2020Capital Market Outlook

Capital Market Outlook 2020

2

▪ We expect 2019 to be a neutral year for capital market investors and the market will yield a nominal return in 2020 with tedious turnover.

▪ Bangladesh Capital Market witnessed two consecutive negative year and the major index DSEX fell 28.7% during this period. In the year 2019, key marketindex fell 17.3% to 4,452; hitting a 42 month low and the total turnover fell 14.6% to BDT 1.14 trillion.

▪ Major factors that dragged the market includes but not limited to liquidity crunch in the banking sector, gloomy macroeconomic outlook, aggressive bankborrowing by government, soaring non-performing loans, some policy alterations, foreign investors' drawing funds out of the market amid currencydevaluation, poor performance of IPOs and sluggish earnings growth & poor payout by the listed companies.

▪ Liquidation of People's Leasing and Financial Services (PLFS) due to deterioration of financial health coupled with telecom regulator’s tussle withGrameenphone also shattered the confidence of both local and foreign investors.

▪ As per our expectation, market situation will remain same in the first half of 2020. However, market may turn around in the later half of the yearconsidering cheaper stock prices and improvement in macro economic situation.

▪ Market index may touch its last five years’ lowest point of 3,959 in bearish case and highest possible index point will be last five year’s median index point5,153.

▪ Market P/E ratio is 12.4x at the year end which is just nearby the last 10 years lowest P/E ratio of 12.04. Market Capitalization to GDP ratio fell to 15%which is 10 years low in yearly basis.

▪ Average turnover is expected to decline to BDT 4.60 bn in compared to the 4.80 bn in 2019. Velocity ratio stood at 34% at the year end as both themarket turnover and market capitalization dropped significantly.

Bangladesh Economy- At a Glance

3

302.4FY’19, (USD Bn)

Economy Size

40.5FY’19, (USD Bn)

Export

8.15%FY’19

Real GDP Growth

170(mn)

Population

59.9FY’19, (USD Bn)

Import

5.5%FY’19 (P2P)

Inflation

147,570(sq.km)

Land Area

32.7FY’19, (USD Bn)

Forex Reserve

1,905(USD)

Per Capita GNI

26.10Years

Median Age

16.4FY’19, (USD Bn)

Remittance

23.1%2017

Poverty Rate

GDP Grew 8.15% in FY’19

4

▪ Bangladesh economy saw a robust 8.15% growth in FY’19 leading the government to set a target of 8.2% growth for FY’20.

▪ Achieving this target will be challenging due to poor revenue collection, lower growth in export and import.

▪ However, GDP of the country has grown at a CAGR of 7.39% for last five years.

▪ In FY’19, Industry, Agriculture and Service sector grew 13.0%, 3.5% and 12.1% respectively, contributing 35%, 14% and 51% to total GDP.

▪ Government estimated a Budget of BDT 5,231.90 bn which is 18.2% higher than the revised Budget of previous fiscal year.

▪ The revenue target for FY’20 is BDT 3,778 bn, 19.33% higher than that of FY’19.

▪ Budget deficit as % of GDP is likely to remain unchanged at 5% if targets are met.

▪ Domestic financing in FY’20 will rise to 53.2% of deficit in contrast to 46.8% in Revised Budget FY’19.

▪ Bank borrowing will be in focus to finance the budget deficit while non-bank borrowing is expected to decline due to strict monitoring of sales of well-paid National Savings Certificates.

▪ In the first five months of this fiscal year, government borrowed Tk 471.39 billion from the banks against the target of BDT 473.64 bn in whole year owingto the lower than expected revenue collection.

▪ Excessive Bank borrowing will adversely affect banking sector’s liquidity which in consequence will hinder the industry growth.

Private Sector Credit Growth Sinks to Nine Year Low

5

▪ Private Sector Credit Growth dipped to 9.87% in November this year and this growth remained far below the Bangladesh Bank’s estimation of 14.8% forthe current fiscal year.

▪ Increased Government Bank Borrowing, presence of large default loans, slower export-import businesses and lower deposit growth are causing thisnosedive in the private sector credit growth.

▪ Weighted Average deposit and lending rates in FY 19 stood at 5.43% and 9.58% respectively, a slight decrease from previous fiscal year.

▪ However, average interest rate will go further down as government is going to implement single digit interest rate for both deposit and lending from April2020, questions remain over the implementation of the new rates.

▪ Maximum 9% rate will be in effect for all types of industry loan whereas 6% ceiling is set for deposit rate.

▪ Amount of default loans in the banking sector rose to BDT 1,162 bn despite huge facilities in position to regularize bad loans.

▪ Overall inflation rose to 6.05 percent in November due mainly to food inflation driven by onion price hike. The government has targeted to keep inflationwithin 5.5 percent in the current 2019-20 fiscal year that may not sustain because of gas price hike and increasing food inflation.

▪ The exchange rate of Bangladesh Taka (BDT) depreciated significantly against the US dollar in the recent months mainly due to higher demand for thegreenback for settling the import bills.

▪ Currency devaluation may benefit export oriented sectors mainly RMG at the cost of importers. However, the finance minister expressed his intention notto devalue currency any more instead provide sector specific incentives.

