At Capital Weekly 27 July 2008

27 July 2008 AT CAPITAL RESEARCH
AT Capital Weekly Update

Weekly News Update
Key themes in this issue are:
Bangladesh:
• With the prospects for the global economy remaining negative, political uncertainty in the
run-up to the elections and stretched valuations relative to other equity markets in the
region a defensive stance on the DSE is justified.
• The proposed valuation of USD 3.2bn for the Grameenphone IPO appears at the upper end
of expectations. The key to its success will likely be foreign investor interest.
• Although we have yet to see the move to book building for IPO pricing, if Grameenphone
achieve its price targets then we believe this will encourage other large companies to come
to market in addition to other telcos.
• We believe that a move to book building, that had also been anticipated as a likely part of
the Grameenphone IPO, will yield more effective and transparent price discovery.
• The monitoring mechanism for the regulators needs to be strengthened and the SEC needs
to have its budget, headcount, and IT infrastructure increased substantially.
Global Markets:
• US equity markets ended down by 1.1% last week as the positive news on durable goods,
home sales and soft oil prices failed to offset the ongoing unease about the prospects for
housing.
• Nerves increased given sharply rising foreclosures, further bank failures and the likelihood
of the recessionary pressures intensifying in several European economies.
Asian Tiger Capital Partners
EDITORS
DSE – no bear market for now
Ifty Islam
Managing Partner
ifty.islam@at-capital.com
Syeed Khan
Partner
syeed.khan@at-capital.com
Professor Jahangir Sultan

Senior Advisor
jahangir.sultan@at-capital.com
Asian Tiger
Capital Partners
UTC Building, Level 16

8 Panthapath, Dhaka-1215
Bangladesh
Tel: 8155144, 8110345
Fax: 9118582
www.at-capital.com
Ifty Islam, Managing Partner
publishing research with price targets either for individual

Overview - Bangladesh stocks or for the market as a whole. The monitoring
mechanism for the regulators needs to be strengthened and
A significant week for Bangladeshi equities with three main the SEC needs to have its budget, headcount, and IT
questions for investors: infrastructure increased substantially.
1) Is the 3.5% jump in the DSE reversing the sharp It is fine for Bangladesh to aspire towards greater integration
declines of the previous week a sustainable into global capital markets and increased depth, liquidity and
stabilization in the market? foreign investor participation. But we need greater
2) How significant is the long-awaited IPO acknowledgement of the importance of a better-resourced
announcement by Grameenphone that they will regulator.
issue USD 300mn of their USD 3.2bn estimated
market capitalization? Is it good for the DSE? Will it This was a lesson the largest capital market in the world, the
do well? US, learned not so long ago after the Enron/Worldcom
3) Finally, is the Grameenphone decision likely to act accounting scandals in 2002. The US SEC had their budget
as a catalyst for a significant number of other expanded dramatically. Even that failed to prevent the
privately held companies to come to market? current credit crisis.
Defensive stance on DSE remains justified There is currently an ADB funded project to support the SEC
and we would encourage other multilateral investment in
A combination of broad-based positive statements about the both the SEC’s and the Bangladesh Bank’s market
prospects for the DSE by senior market figures coupled with monitoring capacity.
the announcement of the much-anticipated Grameenphone
IPO announcement underpinned Thursday’s strong 3.5% The debate on the Grameenphone IPO
rebound in the market.
prospects
Table: Number of times DGEN has changed by 2% or more While the knee-jerk market response to the Grameenphone
Change 2003 2004 2005 2006 2007 2008(YTD)
2008(YTD) IPO announcement was positive, the prospects for the issue
are harder to evaluate. On the one hand, there is little doubt
≥+2% 7 15 9 11 17 6 it is the marquee issue that all investors, both domestic and
≤-2% 4 7 12 10 9 6 foreign, have been waiting for. It seems likely that much of
the USD 150mn pre-IPO issue will go to overseas buyers
Total 11 22 21 21 26 12 given the prospective appetite among some for exposure to
Source: Dhaka Stock Exchange & Bloomberg Bangladesh in a liquid stock that has critical mass.
The approx USD 1bn+ implicit valuation of AKTEL on the

Importance of open dialogue/research on basis of the USD 350mn sale of 30% of the issue to NTT
equity market fundamentals Docomo to some extent validates the USD 3.2bn valuation of
Grameenphone given AKTEL’s 7.45mn subscribers versus
From the perspective of Bangladesh moving to a more around 20.31mn for Grameenphone. However, it seems
mature and developed capital market, it is important that pricing, at least on this basis, is on the aggressive side.
investors and market commentators can talk openly about Grameen profits were also down sharply between 2006 and
the negative as well as the positive prospects for both the 2007, albeit partly on the VOIP fines.
market overall as well as individual issues. It is encouraging
that the SEC is pushing brokers and banks to provide greater Telenor Pakistan has a subscriber base of 16.7 million as of
investor education, especially for retail buyers of stocks, so March 2008, compared to Grameenphone's 20.31
they have a greater understanding and awareness of the subscribers as of June 2008. However, Grameenphone
fundamental drivers of the market. employs 4973, whereas Telenor Pakistan employs only
2500. This suggests there remains scope for improved
Stocks can go down as well as up but the key is to provide operation efficiencies that might enhance future earnings
both professional and retail investors with enough
fundamental research to form a balanced and informed The Grameenphone network now covers more than 99% of
judgement about if, how much and in what they choose to the country's population, up from around 50% two years ago.
invest. A strategy of biasing news towards the positive runs Grameenphone has greatly benefited from being part of
risks of social tensions when, as is inevitable, markets Telenor Group's, with its twelve mobile operations worldwide,
correct. Again Pakistan was a recent illustration of that. aggregated purchasing power. This has enabled the
company to rapidly extend its network coverage and upgrade
SEC needs greater investment and resources its network. Group cost-saving initiatives have also allowed
Grameenphone to reduce tariffs substantially, thus making
mobile communication affordable for a wider community in
Clearly the risks of market manipulation, insider trading and
Bangladesh, especially those who have little to spend on
dishonest practices increase with any move towards brokers
_______________________________________________________________________________________
AT Capital Weekly Update 2
communication. Over the years, the shareholders have re- Will Grameenphone act as a catalyst for more
invested nearly all of their earnings to expand coverage and
increase capacity of the network. stocks to come to market?
One of the reasons both the SEC and BTRC have been
pushing Grameenphone to come to market is the belief the
move would act as a catalyst for not only the other Telecom
providers but also other leading privately held companies in
Bangladesh to also list their shares. Although we had
suggested the issue has been aggressively priced, one
encouraging aspect of the valuation decision is that it shows
a greater willingness of the SEC to move away from an asset
or book value based method of assessing the issue price to a
more balanced one that combines a fair assessment of the
growth prospects, market position and goodwill in assessing
how much a company should be sold for. This will almost
certainly encourage more companies to come to market,
especially if there is strong demand for the Grameen phone
issue.
One basis for arguing that the Grameenphone IPO is One of the gripes many private companies in Bangladesh we
attractively priced is the future potential growth in the mobile have talked to in recent months is their complaint that they
market in Bangladesh. In May 2008, there were do not want to sell their assets at undervalued or unfair levels
approximately 42mn mobile subscribers (27% mobile because of previous valuation methods which was reflected
penetration) and 1.1mn fixed line subscribers in the country. in very large jumps in share prices on the first day of trading.
Given the large population of the country and the low This is illustrated in the chart below.
telecom penetration, the growth trend is expected to continue
in the coming years. Chart: IPO performance
performance on First trading day since 2003
Source: BTRC & AT Capital projection
Finally, as the chart below illustrates, the premium to face

value of the Grameen issue is the most aggressive seen in We believe, however, that a move to book building, that had
Bangladeshi IPOs. The key variable remains the appetite of also been anticipated as a likely part of the Grameenphone
foreign investors for the issue as well as the optimism among IPO will yield more effective and transparent price discovery.
local and global investors in terms of the growth prospects We are encouraged that the SEC has announced it will hold
for the Bangladesh Telecoms market. a seminar on book building to take feedback from market
participants on the way forward.
Proposed Grameenphone IPO
We will publish a more detailed analysis on the pros and
Jamuna Bank Limited
cons of the book building process in Bangladesh as well as
Mutual Trust Bank Limited
lessons from other IPO mechanisms in the region in the next
Export-Import (EXIM) Bank Limited
issue of the AT Capital Weekly.
Summit Power Limited
Trust Bank Limited
BRAC Bank Limited
IPDC
DBH
ILFSL
Berger Paints Bangladesh Limited
0% 600% 1200% 1800%
Premium as % of Face value

_______________________________________________________________________________________
And Finally... Bullish on Telecoms?
_______________________________________________________________________________________
There were some rare glimmers of optimism for the US
Global Markets economy on Friday as durable goods rose 0.8% headline
and 2% ex transports versus consensus estimates of a
Remain Bearish on Global Equities and the decline of 0.3% and 0.2% ex transports. Leading the gains
was an increase in orders for electrical equipment,
US Dollar; Oil still at risk machinery, vehicles and parts, primary and fabricated
metals.
US equity markets ended down by 1.1% last week as the
positive news on durable goods, home sales and soft oil
prices failed to offset the ongoing unease about the ...but jump in US foreclosures argue further
prospects for housing in light of sharply rising foreclosures, down pressure on housing
further bank failures and the likelihood of the recessionary
pressures intensifying in several European economies such But the bigger news was the latest RealtyTrac foreclosure
as the UK, Ireland, Spain and Germany. The easing off of oil data: Almost 740,000 properties were in some stage of the
prices will come as a welcome relief to Asian central banks foreclosure process, the most since they began tracking this
facing sharply increasing inflationary pressures. But the data in January 2005. That represents one in every 171 U.S.
prospects for a lagged wage-price spiral still argues for homeowners that either 1) lost their house to foreclosure; 2)
upwards pressure on interest rates in the region. received a default notice or 3) was warned of a pending
auction. This is an increase of 121% from a year earlier, and
We remain bearish on global equities, see further USD is a 14% rise quarter over quarter. Falling home values have
weakness and also more downside on oil prices as weak US prompted RealtyTrac to almost double the projected number
growth becomes the dominant driver of commodity trends of foreclosures this year to about 2.5 million.
and speculative flows become less significant. The USD
3.2bn bankruptcy of US Oil trading house Semtech as well It has been estimated that 25 million U.S. homeowners might
as the worst month for Macro hedge funds in 2008 also soon be underwater -- risk owing more than the value of their
argues for greater caution in risk-taking in commodity homes. That would make it nearly impossible to negotiate
markets by leveraged players. better loan terms or sell their property without some
additional cash contribution.
As the chart below illustrates the number of properties with

some sort of foreclosure action against them (default notice,
auction notice, bank repossession) has risen for the past
eight consecutive quarters.
US Durable Goods Jump Higher
US Housing Legislation Bill Passed by

