirms $60m loan for rural roads, markets

The Asian Development Bank (ADB) has confirmed US$60 million loan for Bangladesh to upgrade nearly 800 kilometers of rural roads and some markets in 21 impoverished northwest and southwest districts of the country. ADB said the financial assistance will support the government's Sustainable Rural Infrastructure Improvement Project, which will be implemented in the country's 21 districts. http://www.thefinancialexpress-bd.com/more.php?news_id=132341&date=2011-04-12

World Stock and Commodities

Oil: Light sweet crude futures are down $1.91, or 1.74%, at $108.01 a barrel in Nymex trading. Gold: Gold futures were up $43.60, or 3.05%, at $1,472.50 an ounce. DOW: The Dow Jones Industrial Average closed at 12,381.11 points, up by 1.06 points (+0.01%). Nikkei: Japans Nikkei 225 stock index closed at 9,786.08points.

FTSE: Britains FTSE 100 closed at 6,053.44points, down by 2.31 points (-0.04%). USD 1 = BDT 72.84 EUR 1 = BDT 105.49 INR 1 = BDT 1.64