External Sector Struggling on Lackluster Export Growth

6

▪ Current account deficit decreased 36.88 percent year-on-year to $1.30 billion in the first four months of 2019-20. declining trend of imports has helpedreduce the deficit in the current account.

▪ Trade deficit widened slightly in the first four months of the fiscal year when exports fell more than imports, a development that depicting thesluggishness of the economy.

▪ Bangladesh earned $40.53 billion by exporting goods in FY19 posted 10.55 percent rise year over year. However, export is continuously slowing down incurrent fiscal due to contraction of RMG exports exacerbated by global economy shrinkage, rise in production cost and lower prices offered by foreignbuyers.

▪ Bangladesh needs to diversity its export basket with leather products, frozen goods, agro, pharmaceuticals and jute products and explore newdestinations for export in order to get ready for the fourth industrial revolution.

▪ As part of export diversification government announced 20% cash incentive has been fixed on exports of agricultural products, agro-processing,diversified jute export, Active Pharmaceuticals Ingredients, Halal Meat, potatoes and jute particles boards and 10% cash incentive on frozen shrimp, crustand finished leather from Savar factories with effluent treatment plant, plastic products, locally manufactured paper, IT enables services etc.

▪ Imports dropped by 3.17 per cent in the four five months of the current fiscal year. Slower growth in capital machineries and industry raw materials mightimpact the productivity of the countries’ industrial sector.

▪ Bangladeshi expatriates have continued to contribute to the economy by remitting foreign currencies. In the first five months of current fiscal remittancereceived was $7.71 bn up by 22.6% year over year. The 2 percent incentives on remittance is encouraging the expatriates to send more money.

Inflation is on the Rise Due to Food Price Hike

7

Inflation (12 Month Average) Inflation (Monthly)

7.48%

6.89%

6.16%

5.55% 5.69% 5.57% 5.61%

FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20

*Inflation July-November in FY 20

5.54%

7.03%

5.98%

5.42% 5.33%

5.66%5.88%

6.21%

3.49%

5.49% 5.57%

5.21% 5.09%

Ap

r-1

8

May

-18

Jun

-18

Jul-

18

Au

g-1

8

Sep

-18

Oct

-18

No

v-1

8

Dec

-18

Jan

-19

Feb

-19

Mar

-19

Ap

r-1

9

May

-19

Jun

-19

Jul-

19

Au

g-1

9

Sep

-19

CPI Inflation (P-to-P)Food Inflation (P-to-P)Non-food Inflation (P-to-P)

Import Dropped Round the year Due to Currency Depreciation

8

40.6 40.7 43.147.0

58.9 59.9

18.6

FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20

Import in USD bn (Yearly)

Import Payments to Major Commodity in USD mnImport Payments to Major Country in USD mn

6.12

4.70 4.89 5.12 5.12

3.88

5.25

4.07 4.225.03

Country FY 18 FY 19 Growth

China 11,706.0 13,638.0 16.5%

India 8,621.5 7,647.5 -11.3%

Singapore 2,697.5 3,105.7 15.1%

Japan 1,870.0 1,846.3 -1.3%

Indonesia 1,773.2 1,940.3 9.4%

Brazil 1,442.1 1,402.1 -2.8%

Malaysia 1,410.4 1,496.0 6.1%

Thailand 1,194.2 957.1 -19.9%

Commodity FY 18 FY 19 Growth

Cotton, Yarn, Textiles 9,423.0 10,030.0 6.4%

Food 1,633.0 1,559.0 -4.5%Intermediary goods 7,581.0 8,782.0 15.8%

POL 4,145.0 5,731.0 38.3%

Iron and steel 3,827.0 4,325.0 13.0%

Capital Machinery 4,585.0 5,147.0 12.3%

Chemical 2,136.0 2,222.0 4.0%

Others 23,437.0 22,590.0 -3.6%

Total 52,940.0 56,061.0 5.9%

*Import up to October 2019

Import in USD bn (Monthly)

Export is slowing down for Global Economy Shrinkage

9

30.2 31.234.3 34.7

36.740.5

9.6

FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20

Export in USD bn (Yearly)

3.683.38 3.34

3.03

3.81

2.78

3.89

2.84 2.92

Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19

Export in USD bn (Monthly)

Commodity 2017-18 2018-19 Growth

Woven Garments 9700 11104 14.5%

Knitwear 12878 14166 10.0%

Jute & Jute Manufactures 906 766 -15.5%

Fish, Shrimps and Prawns 499 423 -15.2%

Leather & Leather 709 612 -13.7%

Vegetable Products 106 116 9.4%

Plastic & Plastic Products 121 101 -16.5%

Export Receipt by Major Commodity in USD mnExport Receipt from Major Country in USD mn

*Export, July-September FY 20

Country FY 18 FY 19 Growth

Germany 4,281.6 4,684.0 9.4%U.S.A. 3,965.5 4,492.0 13.3%U.K. 2,810.1 2,959.0 5.3%Spain 1,817.5 1,994.0 9.7%France 1,636.3 1,846.0 12.8%Italy 1,349.9 1,386.0 2.7%Canada 785.7 965.0 22.8%China 563.2 590.0 4.8%Japan 716.4 825.0 15.2%Poland 867.2 1,032.0 19.0%