Congress awaiting Bush’s Signature
The US Congress passed important legislation that takes

several approaches to curing the slumping housing market. It
aims to spare an estimated 400,000 debt-strapped
homeowners, many of whom owe more than their houses are
worth, from foreclosure by allowing them to get more
affordable mortgages backed by the Federal Housing
Administration.
The FHA could insure USD 300bn in such mortgages, which

would be available to homeowners who showed they could
_______________________________________________________________________________________
afford a new loan. Banks would first have to agree to take a SemGroup creditors said this week they had little idea of the
large loss on the existing loans in exchange for avoiding an extent of the firm's losses and were surprised by the much
often-costly foreclosure. larger than expected size of the hedging program. Moody’s
Ratings Agency suggested that due to the larger than
The plan also is designed to relieve a broader credit crunch expected hedging losses, SemGroup creditors will likely
that has taken hold because of rising defaults and falling recover only half of the more than $7 billion they are owed.
home values. To free up safer and more affordable mortgage It seems likely that this bankruptcy will reduce the amount of
credit, the bill permanently would increase to $625,000, the speculative capital in the commodities market.
size of home loans that Fannie Mae and Freddie Mac can
buy and the FHA can insure. They also could buy and back Added to this was news that Hedge funds are having their
mortgages 15 percent higher than the median home price in worst month in eight years after popular bets against banks
certain areas. and in favour of rising commodity prices went badly wrong.
Hedge Fund Research's daily index said hedge funds were
The measure tries to prevent blight in areas hardest hit by down 2.77% for the month to Wednesday. If that is sustained
the housing crisis, where waves of foreclosures have left to the end of the month, it will make July the worst since the
properties sitting abandoned, dragging down property values dotcom bubble burst in April 2000. Many hedge funds have
and ruining neighborhoods. It sends USD 3.9bn to such been betting that bank stocks would fall further as the credit
neighborhoods to buy and fix up foreclosed properties. It crunch continued to bite, and that oil and other commodity
goes far beyond addressing the current crisis, however. The prices would keep rising - a trade which generated big profits
legislation overhauls the Depression-era FHA. It requires this year, helping offset losses in other areas.
lenders to show how high a borrower's payment could get
under the terms of his mortgage. It provides USD 180mn in But over the past fortnight the trade has been hit by one of
pre-foreclosure counseling for struggling homeowners. the most vicious falls in commodity prices on record and a
leap in financial stocks. Clearly, the renewed slump at the
The Treasury Department gains unlimited power, until the end of last week in financial stocks will have reversed some
end of 2009, to lend money to Fannie Mae and Freddie Mac of the declines. Nonetheless, one can expect reduced risk
or buy their stock should they need it. The Federal Reserve appetite from hedge funds, especially in commodity space.
takes on a new "consultative" role overseeing the
companies.
The measure includes USD 15bn in tax cuts, including a

significant expansion of the low-income housing tax credit
and a credit of up to USD 7,500 for first-time home buyers for
houses purchased between April 9, 2008, and July 1, 2009.
Semtech bankrupt with USD 3.2bn of losses;

hedge funds suffer in July
US oil trading firm Semtech became the latest victim of the

wild swings in oil prices and the sharp pullback seen in the
last few weeks. Semtech filed for bankruptcy last Tuesday
after suffering USD 3.2bn in losses on energy futures and
derivatives trades that SemGroup says were designed to
protect its physical oil trading business.
_______________________________________________________________________________________
Ifty Islam, Managing Partner
Also, four Islamic insurance companies (Islamic Insurance

Special Focus
ocus Bangladesh Limited, Islamic Commercial Insurance Limited,
Takaful Insurance Company Limited, and Far East Islamic
The Growth Prospects for Islamic Banking in Life Insurance Company Limited) are functioning as Islamic
Bangladesh and the Role of Private Equity financial institutions in Bangladesh.
Global growth in Islamic finance remains strong
The Islamic Banking sector continues to grow globally at a

rapid pace. In a report, earlier this year, US investment bank,
Morgan Stanley (2008), highlighted that the 22 Islamic banks
in the Gulf have in excess of USD 300bn of Shariah-
compliant assets and are set for double-digit growth over the
next ten years.
They noted that there are a number of reasons why the

