NBFI stocks fall for bar on dividend payout
Stocks of non-bank financial institutions (NBFI) dropped by about 1.5 per cent yesterday, a day after the central bank's banned them from providing dividends of more than 15 per cent.
However, the DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), rose 30 points, or 0.57 per cent, to 5,426.
On Wednesday, the Bangladesh Bank said the NBFIs, which have a capital adequacy ratio (CAR) of less than 10 per cent and more than 10 per cent default loans, will not be able to declare any dividend.
Even strong NBFIs are not allowed to provide dividends of more than 15 per cent for 2020.
The BB move aims at helping struggling NBFIs as they might face further difficulties in the coming months as non-performing loans are expected to escalate.
"The decision affected NBFI stocks as investors will get lower cash from them," said Prof Abu Ahmed, a former chairman of the economics department of the University of Dhaka.
The central bank can prevent weaker NBFIs from giving higher dividends for their future betterment, and this is acceptable, he said.
"But why is it preventing stronger firms from declaring higher dividends? Why should stronger NBFIs deprive their investors?" he asked.
If an NBFI keeps all the required provisions and maintains good financial health, it should be allowed to give higher dividends, the analyst said.
A merchant banker echoed Ahmed, saying NBFI stocks were impacted as investors realised that they would not get good dividends this year.
Turnover, an important indicator of the stock market, rose 40 per cent to Tk 746 crore.
On the DSE, 168 stocks rose, 63 declined and 115 remained unchanged.
Aramit Cement topped the gainers' list, rising 9.95 per cent, followed by Express Insurance, Orion Pharmaceuticals, eGeneration, and Vanguard AML Rupali Bank Balanced Fund.
Beximco Ltd topped the turnover list with shares worth Tk 124 crore changing hands, followed by Robi Axiata, LankaBangla Finance, British American Tobacco Bangladesh, and Summit Power.
Premier Leasing shed the most, dropping 5.55 per cent. C&A Textile, IDLC Finance, Miracle Industries and LankaBangla Finance also fell.
The port city bourse also rose. The CASPI, the general index of the Chittagong Stock Exchange (CSE), was up 60 points, or 0.34 per cent, to close the day at 15,650.
Among the 220 stocks traded, 95 rose, 64 dropped and 61 remained the same.
Comments