Government Incentive Boost up Inward Remittance

10

Remittance in USD bn (Monthly)

Remittance From Major Country in USD mn

1.60

1.321.46 1.43

1.75

1.371.60

1.44 1.48 1.64 1.56

14.215.3 14.9

12.815.0

16.4

7.7

FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20

*Remittance up to November 2019

Country 2017-18 2018-19 Growth

K.S.A 2591.5 3110.4 20.0%

U.A.E 2429.9 2540.4 4.5%

U.S.A 1997.9 1842.8 -7.8%

Kuwait 1199.7 1463.3 22.0%

Malaysia 1107.2 1197.6 8.2%

U.K 1106.0 1175.6 6.3%

Oman 958.1 1066.0 11.3%

Qatar 844.0 1023.9 21.3%

Italy 662.2 757.8 14.4%

Bahrain 541.6 470.0 -13.2%

Remittance in USD bn (Yearly)

Current Account Balance Improving but Remains in Negative Zone

11

Current Account Balance in USD mn

*Current Account Balance, July-October in FY 20

Import, Export & Remittance in USD bn

40

.6

40

.7

43

.1

47

.0

58

.9

59

.9

18

.6

30

.2

31

.2

34

.3

34

.7

36

.7

40

.5

9.6

14

.2

15

.3

14

.9

12

.8

15

.0

16

.4

7.7

FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20

Import Export Remittances

(447)

2,388 1,346

(1,631)

4,262

(1,331)

(9,567)

(5,254)

(1,304)

FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20

Foreign Direct Investment Rises 51% in FY’19

12

Historical Net FDI Inflow in Bangladesh Year wise Net FDI During Recent Five Years

528 506 1,007

615

1,195

1,141 1,154

1,253

1,253

1,363 165 344

195 712

1,330

FY 15 FY 16 FY 17 FY 18 FY 19

Equity Capital Reinvested earnings Intra-company Loans

1.14 1.29

1.60 1.55

1.83 2.01

2.46 2.58

3.89

FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19

FDI inflows Average, 1.67

BDT Depreciating as Demand for US Greenback Increasing

13

Forex Reserve, USD Billion Exchange Rate Movement (USD vs. BDT)

69.5

74.2

81.8

77.8 77.6 77.8 78.4

80.6

83.7 84.5 84.6

FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20

10.36

15.32

21.56

25.03

30.17

33.49 32.9432.72 31.73

Non performing Loan hits higher than ever, 12%

14

Weighted Average Lending rate and Deposit Rate

Non performing Loans of Banking Sector, in BDT Crore

Lending Rate Deposit Rate

22

.71

22

.64

42

.73

40

.58

50

.16

51

.37

62

.17

74

.3

93

.91

11

6.2

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

7.3%6.1%

10.0%8.9%

9.7%8.8% 9.2% 9.3%

10.3%

12.0%

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Non Performing Loan as % of Total Loan

Private Sector Credit Growth

13.2%12.6% 12.4%

12.1% 12.2%

11.3% 11.3%10.7% 10.7%

10.0% 9.9%

Budget FY’20 (Govt Bank Borrowing Might Exceed Target)

15

Budget Size and Revenue Target, BDT bn Bank Borrowing, BDT bn

199.2

309

471.3

FY18 FY19 FY20

Non Bank Borrowing, BDT bn

300

478.5

55.12

FY18 FY19 FY20

*Bank Borrowing , July-December 8 in FY 20

*Non Bank Borrowing , July-October in FY 20

3715

4425

5232

2594.5

3166.1

3,778.10

FY18

FY19

FY20

Budget Size

Revenue Target

11201259

1454

FY18 FY19 FY20

Budget Deficit, BDT bn

16

CAPITAL MARKET

UPDATE

Capital Market Highlights 2019

17

• 14.6% TotalTurnover De-Growth

• 4.8 Bn Net Foreign Sale (Jan-Nov)

BDT 4.80 BNAverage Daily Turnover

BDT 42.5 BNTotal Foreign Sale

BDT 37.7 BNTotal Foreign Buy

7.1%Foreign Turnover

Contribution

BDT 2.39 BN Minimum Daily Turnover

BDT 11.99 BNMaximum Daily Turnover

4,390.7DSEX Lowest Point

5,950.0DSEX Highest Point

4,452.9 DSEX Closing

• -17.3% (932.7 pts) Index Return

Market Posted Seven Years Low Return in 2019

18

• Investors had to tolerate a painful year in 2019. Market (DSEX) witnessedseven years record correction of 17.3% (932.7 points) against negative returnof 13.8% in 2018.

• In 2019, DSEX registered the lowest return in last seven years since 2012 (-19.7%). In fact, market witnessed around 28.7% negative return in last twoyears.