sector is growing, and will continue to grow, strongly. A
buoyant macro economic backdrop in the Middle East and
increased infrastructure spending, and continued
diversification from oil economies are driving the banking
sector generally. Especially noteworthy was their observation
that 'In terms of factors behind the growth in Islamic finance,
a greater focus on Islamic identity, government backing for
the development and promotion of Islamic banking, low What is Islamic Banking?
penetration, competition among conventional banks makes
Islamic banking more attractive and more favourable industry The Organization of Islamic Conference (OIC) defined an
dynamics are all likely to fuel the growth.' The report Islamic bank as “a financial institution whose statutes, rules
suggests that, while the outlook for the sector remains and procedures expressly state its commitment to the
strong, there are a number of potential hurdles to growth. principles of Islamic Shariah and to the banning of the receipt
Most Islamic banks lack scale, products are complex, there is and payment of interest on any of its operations.” The
no single regulatory body, there are operational limitations, payment of “Reba” or unfair interest for the cost of lending
such as not being allowed to hedge, and there is often less money without a sharing of financial risks is prohibited.
transparency and financial disclosure than conventional
banks. However, despite these potential setbacks, the The following explanation draws heavily on Alam (1994). In
underlying growth drivers will likely more than offset these terms of the specific evolution of Islamic Banking, on the
structural impediments. liabilities side, banks have both deposit accounts that pay
money back instantly but without any profit share and
South Asia alone has 47 Islamic banks accounting for nearly savings accounts that Islamic banks accept saving deposits
a quarter of total assets and a third of the deposits of the 144 from customers under Al-Wadia and Al-Mudaraba Shariah
Islamic banks in the world. Apart from the 47 units in South principles. The word Al-Wadia means ‘Trusteeship’. In this
Asia, 22 in the Middle East, 17 in the six-nation Gulf case the bank acts as a trustee for its customers.
Cooperation Council (GCC), and four in Europe and North
America (Source: International Association of Islamic Banks). The word ‘Al-Mudaraba’ originates from the word ‘Mudarib’
and means ‘The Manager’ of the fund. The bank in this case
The Islamic Financial Services Board are even more acts as a manager of customers’ funds. The depositors on
optimistic in their outlook for the growth of the global Islamic the other hand are known as ‘Sahib-Al-Mal’ meaning the
banking industry. They forecast that total asset value will owner of the fund. Deposits accepted on savings under the
expand to $ 2.8 trillion in 2015 compared to $ 1.4 trillion in profit and loss sharing agreement are invested by the bank
2010. on its own risk. Customers give authorization to the bank to
invest funds and share profit or loss on agreed proportions.
Bangladesh’s Islamic Banking Industry Account holders of this type of account are required to
maintain a minimum balance in the account. Further to the
The six Islamic banks operating in the private sector in this above, Islamic banks accept deposits from customers under
country are Islami Bank Bangladesh, ICB Islamic Bank, Al- an investment account on a profit and loss sharing basis.
Arafah Islami Bank, Social Investment Bank, Exim Bank, and The saving account of such a nature in an interest-free
Shahjalal Bank. In addition to these Islamic banks, a number banking system is also known as a participatory account or a
of other private banks (Prime Bank and Dhaka Bank, profit or loss sharing (PLS) account. Depositors of this type
Jamuna Bank, Southeast Bank, City Bank, Arab Bangladesh of account receive share of profits at the agreed ratio from
Bank and Premier Bank) and foreign commercial banks their funds invested by the bank. The profit and loss sharing
(Standard Chartered and HSBC) have Islamic banking wings also depends on the total amount deposited and the length of
to deal with the Islamic banking business parallel to their period the money is held by the bank. Depositors in an
conventional interest-based banking operations. investment account are required to give prior notice to the
bank if they withdraw their invested funds under any special
_______________________________________________________________________________________
circumstance. In such a case no share of profit is given for called a lessee who wants to use the assets and pays rent.
the amount withdrawn. Based on Shariah principals, two The leasing agreement is based on profit sharing in which
fundamental techniques or modes of investment are the bank buys the movable or immovable property and
advocated under Islamic Shariah principles: leases it to its clients for an agreed sum by installments and
- Mudaraba (Capital Financing) for a limited period of time into a saving account held with the
- Musharaka (Partnership) same bank. These installments are invested in Mudaraba
investments (Venture) for the customer’s account. The
Mudaraba (Capital Financing) accumulated profit generated from the payments, and the
payments themselves are invested in the bank’s investment
Capital Trust financing is a contract between at least two ventures over the time period of the lease, contributing to the
parties in which the bank as the investor supplies the entire eventual purchase of the leased assets. According to the
capital of the business forming a relationship between the Western leasing system the lessee pays specific rentals and
supplier of capital and the user of capital. These two parties a fixed rate of interest over a given period for the use of
work together and share profits and losses. Under specific assets. But in the Islamic banking system of leasing,
‘Murabaha’ financing the investor is known as ‘Rab-Al-Mal’ the risk related to leasing has to be shared between the bank
which means the owner of the property and the entrepreneur and the lessee, in case of any damage to the leased assets.
is called ‘Mudarab’, meaning the manager of capital. When The contract is called ‘ijara-wa-iqtina’ i.e. leasing purchase,
the venture ends, the manager of capital (i.e. the when the ownership of the assets is transferred to the clients
entrepreneur) returns the entire capital to the bank, along after the completion of the leasing contract.
with an agreed proportion of profit. If there is any loss, it is
borne by the bank. The main advantage with this type of How does Islamic Banking differ from Conventional Banking?
partnership is that it combines the efforts of participants and
their skills with the capital, which contribute greatly towards As Haniffa and Hudaib (2007) have noted, there are five
development activities in a society and also assists to solve distinctive features that differentiate Islamic Banks (IBs) from
unemployment problems by utilizing manpower resources in their competitors (conventional banks): (a) underlying
a productive way. philosophy and values; (b) provision of interest-free products
and services; (c) restriction to deals acceptable under Islamic
Musharaka (Partnership) principles; (d) focus on developmental and social goals; and
(e) subject to additional reviews by the Shariah Supervisory
The word ‘Musharaka’ means a profit sharing joint venture, Board (SSB).
designed for limited production or commercial activities of a
long duration. In this case the bank and the customer Islamic banking is much more than offering interest-free
contribute capital jointly. They also contribute managerial products. IBs should only finance projects or support
expertise and other essential services at agreed proportions. practices and products that are permissible (halal) and avoid
Profit or losses are shared according to the contract agreed financing or investing in activities considered abhorrent in
upon. An individual partner does not become liable for the Islam, such as gambling, alcohol, drugs, etc., or in short,
losses caused by others. those that bring harm to society and the environment. IBs
must also avoid speculative transactions or excessive risks
In addition to the above two financial arrangements, Islamic (gharar), such as investments in futures markets, since the
Banks currently in existence are also engaging in or actively consequence is not known.
considering several other financial practices usually
acceptable in Islamic Law. These are: As Hassan has noted “Under the Islamic system, banking
operations will undoubtedly be more varied and complex, as
· Murabaha (Mark-up or Cost-Plus-based Financing) compared to the traditional banking system. The criterion of
· Ijara (Leasing) and creditworthiness of the borrower that underlies the
· Quard- E- Hasan (Interest-Free Loan) conventional banking system will have to be changed to
place more emphasis on viability and profitability of the
Murabaha (Cost plus profit) specific project being proposed.” He notes that in addition to
term structure of rates of return, there will be structures of
The word ‘Murabaha’’ means a cost-plus profit contract. In returns for different economic activities that banks have to
this system of financing the bank agrees to purchase for a consider. Project evaluation and appraisal, determination of
client who will then reimburse the bank in a stated time profit sharing ratios, and the establishment of a procedural
period at an agreed profit margin. The mark-up price that the frame work for the processing, monitoring, supervision, and
bank and the buyer agree to is mainly based on the market auditing of various projects will create new demands on
price of the commodity. Thus the bank earns a profit without commercial banks. On the liability side, banks would have to
bearing any risk. attract depositors on the basis of profits and dividends, rather
than through interest rates. In short, commercial banks in an
Ijara (Leasing) Islamic system would have to be transformed into institutions
that would closely resemble investment banks in western
The word ‘Ijara’’ refers to leasing. The leasing purchase is financial systems.
another technique followed by Islamic banks in financing
customers. This system is almost similar to the leasing Islamic Funds and Socially Responsible Investing
activity provided in traditional banking. Leasing is a contract
between the bank and the customer to use particular assets. There has been a dramatic growth in ethical and socially
responsible investing. As of 2007 some estimates suggest
In this case the bank is called a lessor and the customer is that about one out of every nine dollars under professional
_______________________________________________________________________________________
management in the United States is involved in socially even for large businesses but especially so for Small and
responsible investing—11 percent of the $25.1 trillion in total Medium Sized Enterprises (SMEs). A greater shift away from
assets under management tracked in Nelson Information’s conventional interest based lending to Islamic Financing is
Directory of Investment Managers. Research estimates by likely to be a powerful engine of growth. Private Equity and
financial consultancy Celent predict that the SRI market in Venture Capital investing, whereby the financing institution
the US will reach USD 3 trillion by 2011. The European SRI takes both equity and provides strategic advice to
market grew from EUR 1 trillion in 2005 to EUR 1.6 trillion in businesses, shares both risks and rewards between the
2007. borrower and the lender and is completely in tune with
Shariah compliant lending is clearly a subset of socially Shariah-based lending. So the evolution of the Private Equity
responsible or ethical investing. However, it is important that Industry in Bangladesh will go hand-in-hand with expanding
this message is more effectively communicated so that those the capabilities of genuine Islamic based financing.
investors who want to support ethical investing see the
consistency with Islamic based lending. The greater encouragement of PE funds like AT Capital,
Brummer and LR Global that have recently come to
Islamic Banking Regulatory Framework needed Bangladesh is a positive development in developing the skills
and capacity to manage Islamic investments in businesses.
As Ahmad and Hassan (2007) have noted in a recent article, This can clearly be extended and leveraged by Islamic Banks
unlike Bangladesh, in most Muslim countries a special law is to help them develop their own risk management and
passed prior to the establishment of an Islamic bank that corporate strategy systems to move away from “cost-plus”
specifies the rules and regulations for the institution willing to (Murabaha) and leasing (Ijara) to one that one might argue is
engage in banking businesses based on Islamic principles. a more “genuine” or Shariah consistent form of lending
In Malaysia, for example, the Islamic Banking Act 1983 was based on partnership (Musharaka).
passed by Parliament prior to the establishment of the Bank
Islam Malaysia Berhad in 1983, with this law applying to any Bangladesh can also export Islamic Banking products to
form of Islamic banking. For institutions wishing to operate in other Muslim countries around the world. Malaysia has been
Bangladesh, there is no separate Islamic banking act or any extremely effective in leveraging its place as a major Islamic
specific laws or independent regulations that control, guide, banking centre with leading research institutes and the
and supervise the functions of Islamic banks. However, there development of Islamic inter-bank money market as well as
have been some positive developments including the research institutes. Bahrain has developed a similar role in
decision of Bangladesh Bank to set up an Islamic economics the Middle East. There is no reason why Bangladesh, the
division under the Department of Research of Bangladesh third largest Muslim country in the world after Indonesia and
Bank. Another development is the special provision that has Pakistan, cannot also grow its global competitiveness in this
been made by Bangladesh Bank for the Statutory Liquidity area. The development of a globally competitive Islamic
Reserve (SLR) requirement of Islamic banks. Bangladesh Banking software product by local IT House Millenium that
Bank, as the lender of last resort, may place funds in has been attracting attention in Malaysia and the Middle East
Mudarabah accounts with Islamic banks and share profit in is a pointer to how Bangladesh can position itself in the
line with the principles of the distribution of profits to global Islamic Banking Market.
Mudarabah depositors.
As Bangladesh’s capabilities in this sector expand, there is
Conclusions – Challenges and Opportunities for no reason why it should not be well placed to benefit from
Bangladesh’s Islamic Banking Industry excess capital in Middle Eastern based Islamic Funds. Given
where oil prices are, the rapid growth in this potential source
As Ahmad and Hassan have noted “The future of Islamic of development capital for EM countries like Bangladesh is
banks hinges on their ability to find a viable alternative to unlikely to reverse any time soon. In conclusion, encouraging
interest for financing all types of loans.” Islamic banks need the growth of the Islamic Banking Industry in Bangladesh has
to improve their managerial capabilities by training their broader economic attractions as well.
personnel in project appraisal, monitoring, evaluation, and
performance auditing. The future of Islamic banks in References
Bangladesh also depends on developing and introducing
Mohammed Nurul Alam, “Islamic Banking In Bangladesh: A Case
practices such as accounting standards that provide timely Study of IBBL”, International Journal of Islamic Financial Services,
and reliable information of the type that the Islamic banks Vol 1, No. 4
would require for profit sharing, rent sharing, or cost-plus
financing. These standards are yet to be developed. Ahmad and Hassan,
Hassan “Regulation and Performance of Islamic
Banking in Bangladesh”, Thunderbird International Business Review,
Vol. 49(2) 251–277 • March–April 2007
As far back as 1989, the World Development Report from the
World Bank noted that: “Islamic banks offer savers risky Marwa A Elsheikh,
Elsheikh “MENA Islamic Banks - Structural Growth Story”,
open-ended mutual fund certificates instead of fixed-interest Morgan Stanley, 2008
deposits. (This is not unlike cooperative banks in the west, M. Kabir Hassan,
Hassan “Islamic Banking in Theory and in Practice: The
where deposits earn variable interest and double as equity.) Experience of Bangladesh” Managerial Finance, Volume 25
Difficulties arise on the lending side. Arrangements to share
profits and losses lead to considerable problems of Haniffa and Hudaib,
Hudaib “Exploring the Ethical Identity of Islamic Banks
monitoring and control, especially in lending to small via Communication in Annual Reports”, Journal of Business Ethics
(2007)
business”.
In terms of opportunities, Bangladesh is clearly an economy

that suffers from a lack of access to risk capital. This is true
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Stock Market Weekly
DSE Performance: 52 Weeks Market News
• Margin lending limits relaxed