4,2

19

.3

4,2

66

.6

4,8

65

.0

4,6

29

.6

5,0

36

.1

6,2

44

.5

5,3

85

.6

4,4

52

.9

-19.7%

14.0%

24.0%

-17.3%

-30.0%

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

-

1,000.0

2,000.0

3,000.0

4,000.0

5,000.0

6,000.0

7,000.0

2012 2013 2014 2015 2016 2017 2018 2019

Index (LHS)

YoY Change (RHS)

4.2

4.0

5.0

4.2

4.9

8.7

5.5

4.8

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

-

2.0

4.0

6.0

8.0

10.0

2012 2013 2014 2015 2016 2017 2018 2019

Daily Average Turnover (LHS)

YoY Change (RHS)

• During the year, total turnover of DSE shrank to BDT 1.14 trillion (USD13.4 billion) which is 14.6% lower than previous year total turnover ofBDT 1.33 trillion.

• Daily average turnover also declined to BDT 4.8 billion in 2019 which islower by 12.8% compared to the previous year’s daily average turnovervalue of BDT 5.5 billion.

• Market sentiment observed bearish on few factors like spike of interestrate, liquidity crisis, aggressive bank borrowing by govt., BDT depreciatedagainst USD, declined of outstanding Foreign Portfolio Investment (FPI),Sluggish earnings growth and also poor payout ratio of listed companiesetc.

Daily Average Turnover at DSE (BDT billion)

Year End Index Points and YoY Return

Market Capitalization to GDP ratio fell to 15%

19

129%

59%41%

36%

37%

33%

35%51%

34%

34%

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

33%

26%

26%24%

21%20%

20%

21%17%

15%

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Turnover Velocity RatioMarket Cap to GDP Ratio

18.42

25.64

29.16

13.6812.07

15.0717.77

15.23 14.2917.28

15.1912.40

15.2

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

DSE Market PE Ratio (year-end)

Average PE, (15.2)

Historical Market PE Ratio, X

19.9

11.9

8.6 9.5 9.8 9.1

3.2 5.0 5.4

2011 2012 2013 2014 2015 2016 2017 2018 2019

Fund Raised Through IPO, BDT Billion

Sector Wise Turnover Contribution in 2019

20

Engineering, 12.9%

Pharma & Chemicals, 11.3%

Textile, 11.2%

Bank, 9.6%

General Insurance, 9.6%Fuel & Power, 9.4%

Miscellaneous, 4.6%

Financial Institutions, 4.1%

Food & Allied, 3.9%

Tannery Industries, 3.5%

Telecommunication, 3.3%

Ceramics Sector, 2.9%

IT Sector, 2.6% Life Insurance, 2.4%Block, 3.5%

Other Sectors, 5.2%

DSE Market Index and Turnover Trend in 2019

21

4,452.9

3,500

3,700

3,900

4,100

4,300

4,500

4,700

4,900

5,100

5,300

5,500

5,700

5,900

6,100

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Turnover, BDT million (LHS) DSEX (RHS)Issued rules on Qualified InvestorOffer by Small Capital Companies

Govt asks GP to pay BDT 125.8billion

Amendment of Capital Market exposure for Banks

Directive regarding declaration ofbonus shares.

Short Sales Rules 2019

Liquidity support for investment by banks in capital market through borrowing at Repo rate

Supreme Court orders GP to pay BDT 20.0 billion to BTRC in 3 months

DSEX Performance Timeline

Record Net Foreign Sell in 11 Months of 2019

22

• In 2019 foreign investors aggressively withdrew their investment. As ofNovember 2019 net sell stood at BDT 4.8 billion despite the net buy ofBDT 5.0 in first two months of this year.

• During this time, total foreign turnover at DSE stood at BDT 80.3 billionwhich is 10.7% lower on YoY basis. Foreign investors contributed 7.1%of total DSE turnover. During the period, total foreign buy was BDT37.7 billion and sell was BDT 42.5 billion.

• Such slump in foreign investment is mainly due to the BDTdepreciation against USD and volatility of current macro-economyconditions.

Net Foreign Investment at DSE in Last 11 Month (BDT mn)1

2.2

13

.5 26

.5 4

6.1

38

.3 50

.6 65

.8

44

.9

37

.7

11

.4

5.6

7.1

19

.9 3

6.4

37

.2

48

.7

50

.9

42

.5

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

YTD

'201

9

Buy (BDT Billion)

Sell (BDT Billion)

Year Wise Total Foreign Buy & Sell (BDT billion)

1.9%

3.8%

5.6%

7.2% 7.4%

5.3%

7.2% 7.1%

2012 2013 2014 2015 2016 2017 2018 2019

Year Wise Foreign Trade Turnover Contribution at DSE

1,753

3,232

(1,230)(1,540)

(652)(1,130)

(1,647)(1,030)

(604)(969) (989)

Jan

'19

Feb

'19

Mar

'19

Ap

r'1

9

May

'19

Ju

n'1

9

Ju

l'19

Au

g'1

9

Sep

'19

Oct

'19

No

v'1

9

All Sectors But General Insurance Frustrated the Investors

23

Sector2019 Return

Turnover Contribution

Market Cap PE Ratio (trailing) PBV Ratio % of Equity M Cap

% % BDT BN X X %

General Insurance 29.4 9.6 52.4 14.7 1.1 1.9

Life Insurance (2.0) 2.4 61.5 - - 2.2

IT Sector (5.2) 2.6 20.1 21.7 2.1 0.7

Bank (8.1) 9.6 535.8 7.2 0.8 19.0

Pharma & Chemicals (8.2) 11.3 469.9 16.1 2.1 16.7

Miscellaneous (10.1) 4.6 96.8 19.5 1.1 3.4

Fuel & Power (11.1) 9.4 386.8 10.4 1.2 13.8

Travel & Leisure (13.2) 0.7 21.7 NM 0.6 0.8

Ceramics Sector (16.8) 2.9 23.3 24.3 1.5 0.8

Food & Allied (19.4) 3.9 223.9 23.3 5.6 8.0

Telecommunication (21.5) 3.3 401.4 11.4 11.3 14.3

Services & Real Estate (25.0) 0.8 13.6 12.9 0.7 0.5

Financial Institutions (28.0) 4.1 139.3 31.1 2.0 5.0

Tannery Industries (28.5) 3.5 19.7 15.0 1.8 0.7

Textile (32.1) 11.2 104.5 17.6 0.7 3.7

Engineering (32.4) 12.9 165.7 14.9 1.1 5.9

Cement (32.5) 1.0 68.9 21.7 1.8 2.4

Paper & Printing (42.5) 0.5 10.0 304.5 1.1 0.4

Jute (46.8) 0.5 2.5 NM 9.4 0.1

Large Cap Companies Dragged the Market Index Down

24

14

%

6%

6%

5%

3%

3%

2%

2%

2%

1%

1%

1%

1%

1%

1.1

%

1.1

%

1.0

%

1.0

%

0.9

%

0%

2%

4%

6%

8%

10%

12%

14%

16%

GP

BA

TBC

SQU

RP

HA

RM

A

UP

GD

CL

REN

ATA

BR

AC

BA

NK

BER

GER

PB

L

ICB

MA

RIC

O

LHB

L

SUM

ITP

OW

ER

DU

TCH

BA

NG

L

OLY

MP

IC

ISLA

MIB

AN

K

TITA

SGA

S

NA

TLIF

EIN

S

BX

PH

AR

MA

EBL

PU

BA

LIB

AN

K

39

.4%

29

.2%

23

.4%

5.7

%

2.7

%

1.4

%

-4.9

%

-7.2

%

-7.9

%

-9.7

%

-12

.3%

-15

.1%

-17

.8%

-20

.0%

-21

.1%

-22

.2%

-22

.8%

-23

.7%

-33

.9%

MA

RIC

O

NA

TLIF

EIN

S

DU

TCH

BA

NG

L

REN

ATA

BER

GER

PB

L

EBL

PU

BA

LIB

AN

K

UP

GD

CL

SUM

ITP

OW

ER

BR

AC

BA

NK

BX

PH

AR

MA

TITA

SGA

S

BA

TBC

SQU

RP

HA

RM

A

ISLA

MIB

AN

K

GP

LHB

L

OLY

MP

IC

ICB

Large Cap Companies & Percentage of Equity Market Cap Return of Large Cap Companies in 2019

• Top 20 market Cap companies which grab around 54.7% of total equity market contributed to pull down the Index return. The top 20 companies faced17.0% price correction in 2019.

• Among them GP which hold 13.7% of total equity market Cap, witnessed record yearly loss of 22.2% since listing. Such massive loss of GP mainly due tothe BDT 125.8 billion claimed by the BTRC.

General Insurance Sector Steered the Top 20 Gainer Chart

25

362

240

177

154

147

147

95

90

68

67

64

63

61

58

55

53

51

51

49

48

STANCERAM

SAMATALETH

BEACONPHAR

SONARBAINS

UNITEDINS

PARAMOUNT

PROGRESLIF

PRIMEINSUR

CITYGENINS

DHAKAINS

GLOBALINS

SINOBANGLA

PROVATIINS

AGRANINS

ISNLTD

FEDERALINS

PURABIGEN

JANATAINS

RECKITTBEN

PRAGATIINS

Among the top 20 gainers list, 14 stocks placedfrom insurance sector.

Numbers are in percentage form, excluding IPOs

Top 20 Yearly Losers Comprises of Companies with Poor Performance

26

(76.3)

(67.2)

(64.7)

(62.7)

(61.9)

(59.3)

(58.3)

(58.3)

(57.4)

(57.1)

(57.1)

(56.1)

(55.7)

(55.7)

(54.5)

(54.4)

(54.2)

(54.0)

(53.9)

(53.0)

INTECH

LEGACYFOOT

AL-HAJTEX

ZAHINTEX

VFSTDL

TUNGHAI

USMANIAGL

FAMILYTEX

IFADAUTOS

GENNEXT

SHASHADNIM

CNATEX

RNSPIN

MITHUNKNIT

SAFKOSPINN

BANGAS

KBPPWBIL

ILFSL

SONALIANSH

KEYACOSMET

Numbers are in percentage form, excluding IPOs

MNCs Posted 15.4% Yearly Loss in 2019 Against 13.8% Return in 2018

27

• 12 MNC companies registered 15.4% yearly price correction. Out of 12 MNCs, 5 companies registered negative return including Heidelberg Cement (-50.8%), BATASHOE (37.6%), LHBL (-22.8%), GP (-22.2%), RAKCERAMIC (-19.1%) and BATBC (-17.8%). Whereas RECKITBEN (+48.5%), MARICO (+39.4%) andLINDEBD (+8.4%) were in the green side.