• Grameenphone plans to raise USD 300mn from IPO and
private placement
• SEC changes in mutual fund rules; Small investors’
protest
• Brokerage houses need permission for new branches
• DSE announces listed companies should submit
financials every three months
• UCB share trading resumes, tops the turnover list on the
that day
• SEC asks merchant banks to play due role
• Trading of ICB AMCL Second NRB Mutual Fund shares
begin Sunday
DSE Performance: 30 Days Return of regional indices last week
Market Summary Valuation snapshot
DSE General Sector P/E

Index Performance DSE 20
Index Feb-08 Mar-08 Apr-08 May-08
Opening of this week 2,889.4 2,602.2 Banks 24.8 21.9 22.2 22.6
Closing of this week 2,878.1 2,636.1 Cement 12.8 14.7 14.7 17.6
Change within a week (%) -0.4% 1.3% Ceramic 28.1 43.2 43.7 42.7
Change within a week (Point) -11.3 34.0 Engineering 30.2 33.7 38.9 41.4
Food & Allied 22 24.5 28.2 28.5
Fuel & Power 28.1 28.3 25.8 26.2
This Last %
Capitalization and Turnover Insurance 22.1 23 28.1 32.4
Week Week Change
Investment 22.4 40.5 64.9 65.2
Number of Trading Days 5 5
IT 16.6 18.3 18.4 17.6
Market Capitalization (USD bn) 14.12 14.16 -0.2%
Jute 8.8 18.6 16.4 16
Total Turnover (USD mn) 242 203 19.1%
Miscellaneous 20.1 22.3 23 25.9
Daily Avg. Turnover (USD mn) 48 41 19.1%
Paper & Printing 6.9 11 9.2 9.5
Total Volume (mn) 109 94 15.5%
Pharmaceuticals 20.2 25 26.7 29.8
Daily Avg. Volume (mn) 22 19 15.5%
Service & Real Estate 8.8 10.8 20.5 19.5
Tannery 15.3 19.9 25.1 23.1
This Last
Weighted Avg. P/E Ratio* Issues Textiles 11.8 14.6 14.9 14.4
Week Week
Source: Dhaka Stock Exchange
This Week 22.14 Advanced 94 75
Last Week 23.00 Declined 151 170
% Change -3.7% Unchanged 4 6
*Weighted on Market Cap. Not Traded 37 35
_______________________________________________________________________________________
Weekly Stock Market Commentary
days, as bid prices were lower than the lower limit of the
The market started the week in similar vain to the prior week, circuit breaker. Finally, trading resumed with only one trade.
falling in the first few days on trading, after it rebounded by The price fell by 7.5%.
the weekend, buoyed by regulators encouraging investment
by loosening lending. However sentiment remains fragile, Mutual fund shares experienced very high volatility during
following concerns as to whether the Bangladesh market the week. The SEC formalized their earlier decision not to
would emulate regional performance in the last few months, allow the mutual funds to issue right and bonus shares. The
with India, Vietnam and, most recently, Pakistan falling mutual funds shares fell sharply earlier in the week but
sharply. gained some ground later.
The bearish trend which started in the previous week With half yearly results season well underway, AB Bank
continued till Tuesday when the benchmark DGEN index fell released results, seemingly below market expectations, with
to 2,765, down 8.4% since the beginning of the year and a 70% rise in net profits and a subsequent 7.5% share price
16% lower than the recent peak in May this year. The market decline following announcement. ACI fell 0.2%, after
broke from its seven-day losing streak with a modest gain on announcing a 51% increase in net profit while BRAC Bank
Wednesday. The benchmark DGEN gained 3.8%, the was up 5.25% after reporting a 97% increase in net profit.
second highest one-day gain in the year on Thursday, ended
the week at 2,878. The market has been experiencing high An interesting week - cynics may say that lending
intraday volatility. interventions have artificially supported the market injecting
further risk through leverage, while pragmatists feel this has
With concerns mounting over the recent falls, the SEC helped steady irrational retail nerves. Time will tell, but we
convened a meeting with other major stakeholders including continue to watch in anticipation.
both stock exchanges, merchant bankers and leading
brokerage houses. Officials placated investors and merchant
banks by increasing margin lending limits.
On Wednesday, market sentiment was bolstered when the

country’s largest telco, Grameenphone announced it would
raise USD 150 million from pre IPO placements and an
additional USD 150 million from an IPO. The USD 300mn
capital raising represents, just under 10% of its USD 3.2bn
proposed valuation. The IPO is expected to be 5 times as
large as the ongoing Titas IPO, the country’s largest to date.
Investors’ response to the Titas IPO remains subdued with
only 1% of shares being taken up since its market debut on 2
July.
The Social investment Bank, a Shariah-based bank, has

decided to raise BDT 1.1bn (USD 16mn) from its existing
shareholders through a right issue. Using the same route, Stock Market News
BRAC bank is raising BDT 1.2 billion (USD 17.5 million) and
Trust bank will shortly raise BDT 513 million (USD 7.2 GP plans to raise USD 300mn from IPO and private
million). With impending Basel II capital adequacy placement
compliance on the horizon, Tier II capital raising is yet to The Daily Star, Thursday, July 24, 2008
become popular among many banks, with many opting to
strengthen Tier 1 capital ratios in the short-term. Almost all of Grameenphone, the country's largest mobile phone operator,
them are issuing bonus shares (instead of giving cash has finalised its plans to raise USD 300mn (BDT 20.58bn) --
dividends) to support their 20% plus credit growth. USD 150mn from the stock market and the rest through
private placement or pre-IPO.
Square Pharmaceutical, DSE’s largest company by market
cap, declared their results for year ended March 31, 2008. According to sources, the number one mobile phone
The company's profit growth of 5% and declaration of 35% company took the decision after revising its valuation to USD
bonus shares did not meet the expectation of the investors. 3.2bn last month. Earlier an independent firm valued the
Its shares lost 17% in two trading days since declaration company at USD 3.75bn.
before rebounding modestly by week close.
Grameenphone yesterday said a formal application for the
Islami Bank, DSE’s fourth largest company by market cap, IPO with expected gross proceeds of up to USD 150mn is
saw a rise of 23%, the maximum permitted under the current expected to be filed with the Securities and Exchange
DSE circuit breaker, following bank's decision to split the Commission (SEC) and other authorities by the end of this
shares 1:10, before it fell back slightly in the latter half of the month. The company also said it intends to conduct a pre-
week. public offer of its shares with expected gross proceeds of up
to USD 150mn. Sources said Grameenphone will offer each
The trading of the state owned bank, Rupali Bank, another share at BDT 18 (USD 0.26) which represents a premium of
large cap stock, was supposed to recommence on Sunday. BDT 17 (USD 0.24) over the BDT 1 face value of the share.
But no trading took place on the DSE in first four trading
_______________________________________________________________________________________
Proceeds of the offering will be used for the company’s times and the NRB allocation of 6mn shares was
network development programme. oversubscribed by six times.
http://www.thedailystar.net/story.php?nid=47143 At a board meeting at the Dhaka Stock Exchange, it was

resolved that mutual funds would have to declare their net
SEC okays changes in mutual fund rules; Small investors’ asset value (NAV) positions every week. Currently, mutual
protest funds declare their NAV once every month.
The Daily Star, Wednesday, July 23, 2008
It was also announced that listed companies would have to
The Securities and Exchange Commission (‘SEC’) has submit their financial accounts to both bourses and the SEC
approved the proposed changes in Mutual Fund rules once every quarter as well as the current half year and
whereby no close-end mutual fund can offer bonus shares as annual reporting regime.
dividends or offer rights issues in a bid to increase their
capital base. http://www.thefinancialexpress-
bd.info/search_index.php?page=detail_news&news_id=40618
Mutual Funds will also not be able to issue pre-emptive rights
shares or placement shares to the existing unit holders. Pre- DSE proposes
proposes to submit financials in every three months for
emptive rights or placement of shares is the sale of a security listed companies
to selected investors rather than offering the security to the The Daily Star, Monday, July 21, 2008
public through a group of dealers.
The Dhaka Stock Exchange has proposed to make it
Before finalising the new rules, the SEC published the mandatory for listed companies to submit quarterly financial
proposed changes in newspapers for public opinions in June statements in an attempt to improve disclosure and reporting.
2008, after which shares in the mutual fund sector witnessed Presently, listed companies are required to report half year
significant falls. This led to many retail investors taking to the and full year results.
streets to protest against the proposed changes.
The DSE also proposed that Mutual Fund managers report
http://www.thedailystar.net/story.php?nid=46981 net asset values and portfolio positions every week. At
present, they report on a monthly basis.
Brokerage houses need permission for new branches
The Daily Star, Wednesday, July 23, 2008 http://www.thedailystar.net/story.php?nid=46667
The Securities and Exchange Commission (‘SEC’) has SEC asks merchant banks to play due role
announced that brokerage houses will now need to take The Daily Star, Friday, July 25, 2008
permission to open new branch offices, to bring branches
under a uniform framework. The SEC has requested merchant banks and brokerage
houses to play their role in ensuring market stability.
“The main objective of the move is to bring the branch offices
of any brokerage house under a policy frame work,” SEC "The merchant banks and brokerage houses should advise
Executive Director Farhad Ahmed said after the meeting. He the investors on the fundamentals of the stocks so that the
added, any brokerage house with BDT 7.5mn (USD 0.11mn) market does not behave abnormally," a joint meeting held in
of paid up capital will be allowed to open a maximum of 15 the SEC was told on the day.
branch offices.
The regulator, bourses and merchant banks also agreed to
Before applying for the SEC's permission to open branch arrange programmes twice a month to create awareness
offices, the brokerage houses will need to provide a among investors to make investment decisions based on
recommendation from the Dhaka Stock Exchange (DSE) company fundamentals.
authorities. The brokerage houses will have to regularise
branch offices that are already in existence by obtaining http://www.thefinancialexpress-
permission from the SEC to continue branch operations bd.info/search_index.php?page=detail_news&news_id=40705
within the next four months.
UCB share trading resumes, tops the turnover list
http://www.thedailystar.net/story.php?nid=46985 The Financial Express, Tuesday, July 22, 2008
Trading of ICB AMCL Second NRB Mutual Fund shares Share trading in the United Commercial Bank (UCB) Limited
begin Sunday resumed on Monday following a suspension of nearly 6
The Financial Express, Thursday, July 24, 2008 weeks, following significant price volatility before its
proposed AGM. The SEC lifted the ban after considering
Trading of the ICB AMCL Second NRB Mutual Fund, a close- investors interests, while the Bangladesh Bank has asked
end fund, will commence on both stock exchanges on the company to hold its AGM by this October.
Sunday, July 27. The ICB AMCL Second NRB Mutual Fund
is the country’s largest Mutual Fund IPO ever with value of
BDT 1bn (USD 14.6mn). The Resident Bangladeshi