48

.5%

39

.4%

21

.1%

8.4

%

6.0

%

2.7

%

-17

.8%

-19

.1%

-22

.2%

-22

.8%

-37

.6%

-50

.8%

REC

KIT

TBEN

MA

RIC

O

GLA

XO

SMIT

H

LIN

DEB

D

SIN

GER

BD

BER

GER

PB

L

BA

TBC

RA

KC

ERA

MIC GP

LHB

L

BA

TASH

OE

HEI

DEL

BC

EM

Price Return of 12 MNC Companies

8.6

%

5.0

%

4.6

%

3.3

%

3.2

%

3.0

%

3.0

%

2.9

%

2.2

%

1.8

%

1.7

%

0.0

%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

GP

BA

TASH

OE

HEI

DEL

BC

EM

MA

RIC

O

RA

KC

ERA

MIC

GLA

XO

SMIT

H

LH

BL

LIN

DEB

D

REC

KIT

TBEN

BER

GER

PB

L

BA

TBC

SIN

GER

BD

Dividend Yield of 12 MNC Companies

Mutual Fund Registered 11.9% De-Growth in NAV @ Market Rate

28

Yearly NAV @ Market Return of Mutual Fund

-3.6

%

-6.3

%

-6.7

%

-7.2

%

-7.3

%

-7.8

%

-8.2

%

-8.7

%

-9.6

%

-11

.5%

-11

.8%

-11

.9%

-12

.1%

-12

.3%

-12

.5%

-12

.6%

-12

.7%

-13

.3%

-13

.5%

-13

.8%

-14

.1%

-14

.2%

-15

.8%

-16

.2%

-16

.2%

-16

.3%

-16

.4%

-17

.4%

-19

.1%

-21

.2%

-21

.3%

-21

.6%

-22

.2%

-23

.1%

-23

.5%

-24

.0%

-37

.9%

SEM

LFB

SLG

F

PH

PM

F1

1JA

NA

TAM

F

EBLN

RB

MF

PO

PU

LAR

1M

F

EBL1

STM

F

FBFI

F

IFIC

1STM

F

TRU

STB

1M

F

EXIM

1ST

MF

AB

B1S

TMF

GR

AM

EEN

S2

SEM

LIB

BLS

F

SEM

LLEC

MF

VA

MLB

DM

F1

CA

PM

IBB

LMF

LRG

LOB

MF1

SEB

L1ST

MF

NLI

1STM

F

AIB

L1ST

IMF

ATC

SLG

F

REL

IAN

CE1

NC

CB

LMF1

DB

H1

STM

F

MB

L1ST

MF

GR

EEN

DEL

MF

ICB

AG

RA

NI1

ICB

SON

ALI

1

PR

IME1

ICB

A

ICB

3R

DN

RB

IFIL

ISLM

F1

VA

MLR

BB

F

PF1

STM

F

ICB

EPM

F1S1

ICB

AM

CL2

ND

1ST

PR

IMFM

F

CA

PM

BD

BLM

F

53

.7%

20

.3%

19

.4%

9.5

%

9.1

%

7.0

%

6.7

%

3.8

%

3.7

%

-0.8

%

-2.3

%

-2.4

%

-4.3

%

-4.5

%

-6.8

%

-10

.6%

-10

.9%

-11

.1%

-13

.8%

-14

.0%

-14

.5%

-14

.8%

-15

.3%

-17

.7%

-18

.0%

-18

.0%

-18

.5%

-18

.5%

-20

.0%

-20

.3%

-20

.6%

-21

.0%

-21

.1%

-21

.7%

-30

.4%

-39

.5%

-42

.1%

1ST

PR

IMFM

F

ICB

AM

CL2

ND

CA

PM

BD

BLM

F

IFIC

1STM

F

TRU

STB

1M

F

SEM

LFB

SLG

F

GR

EEN

DEL

MF

PF1

STM

F

DB

H1

STM

F

GR

AM

EEN

S2

1JA

NA

TAM

F

PO

PU

LAR

1M

F

LRG

LOB

MF1

PH

PM

F1

AB

B1S

TMF

SEM

LLEC

MF

EBLN

RB

MF

AIB

L1ST

IMF

REL

IAN

CE1

FBFI

F

NC

CB

LMF1

ICB

3R

DN

RB

MB

L1ST

MF

CA

PM

IBB

LMF

EXIM

1ST

MF

SEB

L1ST

MF

NLI

1STM

F

ICB

EPM

F1S1

ICB

SON

ALI

1

VA

MLB

DM

F1

IFIL

ISLM

F1

PR

IME1

ICB

A

ATC

SLG

F

ICB

AG

RA

NI1

SEM

LIB

BLS

F

VA

MLR

BB

F

EBL1

STM

F

Yearly Price Return of Mutual Fund

1,5

00

1,5

00

1,0

00

30

0

30

0

25

0

20

0

20

0

15

0

ESQ

UIR

ENIT

RIN

GSH

INE

RU

NN

ERA

UT

O

NEW

LIN

E

SILC

OP

HL

SSST

EEL

GEN

EXIL

CO

PP

ERTE

CH

SEA

PEA

RL

9 New Equities Raised BDT 5,400 Million in 2019

29