allocation of 2 million shares was oversubscribed by 15.5
_______________________________________________________________________________________
The company topped the turnover list on Dhaka Stock
Exchange with BDT 488.12mn (USD 7.13mn) traded with an
18.1% rise in its price. Stock prices of the bank closed at
BDT 6,628.25 (USD 96.8) per share on the news that it will
hold its AGM. The opening price of the issue on the DSE
was BDT 7,800 (USD 113.92) per share and rose as high as
BDT 8,100 (USD 118.30) per share.
http://www.thefinancialexpress-
NAV of 8 ICB mutual funds declared

The Financial Express, Monday, July 21, 2008
The Investment Corporation of Bangladesh (ICB) has

declared the net asset values of its eight mutual funds, based
on current market values.
Name NAV (BDT) NAV (USD)

st
1 ICB Mutual Fund 4,474.5 65.3
2ndICB Mutual Fund 1,010.6 14.8
rd
3 ICB Mutual Fund 844.3 12.3
th
5th ICB Mutual Fund 1,044.1 15.2
th
7th ICB Mutual Fund 512.9 7.5
th
_______________________________________________________________________________________
Turnover Leaders Best Performers* Worst Performers*
(All fig. in mn) BDT USD
% Change % Change
Beximco Pharma 1,318 19.2 Bd.Thai Aluminium Sandhani Life Insurance
51.2 -24.3
Square Pharma 1,150 16.8 Wata Chemicals 6th ICB M.F.
48.2 -18.5
ACI Ltd 1,149 16.8 Rahman Chemicals Square Pharma
41.7 -18.3
UCBL 1,055 15.4 BATBC 8th ICB M.F.
35.2 -18.0
Keya Cosmetics 714 10.4 Therapeutics 3rd ICB M.F.
26.3 -16.8
BATBC 700 10.2 Islami Bank Aims 1st M.F.
19.8 -16.5
BEXIMCO 694 10.1 Social Investment Bank Libra Infusions Limited
19.5 -15.8
Lankabangla Finance
538 7.9 Glaxo SmithKline 15.3 5th ICB M.F. -15.3
Com
Apex Adelchi Footwear 456 6.7 Eastern Housing 13.8 2nd ICB M.F. -14.5
Islami Bank 387 5.6 Rangpur Foundry 13.7 Prime Islami Life -14.5
*By closing price

Market Cap. by Sector* Correlation Matrix with other Indices*
Banks 55.1% S&P FTSE NIKKEI KSE
Pharmaceuticals 10.9% 500 DJIA 100 SENSEX 225 100 DSE
Fuel & Power 10.4% S&P 500 1.00
Insurance 5.9% DJIA 0.94 1.00
Cement 5.6% FTSE 100 0.65 0.63 1.00
Engineering 2.7% SENSEX -0.09 -0.13 -0.07 1.00
Miscellaneous 2.7% NIKKEI 225 -0.13 -0.12 0.07 0.53 1.00
Foods 1.9% KSE 100 0.02 0.03 0.07 0.24 0.29 1.00
Textile 1.8% DSE -0.14 -0.22 -0.12 0.17 0.12 0.16 1.00
Tannery 1.5% * Based on the last 65 monthly returns
Service & Real Estate 0.9%
IT 0.4%
Ceramics 0.1%
Paper & Printing 0.07%
Jute 0.03%
Total 100%
*As of May 31, 2008
Research Team
Professor Jahangir Sultan Shahidul Islam

Senior Advisor Investment Manager
jahangir.sultan@at-capital.com shahid.islam@at-capital.com
Rashed Hasan Syed Najibullah

Research Associate Research Assistant
rashed.hasan@at-capital.com syed.najibullah@at-capital.com
_______________________________________________________________________________________
Economics
Growth in nominal GDP across different sectors Market

Market News
Sector FY06 FY07 FY08

• Bahrain lifts ban on work permits
Agriculture & forestry 5.23 4.69 3.47
Crops & horticulture 5.03 4.43 3.44 • EU adopts new regulation for GSP
Animal farmings 6.15 5.49 2.41 • BB net profits increase by 51%
Forest & related services 5.18 5.24 5.42 • Finance ministry approves new rule on bank
Fishing 3.91 4.07 4.11
borrowings
Mining & quarrying 9.26 8.33 8.61
Natural gas and crude
9.52 8.03 8.11
petroleum
Other mining & coal 8.84 8.80 9.41 Nominal GDP growth in Bangladesh over last 5 years
Manufacturing 10.77 9.72 7.42
Large & medium scale 11.41 9.74 7.22
Small scale 9.21 9.69 7.97
Electricity, gas & water supply 7.67 2.10 4.88
Electricity 7.45 1.08 4.29
Gas 9.37 7.37 7.95
Water 7.55 7.08 7.29
Construction 8.31 7.01 5.93
Wholesale & retail trade 6.75 8.04 7.20
Hotels & restaurants 7.45 7.52 7.58
Transport, storage & communication 7.98 8.03 8.69
Land transport 4.14 4.18 4.24
Water transport 1.95 1.73 1.93
Air transport 5.25 2.01 5.01
Support transport services,
6.13 8.93 8.02
storage
Post and telecommunications 26.70 23.29 23.41
Financial intermediations 8.50 9.18 8.97
Monetary intermediation
8.19 9.34 9.02 Latest
Latest treasury yields
(banks)
Insurance 9.16 8.21 8.31
Other financial intermediation 10.94 11.62 11.54 Weighted average
Auction date Tenor & security type
Real estate, renting business activities 3.69 3.76 3.59 yield
yield
Public administration & defence 8.15 8.41 7.15 20-Jul-08 91-day T-bill 7.78%
Education 9.05 8.96 7.88
20-Jul-08 182-day T-bill 8.01%
Health & social works 7.79 7.64 7.50
Community, social & personal services 4.09 4.58 4.64 20-Jul-08 364-day T-bill 8.51%
Source: Bangladesh Bureau of Statistics
15-Jul-08 5-year T-bond 10.60%

Per capita GDP, GNI & NNI at current prices (USD)
FY06 FY07 FY08 (P) 22-Jul-08 20-year T-bond 13.07%
Gross Domestic Product 447 487 554 Source: Bangladesh Bank

Gross National Income 476 523 599
S Adeeb Shams
Net National Income 441 485 556
Research Associate
Source: Bangladesh Bureau of Statistics adeeb.shams@at-capital.com
_______________________________________________________________________________________
Economics News
Economic News Foreign exchange reserves rose to approximately USD 6bn
at the end of the 2007-08 fiscal.
Bahrain lifts ban on work permits
Independent Bangladesh, Thursday July 24, 2008 Other major sources of income included revaluation gains,
interest from government borrowings, earnings from banks
Bahrain has lifted a ban on issuing work permits for and interest from the credit extended to employees.
Bangladeshi workers on the condition that they must abide
by the country's laws, said the overseas Employment http://www.newagebd.com/2008/jul/22/busi.html
Secretary. The Middle Eastern kingdom placed a ban on
issuing work permits for unskilled Bangladeshi workers on Finance ministry approves new rule on bank borrowings
May 26, following the killing of a Bahraini citizen by a The Financial Express, Sunday July 20, 2008
Bangladeshi mechanic. Another Bangladeshi worker was
executed by a firing squad on June 6, after being convicted The Finance Ministry has approved new regulations aiming
of murdering Bahraini fashion designer Sana Al Jalahama in to keep bank borrowings within 3% of the country's GDP,
2006. according to Ministry officials. The regulation, the
'Government Properties and Budget Management Ordinance
Reports were published in Bahrain, that after almost two 2008’, the first of its kind in Bangladesh, was prepared
months, the government is lifting the ban on the entry of following recommendations made by major donors and
unskilled workers from Bangladesh. The new conditions multilateral agencies. The ordinance will now be sent to the
stipulate that, Bangladeshis seeking work permits will have advisory council for approval. The IMF in its pre-budget
to submit a certificate issued by the Bangladeshi authorities opinion supported the caretaker government's move to
providing assurance that they will abide by Bahraini laws. finalise the regulation, stating that it would help keep
budgetary expenses under control.
There are presently 86,000 Bangladeshis living in Bahrain,
according to the Ministry of Expatriates' Welfare and The official said the new regulation, however, has not put any
Overseas Employment. restrictions on the government seeking loans from donor and
multilateral agencies. Among other things, the new regulation
http://www.independent- will make it mandatory for the government to keep aside 6.5
bangladesh.com/200807247889/country/bahrain-lifts-ban-on-work- per cent of GDP in the budget for the purpose of poverty
permits.html alleviation. The government's dependency on local bank
borrowings has grown in recent years, as a means to finance
EU adopts new regulation for GSP
The Daily Star, Friday July 25, 2008 the budget deficit. In the recently concluded 2007-08 fiscal,
the deficit reached 4.8% of GDP from a projected 4.2%. This
The European Commission has adopted a new regulation on forced the government to raise bank borrowings by 43% to
Generalised System of Preferences (GSP), which comes into BDT 104bn (USD 1.5bn), from the initially projected amount
effect from January 1, 2009 until the end of 2011. The EU of BDT 72.5bn (USD 1bn) for the year.
hopes that the new regulation will allow the EU to maintain http://www.thefinancialexpress-
preferential access to its market for 176 developing bd.info/search_index.php?page=detail_news&news_id=40168
countries.
According to a press release issued by the EU, the renewed

preference system will be updated and improved, ensuring
that GSP is targeted at those countries that need it most. As
a result of re-calculations to reflect the evolution of trade,
preferences for specific product groups will be re-established
for six beneficiary countries of GSP (Algeria, India,
Indonesia, Russia, South Africa and Thailand). Preferences
will be suspended for one country, Vietnam, for Section XII
products (footwear and some other products).
These adjustments are triggered automatically when a

country's performance on the EU market goes either above
or below a certain threshold.
http://www.thedailystar.net/story.php?nid=47316
BB net profits increase by 51%