• 10 new issues including one close-end mutual fund got listed in 2019. Among the new stocks 9 equity companies raised through IPO BDT 5.4 billionincluding premium.

• The newly listed companies posted 22.4% loss, calculated based on the year end closing price and weighted average price of first three trading session asopening price.

• GENEXIL generated highest return of 51.6% followed by SEAPEARL (+41.0%) and SILCOPHL (+30.0%). Whereas SSSTEL became the top loser among the newissues. The company posted 51.1% loss followed by ESQUIRENIT (-41.5%) and RUNNERAUTO (-36.3%).

Utilization of IPO Fund

51

.6%

41

.0%

30

.0%

-20

.8%

-21

.0%

-36

.3%

-39

.5%

-41

.5%

-51

.1%

GEN

EXIL

SEA

PEA

RL

SILC

OP

HL

NEW

LIN

E

RIN

GSH

INE

RU

NN

ERA

UTO

CO

PP

ERTE

CH

ESQ

UIR

ENIT

SSST

EEL

Price Return of Equities Listed in 2019 Fund Raised By Equities in 2019, BDT mn

76%

19%

5%

Expansion Loan Repayment IPO Expense

Foreign Holding Structure End of 2019

30

43

.5%

42

.1%

39

.9%

36

.7%

23

.8%

22

.7%

21

.9%

19

.8%

19

.6%

18

.3%

17

.1%

16

.8%

16

.0%

14

.2%

12

.3%

12

.2%

10

.1%

8.3

%

8.2

%

6.5

%

BR

AC

BA

NK

DB

H

OLY

MP

IC

BX

PH

AR

MA

ISLA

MIB

AN

K

REN

ATA

MLD

YEIN

G

SQU

RP

HA

RM

A

SHEP

HER

D

VFS

TDL

BSR

MLT

D

QU

EEN

SOU

TH

AA

MR

AN

ET

BA

TBC

IDLC

UN

ITED

AIR

CIT

YBA

NK

GR

EEN

DEL

T

BEX

IMC

O

MER

CA

NB

AN

K

Stock Wise Top Foreign Portfolio Investment (FPI) in DSE market

2.9

%

2.9

%

2.7

%

1.8

%

1.6

%

1.5

%

1.3

%

0.9

%

0.8

%

0.8

%

SQU

RP

HA

RM

A

BR

AC

BA

NK

IPD

C

JAM

UN

AB

AN

K

PR

EMIE

RB

AN

RU

PA

LIIN

S

GH

AIL

BB

SCA

BLE

S

UTT

AR

AB

AN

K

FAR

EAST

LIF

-5.1

% -3.3

%

-2.6

%

-2.6

%

-2.5

%

-2.3

%

-2.3

%

-2.2

%

-2.1

%

-2.0

%

GSP

FIN

AN

CE

RU

PA

LILI

FE

AP

EXSP

INN

MA

LEK

SPIN

SQU

AR

ETEX

T

SHA

SHA

DN

IM

BSR

MLT

D

ILFS

L

SIN

GER

BD

OR

ION

PH

AR

M

Top Net Foreign Buy in Following Stocks

Top Net Foreign Sell in Following Stocks

Sponsors' Share Sell Shattered Investor’s Confidence

31

Major Sponsor Sell in Terms of No. of Shares, in mn

19

.63

14

.68

10

.00

7.0

0

5.1

5

2.8

0

2.6

0

2.4

8

2.3

5

2.3

4

1.8

3

1.6

0

1.5

9

1.0

3

1.0

0

IPD

C

KB

PP

WB

IL

UP

GD

CL

DO

REE

NP

WR

NU

RA

NI

MO

NN

OC

ERA

DSS

L

IFA

DA

UTO

S

SHA

SHA

DN

IM

ALI

F

REL

IAN

CE1

DSS

L

NA

TLIF

EIN

S

TOSR

IFA

PR

IMEI

NSU

R

1.7

77

1.4

00

0.7

76

0.3

61

0.2

76

0.1

20

0.1

00

0.0

15

MA

KSO

NSP

IN

RD

FOO

D

MEG

HN

ALI

FE

MET

RO

SPIN

REL

IAN

CIN

S

AC

I

CO

NFI

DC

EM

CV

OP

RL

Major Sponsor Buy in Terms of No. of Shares, in mn

• During the year total 27 companies’ sponsor sold their holdings. Among them one of the sponsors of IPDC sold 81% shares of histotal holdings and another sponsor of KBPPWBIL sold his 100% ownership.