New Age, Tuesday July 22, 2008
Bangladesh Bank announced an increase in net profits of

51% from BDT 34.6bn (USD 505.3mn) in the 2006-07 fiscal,
to BDT 52.2bn (USD 761.8mn) in 2007-08 of which BDT
25bn (USD 365mn) was earned through investments in
foreign markets. An official reported that Bangladesh Bank
invests its foreign exchange reserves in short term deposits,
in money markets, in particular, Singapore and Hong Kong.
_______________________________________________________________________________________
Sector News
Agriculture number of farmers to shift production to maize and paddy
cultivation which is expected to cause a 20 per cent decline
International increase in rice price lowers private rice import
import in sugarcane output. According to an assessment conducted
The Daily Star, Tuesday July 22, 2008 by the Bangladesh Sugar and Food Industries Corporation
(BSFIC), only 42% of demand (21,000 tonnes) was fulfilled
Rice and wheat importers have stopped imports due to with the corporation supplying 12,180 tonnes to farmers.
recent increases in food grain prices in international markets. Among the non-urea fertilisers, the corporation has estimated
Pressure on importers has been compounded by India that TSP fertiliser’s demand stands at 16,000 tonnes and
banning all exports of rice and the reduction in business MOP at 14,000 tonnes. According to the BSFIC, sugarcane
confidence following the recent anti-graft campaign and acreage would decline by 12%, to 194,000 hectares from a
government pressure to reduce profits. Rice generally gets preliminary target of 217,000 hectares.
imported between December and August as prices remains
low in the international market. On average 300,000 to http://www.newagebd.com/2008/jul/19/busi.html
400,000 tonnes of rice were imported each month during this
period last year. But for the last five months the private Agri-
Agri-input business flourishes on strong demand from the
sector import has been zero. farmers.
New Age, Sunday July 20, 2008
According to the food ministry, a total of 3.45 million tonnes
of food grains were imported in the last fiscal year,of which Agri-input businesses are thriving as the local farmers are
about two-thirds (2.56 million tonnes) were imported by the switching to modern technologies and better farming
private sector. Out of 3 million tonnes of wheat imported last products. Last year nearly 3,600 tractors were sold with sales
year, the government imported only 1 million tonnes while this year expected to reach 4,500 units. Sales of power tillers
the remainder was imported by the private sector. The are forecast to grow by at least 15 per cent to 70,500 units.
importers do not anticipate importing food drain over the next The local market of handy farm machines, including reapers,
few months. harvesters, seedling and weeding equipment, is estimated to
be BDT 1.2bn (USD 175.3mn), and it is growing by about
http://www.thedailystar.net/story.php?nid=46856 30% annually. The BDT 15bn (USD 219.1mn) market for
pumps and diesel engines for irrigation is expanding by
about 20% every year. Kafiluddin Ahmed, chairman of
Open Market Sales
Sales of rice set to be resumed from August
Bangladesh Fertiliser Association, said exorbitant prices
The Daily Star, Tuesday July 22, 2008
inflated the domestic market size of chemical fertilisers to
more than BDT 40bn (USD 5.84 bn). 33 companies have
The Government is planning to sell rice through the open
been marketing mixed fertilisers as farmers are increasingly
market from the last week in August, rather than in
looking for them amid soaring prices of common fertilisers.
September that was previously planned, in an attempt to
keep prices stable during the month of Ramadan. The
Some 70 enterprises are engaged in the BDT 3bn (USD
program will be extended to 250,000 tonnes of rices across
43.8mn) seed market with annual growth of 25 per cent,
the country, fixing prices, at BDT 28-30 (USD 0.41-0.44).
while many others are assessing entering the market of high-
Each person will be allowed to buy 3 kg of rice through 7,100
yielding seeds for paddy, potato and vegetables.
outlets across the country.
http://www.newagebd.com/2008/jul/20/busi.html#2
Aviation
Experts rule out major flood this year
The New Age, Thursday July 24, 2008
Air India Express to introduces flights between Dhaka and
Kolkata
Weather and water experts said that available statistics and The Daily Star, Monday July 21, 2008
data provided by different national and international agencies
indicate that the chances of major flooding in Bangladesh are Air India Express, a subsidiary of the Indian state-run Air
slim this year. Although the possibility of inundation is slim, India, recently introduced Dhaka-Kolkata flights, with the
usual monsoon flooding which affects 30% of the country has objective of offering attractive fares to passengers. Mukta D
not been ruled out. Tomar, acting High Commissioner of India to Bangladesh, S
Mahadevan, Executive Director (East) of National Aviation
http://www.newagebd.com/2008/jul/24/nat.html Company of India Ltd, SR Premkumar, Country Manager of
Air India Express Bangladesh, high officials of Civil Aviation
Sugarcane output is set to suffer due to the shortage of Authority of Bangladesh and Biman Bangladesh Airlines,
fertilizer among others, were present at the inaugural ceremony which
The New Age, Saturday July 19, 2008 took place at Zia International Airport.
Supply of sugarcane is expected meet only two thirds of Air India Express will operate six flights every week between
demand, as production has fallen significantly due to the Dhaka and Kolkata, while operating once a week between
unavailability of fertilizer. Inadequate supply of fertiliser, Dhaka and Mumbai.
coupled with lower sugarcane prices has instigated a good http://www.thedailystar.net/story.php?nid=46678
_______________________________________________________________________________________
Best Air to fly to Colombo and Male Firm asked not to indulge in unlawful reinsurance brokering
The Daily Star, Friday July 25, 2008 The Daily Star, Sunday, July 20, 2008
The government has cautioned Tyser Risk Management

Best Air, a private airline company, is to introduce flights to
(Bangladesh) Ltd, a concern of UK-based insurance giant
Colombo and Male from July 28. This is the first time a
Tysers, for its involvement in reinsurance brokering and
Bangladeshi private airliner is operating directly to Colombo
bypassing local insurance companies that is not permitted by
and Male.
the law.
Legal, fundamental and basic principles of insurance practice
permit insurance companies to only appoint a broker for
Banking
Banking reinsurance, not the party insured. Warid Telecom
International appointed Tyser & Co Ltd as its reinsurance
Moody's, S&P respond to credit rating
rating proposal for broker side stepping the insurance companies, according to
Bangladesh, Govt. body to assess offers this week sources.
The Daily Star, Sunday, July 20, 2008
The question of reinsurance comes when one insurance
Two international credit rating agencies -- Standard & Poor's company wants to purchase coverage from a second
and Moody's Investors Service -- have responded to the insurance company for a risk that the first company is
central bank's proposal to provide a credit rating for insuring. This is normally done via a broker.
Bangladesh, a move that will help the country attract more
foreign investment and receive international aid more easily, Amyn Merchant, Chief Financial Officer of Warid Telecom,
sources said. said the discord has been due to a misunderstanding
between the parties concerned. “The problem has now been
The central bank in May this year initiated the move for resolved. Warid is still working with the three insurance
Bangladesh's first-ever credit rating following arbitrary credit companies and as per the law the insurance broker has
ratings for the country by donors and individual enterprises contracted with the insurance companies directly,” the Warid
and countries. BB officials believe a country rating will help CFO said.
Bangladesh mobilise resources from the capital market and
help foreign investors and multilateral lenders evaluate the http://www.thedailystar.net/story.php?nid=46592
investment environment before making investments or
providing loans. BB issues 'compromise' rule, finally
The Financial Express, Thursday, July 24, 2008
Although credit rating for business organisations is common
globally, country credit rating is relatively new. However, The central bank has issued a rule allowing commercial
besides developed countries, some Middle East and many banks to appoint two directors from the bank’s depositors.
African countries have country credit ratings. Credit ratings Under the new rule, the board of directors of a bank shall
generally reflect a country's overall economic and socio- submit a proposal to the central bank seeking approval of
political environment. appointment of its directors. "The appointment will be
effective after receiving approval from the central bank," the
http://www.thedailystar.net/story.php?nid=46589 rule said, adding that the central bank, if necessary, might
seek more names for the appointment of directors from the
Nordic Investment Bank awaits government
government nod to start board of directors of the bank concerned." The new rule will
operation in Bangladesh help the banks to ensure better management and
The Daily Star, Friday, July 25, 2008 transparency," Bangladesh Bank Governor Dr. Salehuddin
Ahmed told reporters while speaking about the new rule for
Nordic Investment Bank (NIB), an international financial appointment of two directors from bank depositors.
institution, is launching operations in Bangladesh.
The NIB aims to finance both private and public projects for bd.info/search_index.php?page=detail_news&news_id=40661
infrastructure development, sources in the Economic
Relations Division (ERD) said. On receipt of the Infrastructure & Energy
government's approval, the bank has already applied to set
up a branch. USD 24mn loan for setting up 3 small power plants
The Daily Star, Thursday July 24, 2008
NIB, headquartered in Helsinki, the capital city of Finland, Bangladesh Bank signed an agreement with NCC Bank to
was founded in the mid-1970s by five Nordic countries: lend USD 24mn from its Investment Promotion and
Denmark, Finland, Iceland, Norway and Sweden. In 2005,
Estonia, Latvia and Lithuania became sponsors of the bank. Financing Facility (IPFF) project for financing three small
NIB acquires funds for its lending by borrowing from power plants (SPPs) to be set up by Doreen Power
Generations and Systems Ltd. The three SPPs are expected
international capital markets. It has an office in Copenhagen to add 66MW power to the national grid between October
and a representative office in Singapore. The bank has and December, 2008.
financed over a thousand projects since it began operating in
1976. The World Bank approved the USD 50mn, IPFF project
_______________________________________________________________________________________
which extends finance to bank and financial institutions to by around 100MW, if gas was rerouted to efficient power
support long term financing of private sector entrepreneurs units.
for infrastructure projects.
http://www.newagebd.com/2008/jul/21/front.html#4
New air-
air-conditioned train to be seen on Chittagong-
Chittagong-Dhaka
SIMCL serves legal notice to Power Cell, demanding fair rail route soon
play Financial Express, July 21, 2008
Financial Express, Wednesday July 23, 2008
A new air-conditioned train is being launched on Chittagong-
Summit Industrial and Mercantile Corporation Ltd (SIMCL) Dhaka rail route. The last consignments of imported air-
has served a legal notice to the state owned entity, Power conditioned coaches have recently been unloaded at
Cell demanding fair play and to allow the company to submit Chittagong port. Bangladesh Railway authority imported 30
its bid for installing the 450MW Bibiyana power plant. SIMCL air-conditioned coaches from China for around BDT 1.06bn
had earlier sent two separate letters to Power Cell, (USD 15mn).
demanding its qualification to compete in the bidding for
setting up the Bibiyana power plant. Mongla Port remains idle
Financial Express, July 22, 2008
The deadline for bid submission for the Bibiyana power plant
expires on July 24, 2008. The country's second seaport at Mongla remained virtually
idle last week with no cargo ships anchoring at the problem-
http://www.thefinancialexpress- ridden port, officials sources reported. "Even till July 23 there
bd.info/search_index.php?page=detail_news&news_id=40594 is no schedule for any ship in the port," one official said,
stressing that if the situation continued, there would be a
Immediate seismic survey to retain maritime boundary urged paralysing impact on export and import activities through this
Financial Express, Tuesday July 22, 2008 sea port. On July 19, MV Banglar Maya left the port after
loading jute goods and since then no ship has anchored at
A 3 year deadline has been set by the United Nations (UN), the port. In this current situation of inactivity, several
for lodging maritime claims. This underlines the need to thousand port workers have been employed on no-work-no-
conduct seismic surveys of the territorial sea line, if pay basis. Mongla Port Authority hopes that the crisis would
Bangladesh is to submit a credible claim by 2011, under the be over very soon.
UN Convention on the Law of the Sea 2001 (UNCLOS).
Bangladesh needs to carry out two major surveys (a http://www.thefinancialexpress-
hydrographic survey and Geographical survey of the entire bd.info/search_index.php?page=detail_news&news_id=40454
coastline of Bangladesh) to determine its claim, under
UNCLOS. In total, the sea area is approximately 1.10 per
cent more than that of the mainland.. IT
PDB wants BDT 424mn
424mn more to pay rental power plant bills Second submarine cable by Dec likely
Financial Express, Tuesday July 22, 2008 The Financial Express, July 20, 2008
The Bangladesh Power Development Board (BPDB) has The government might issue a license for laying the second
sought an additional BDT 424.3mn (USD 6.2mn) subsidy submarine cable by December this year. The regulator, the
from the finance ministry for payment of monthly bills against Bangladesh Telecommunications Regulatory Commission
the purchase of electricity from seven rental power units. The (BTRC) has taken the necessary steps for laying an
BPDB needs financial support to offset the losses on account alternative submarine cable network in the private sector to
of selling electricity at lower rates than its purchase rates. create a competitive market and expand internet access to
rural areas. The Internet is vulnerable to frequent disruption
On January 15, 2008, the PDB signed contracts with six with dependence on a single undersea cable network.
rental power units to purchase electricity at comparatively Bandwidth charges in Bangladesh remain higher than in
high prices in order to cope with its electricity shortfall in the neighboring countries. The BTRC has received 13 proposals
short term. for establishment of a submarine cable under private
management. India's Tata Telecom, Reliance
http://www.thefinancialexpress- Communication, Mahanagar Telecommunication, Egypt's
bd.info/search_index.php?page=detail_news&news_id=40404 Orascom and Hong Kong's PCCW are among the
contenders for installing the alternative submarine cable.
Petrobangla, PDB agreed to shut down five inefficient power
plant units http://www.thefinancialexpress-
New Age, Monday July 21, 2008 bd.info/search_index.php?page=detail_news&news_id=40173
Petrobangla and the Power Development Board (PDB) has BTRC to issue licences for WiMAX soon
agreed in principle to close down five old units at The Financial Express, July 24, 2008
Shahjibazar and Shikalbaha power plants and divert the gas
to energy efficient units at other power plants. Petrobangla The Bangladesh Telecommunication Regulatory
has estimated that electricity generation could be increased Commission (BTRC) will soon issue licences for WiMAX, a
wireless digital communication system, to enhance the
_______________________________________________________________________________________
proliferation of the Internet. The target date is December this http://www.thefinancialexpress-
year, though BTRC expects to issue the licences much bd.info/search_index.php?page=detail_news&news_id=40816
ahead of time.
Real
Real Estate
The BTRC has published draft guidelines for national
licences for WiMAX on two different bands. The licence will Developer looks to high-
high-rise buildings
buildings to reduce costs
allow high-speed mobile wireless internet access and it will The Daily Star, Friday July 25, 2008
facilitate service providers to use the system for fixed and
mobile connectivity. The licencees will be authorised to Leading developers are aiming to reduce apartment prices
develop and operate a telecommunications network to by constructing high-rise buildings with at least 100
provide nationwide Broadband Wireless Access (BWA) apartments in each. Sheltech, a leading developer, believes
services based on WiMAX standards. this will reduce production costs by up to 10%. Sheltech
plans to undertake three large projects under which the
Amongst the short-term roll-out requirements, the regulator company will construct high-rise buildings in Rajarbag,
notes that within two years of issuing the licences, the Shantinagar, and Elephant Road areas in Dhaka to offer low
networks must cover 50 per cent of the Upazilas and 20 per cost flats. According to Sheltech’s plans, the maximum size
cent of all villages. The networks must also cover all of a single apartment in a high rise building will not be over
universities, medical and engineering colleges and research 1,500 square feet and average sales price per square foot
institutes in both the private and public sector; all ministries, will be between BDT 3,500 (USD 51.1) and BDT 5,500 (USD
divisions, attached departments, boards, corporations, semi- 80.3) which, the company officials said, is 10 per cent lower
government and autonomous organizations. than the market price. Industry sources said developers in
general have started to build more small apartments ranging
Meanwhile, Chinese company Huawei is planning to arrange from 800 to 1,000 square feet and apartments outside Dhaka
a WiMAX exhibition in the city at the end of this month. The to deal with the reduced sales of apartments, caused by
aim of the exhibition is to showcase Huawei's 3-G WiMAX global price increases of construction materials.
end-to-end solutions.
http://thedailystar.net/story.php?nid=47312
bd.info/search_index.php?page=detail_news&news_id=40672 Realtors missing deadlines for apartment handover
The Financial Express, Saturday July 26, 2008
IDCOL to disburse working capital among software, ITES
firms It has been reported that more than 50% of apartment buyers
Financial Express, July 21, 2008 have faced delays in taking possession of their flats each
year as realtors often fail to hand over apartments within
IDCOL has set aside a fund to be disbursed as working agreed deadlines, according to the REHAB, the real estate
capital loans among software and ITES companies through industry body. The realtors while admitting the delay in
Trust Bank Ltd, IDLC Finance Ltd and ULC Ltd. handing over apartments, blamed the abnormal rise in
building material prices for the delay. Following an increased
http://www.thefinancialexpress- number of cases of missing deadlines by the realtors, a
bd.info/search_index.php?page=detail_news&news_id=40355 number of leading developers have stopped selling flats for
the time being. According to realtors, construction costs have
almost doubled over that of last year. One official of Asset
Leather
Leather Development, a leading developer, said that the costs of
construction went up from BDT 1,600 (USD 23.40) - 1800
Footwear exporters elated over EU withdrawal of GSP for (USD 26.30) per square feet to BDT 2,700 (USD 39.40) -
Vietnam 3200 (USD 46.78) including land prices.
The Financial Express, Saturday July 26, 2008
The country's footwear industry expects a boom in exports as bd.info/search_index.php?page=detail_news&news_id=40812
the European Union (EU) has decided to scrap the
Generalized System of Preferences (GSP) facility offered to
Vietnam by the end of this year, officials and exporters said Telecoms
Telecoms
on Friday.
1.66mn
1.66mn new mobile phone subscribers in June
Officials said a number of giant shoe makers of South Korea, The Daily Star, Thursday July 24, 2008
Taiwan and Hong Kong have already approached the
Bangladesh Export Processing Zones Authority (BEPZA) to Six mobile phone operators in Bangladesh added a further
explore possibility of relocating their factories here. 1.66mn mobile phones. The private landline operators, on
the other hand, added only 13,000 new customers to their
There is significant potential to develop the country's networks, Bangladesh Telecommunication and Regulatory
footwear industry as Bangladesh has available low cost labor Commission (BTRC) data showed. Around 44mn people, out
and raw material and Vietnam is the prime competitor. of a population of about 150mn, are now using phone
services including 1.28mn landline users. The
According to statistics of the EPB, the country's leather and telecommunication sector has witnessed remarkable growth
footwear exporters fetched over BDT 27.9bn (USD 407mn), following introduction of mobile telephony in 1993. However,
marking a 18.30% growth in the first 11 months of the current the landline operators have grown significantly, with limited
fiscal.
_______________________________________________________________________________________
demand, since private landline services were introduced in
2005.
BDT 5730mn (USD 83.7mn) TeleTalk expansion project gets

go--ahead
go
State-run mobile operator TeleTalk finally gave the go-ahead

for its much-talked-about BDT 5,730mn (USD 83.7mn)
network expansion project as the company last week
awarded two of its existing vendors the first phase of the
scheme. The BDT 2,730mn (USD 39.9mn) first phase work
went to European Nokia-Seimens Network and Chinese
Huawei. The board in has also decided to adopt an open
tender process for awarding the second phase of the project,
which is aimed to reach 1.8mn new customers by 2009.
57%
57% drop in GP's operating profit in six months
The country's largest mobile phone operator