• Whereas, only 8 companies’ sponsor increased their holdings. Among them, Sponsor of MAKSONSPIN & RDFOOD bought 1.78million and 1.4 million shares respectively.

Regulatory Changes Throughout the Year 2019

32

Key Regulations By Bangladesh Bank

Date Regulations

6-Feb-19 Loan/Investment write-off policy

25-Feb-19 Policy for Offshore banking operation in Bangladesh

21-Apr-19 Change in loan classification and provisioning

16-May-19Regulation regarding investment in capital market by scheduled banks

16-May-19 Special policy on loan rescheduling and one time exit

26-May-19Policy regarding investment in non-listed securities by scheduled banks

11-Jul-19Limit of Export Development Fund (EDF) to leather goods and footwear industrial sectors.

5-Aug-19Re-fixing the maximum limit of borrowing fund from the Call Money Market

6-Aug-19 Guidelines regarding cash incentive to wage earners‟ remittance

22-Sep-19Liquidity support for investment by banks in capital market through borrowing at Repo rate.

14-Nov-19 Use of international cards for online payments.

19-Nov-19 Interest rate on borrowing from Export Development Fund (EDF).

15-Dec-19Export Subsidy for Small and Medium Industry in RMG/Textile

Sector.

Date Regulations30-Jan-19 Issued rules on Qualified Investor Offer by Small Capital Companies

11-Apr-19Forming three member committee for reviewing companies which are under Z category for more than one year

23-Apr-19Meeting with Finance Minister where discussion on strengthening ICB and double taxation problem of listed companies are discussed

24-Apr-19Directive barring private company employees provident fund to be sponsor of any mutual fund

8-May-19Forming committee for implementing the 2% and 30% shareholding by sponsor/director

8-May-19 Directive on change in counting convention of lock-in period

15-May-19 Directive regarding block module of lock-in securities of Sponsor/Directors

21-May-19 Directive regarding holding of minimum shares by Sponsors/Directors

23-May-19 Directive regarding declaration of bonus shares

28-May-19 Short Sales Rules 2019

29-May-19 Investment Sukuk Rules 2019

20-Jun-19 Condition regarding IPO and Rights Issue

27-Jun-19 Stop using same mobile no., NID and bank account in multiple BO

16-Jul-19 Approved amendment of Public Issue Rules 2015

16-Jul-19 Order regarding re-investment unit of mutual fund

14-Nov-19 Order regarding share price movement in the stock exchange trading

Key Regulations By Bangladesh Securities & Exchange Commission

Frontier & Emerging Market Valuation

33

Country IndexPE Ratio PBV Dividend Yield Yearly Return

X X % %

Pakistan KSE100 7.24 1.14 5.7% 10.7%

Vietnam VNINDEX 16.07 2.56 2.0% 8.1%

Thailand SET 16.85 1.74 3.1% 1.0%

Sri Lanka CSEALL 10 1.01 3.7% 2.3%

India SENSEX 23 3.15 1.4% 14.7%

Bangladesh DSEX 12.4 1.4 3.7% -17.3%

10.7%8.1%

1.0%2.3%

14.7%

-17.3%

Pakistan Vietnam Thailand Sri Lanka India Bangladesh

Index Return of Frontier & Emerging Market in 2019

Performance of Frontier Market Indices

34

This Document/Report has been prepared and issued by City Bank Capital Resources Limited (CBC) on the basis of the public information available in the market,internally developed data and other sources believed to be reliable. Whilst all reasonable care has been taken to ensure that the facts and information stated in theDocuments are accurate as on the date mentioned herein. Neither CBC nor any of its director, shareholder, member of the management or employee in the research team

or employee represents or warrants expressly or impliedly that the information or data of the sources used in the document are genuine, accurate, complete, authentic,and correct. Moreover, none of the director, shareholder, member of the management or employee in the research team or employee represents in any way beresponsible about the completeness, authenticity and correctness of the sources that are publicly available to prepare the Document. It does not solicit any action basedon the materials contained herein and should not be construed as an offer or solicitation to BUY or SELL or SUBSCRIBE to any security. If any person takes any actionrelying on this Document, shall be responsible solely by himself/herself/themselves for the consequences thereof any claim or demand for such consequences shall berejected outright by CBC or by any court of law.

Disclaimer

Syed Enayet Hossain Head of Research +88 01766 669 551 enayet@cbcrl.com

Nahid Hasan Research Analyst +88 01681 433 976 nahid@cbcrl.com

Samiya Rahman Momo Trainee Analyst +88 01945 564 722 samiya@cbcrl.com

Analyst Team

Contact

City Bank Capital Resources Limited (subsidiary of The City Bank Limited)10, Dilkusha, Jibon Bima Tower (1st Floor), Motijheel, Dhaka -1000, BangladeshLand Line: + (880)-2-9565925 | Fax: + (880)-2- 9585377| Web:http://www.cbcrl.com

Data SourceBangladesh Bank, Dhaka Stock Exchange, Bangladesh Securities and Exchange Commission, Ministry of Finance, The Daily Star, The New Age, TheFinancial Express and The Business Standard.