Grameenphone's operating profit dropped by 57 percent in
the first half of the year 2008 compared to the same period
last year, mainly due to a significant amount of money it had
been fined by the telecom regulator. Grameenphone added
2.5mn customers during the April -June period in 2008, but a
36 percent downfall of monthly average revenue per user
(ARPU) also caused the company's operating profit to fall to
NOK 329mn (USD 63.8mn/BDT 4.4bn) from NOK 758mn
(USD 146.9mn/BDT 10.1bn) a year earlier. In the second
quarter ended on June 30, 2008, Grameenphone's operating
profits stood at NOK 40mn (USD 7.8mn/BDT 534mn), which
was NOK 335mn (USD 64.9mn/BDT 4.4bn) by the end of
June 2007. The half yearly performance in terms of revenue
earnings also saw a negative trend. The company's revenue
dropped by 2 percent in June 2008 to NOK 2247mn (USD
435.4mn/BDT 29.8bn) compared to NOK 2307mn (USD
447mn/BDT 30.6bn) in June last year. (NOK 1= BDT 13.20).
With 20.31mn customers by the end of June 2008, the

company is still the number one among the six mobile
operators in the market. Grameenphone’s market share also
came down to 47 percent by the end of June 2008 from
around 50 percent a year earlier. In the three months to June
30, Grameenphone's EBITDA (earnings before interest,
taxes, depreciation and amortisation) had decreased by 43
asd percent to NOK 304mn (USD 44.4mn/BDT 3.0bn) from
NOK 540mn (USD 78.9mn/BDT 5.4bn) from a year earlier.
_______________________________________________________________________________________
AT Capital Team – Dhaka
Ifty Islam Managing Partner (880-2)-8155144, ext. 132 ifty.islam@at-capital.com
Syeed Khan Partner (880-2)-8155144, ext. 132 syeed.khan@at-capital.com
Masud Khan Senior Advisor (880-2)-8155144, ext. 132 masud.khan@at-capital.com
Akther Ahmed Senior Advisor (880-2)-8155144, ext. 132 akhter.ahmed@at-capital.com
Junaid Khan Investment Advisor (880-2)-8155144, ext. 121 junaid.khan@at-capital.com

Shahidul Islam, CFA Investment Manager (880-2)-8155144, ext. 122 shahid.islam@at-capital.com
Taufique Hasan Investment Manager (880-2)-8155144, ext. 123 taufique.hasan@at-capital.com
S.M. Rashedul Hasan Research Associate (880-2)-8155144, ext. 137 rashed.hasan@at-capital.com

A. M. A. Bari Nahid Research Associate (880-2)-8155144, ext. 130 nahid.bari@at-capital.com
Mohammad Emran Hasan Research Associate (880-2)-8155144, ext. 131 emran.hasan@at-capital.com
Syeda Tasnuva Akhter Research Associate (880-2)-8155144, ext. 127 syeda.tasnuva@at-capital.com
Abdullah Ibneyy Shahid Research Associate (880-2)-8155144, ext. 134 abdullah.shahid@at-capital.com
Ahmad Sajid Research Associate (880-2)-8155144, ext. 135 ahmad.sajid@at-capital.com
S Adeeb Shams Research Associate (880-2)-8155144, ext. 128 adeeb.shams@at-capital.com
Sohana Alam Seraj Office Manager (880-2)-8155144, ext. 132 sohana.alamseraj@at-capital.com
Abdullah-Al-Farooq Research Analyst (880-2)-8155144, ext. 133 abdullah.farooq@at-capital.com

Tami Zakaria Research Analyst (880-2)-8155144, ext. 125 tami.zakaria@at-capital.com
Sanwar Ahmed Research Analyst (880-2)-8155144, ext. 139 sanwar.ahmed@at-capital.com
Md. Zahidur Rahman IT Analyst (880-2)-8155144, ext. 140 zahidur.rahman@at-capital.com
Ashek Ishtiak Haq Research Assistant (880-2)-8155144, ext. 136 ashek.haq@at-capital.com

Syed Najibullah Research Assistant (880-2)-8155144, ext. 136 syed.najibullah @at-capital.com
Minul Islam Research Assistant (880-2)-8155144, ext. 136 minul.islam @at-capital.com
Rasidul Hasan Research Assistant (880-2)-8155144, ext. 136 rasidul.hasan @at-capital.com
AT Capital Team – North America

Zarif Munir Senior Advisor zarif.munir@at-capital.com
Professor Jahangir Sultan, Ph.D. Senior Advisor jahangir.sultan@at-capital.com
M. Nasim Ali Senior Advisor nasim.ali@at-capital.com
Iqbal Hussain Senior Advisor iqbal.hussain@doctors.org.uk
© Copyright 2008. Asian Tigers Capital Partners Limited, Level 16, UTC Tower, Panthapath, Dhaka –
1215, Dhaka, Bangladesh. All rights reserved. When quoting please cite “AT Capital Research”. The
above information does not constitute the provision of investment, legal or tax advice. Any views
expressed reflect the current views of the author, which do not necessarily correspond to the opinions of
Asian Tigers Capital Partners or its affiliates. Opinions expressed may change without notice. Opinions
expressed may differ from views set out in other documents, including research, published by Asian
Tigers Capital Partners Limited. The above information is provided for informational purposes only and
without any obligation, whether contractual or otherwise. No warranty or representation is made as to the
correctness, completeness and accuracy of the information given or the assessments made.
_______________________________________________________________________________________

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27 July 2008 AT CAPITAL RESEARCH

AT Capital Weekly Update

Key themes in this issue are:

Professor Jahangir Sultan

UTC Building, Level 16

publishing research with price targets either for individual

The approx USD 1bn+ implicit valuation of AKTEL on the

Source: BTRC & AT Capital projection

Finally, as the chart below illustrates, the premium to face

Trust Bank Limited

BRAC Bank Limited

Berger Paints Bangladesh Limited

0% 600% 1200% 1800%

Premium as % of Face value

As the chart below illustrates the number of properties with

US Durable Goods Jump Higher

US Housing Legislation Bill Passed by

The US Congress passed important legislation that takes

The FHA could insure USD 300bn in such mortgages, which

The measure includes USD 15bn in tax cuts, including a

Semtech bankrupt with USD 3.2bn of losses;

US oil trading firm Semtech became the latest victim of the

Also, four Islamic insurance companies (Islamic Insurance

Global growth in Islamic finance remains strong

The Islamic Banking sector continues to grow globally at a

They noted that there are a number of reasons why the

In terms of opportunities, Bangladesh is clearly an economy

• Margin lending limits relaxed

DSE Performance: 30 Days Return of regional indices last week

Market Summary Valuation snapshot

DSE General Sector P/E

On Wednesday, market sentiment was bolstered when the

The Social investment Bank, a Shariah-based bank, has

http://www.thedailystar.net/story.php?nid=47143 At a board meeting at the Dhaka Stock Exchange, it was

BDT 1bn (USD 14.6mn). The Resident Bangladeshi

NAV of 8 ICB mutual funds declared

The Investment Corporation of Bangladesh (ICB) has

Name NAV (BDT) NAV (USD)

*By closing price

Professor Jahangir Sultan Shahidul Islam

Rashed Hasan Syed Najibullah

Growth in nominal GDP across different sectors Market

Sector FY06 FY07 FY08

1-Jul-08 10-year T-bond 11.72%

FY06 FY07 FY08 (P) 22-Jul-08 20-year T-bond 13.07%

Gross Domestic Product 447 487 554 Source: Bangladesh Bank

According to a press release issued by the EU, the renewed

These adjustments are triggered automatically when a

BB net profits increase by 51%

Bangladesh Bank announced an increase in net profits of

The government has cautioned Tyser Risk Management

BDT 5730mn (USD 83.7mn) TeleTalk expansion project gets

State-run mobile operator TeleTalk finally gave the go-ahead

The country's largest mobile phone operator

With 20.31mn customers by the end of June 2008, the

Junaid Khan Investment Advisor (880-2)-8155144, ext. 121 junaid.khan@at-capital.com

S.M. Rashedul Hasan Research Associate (880-2)-8155144, ext. 137 rashed.hasan@at-capital.com

Abdullah-Al-Farooq Research Analyst (880-2)-8155144, ext. 133 abdullah.farooq@at-capital.com

Ashek Ishtiak Haq Research Assistant (880-2)-8155144, ext. 136 ashek.haq@at-capital.com

AT Capital Team – North America

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