The DSE Brokers Association of Bangladesh yesterday urged the
government to revise the net profit distribution margin that it set for
Titas Gas Transmission and Distribution Company, as it has affected its
share prices and dividend declarations.
The investors always consider the listed state-owned companies,
including Titas Gas, as fundamentally strong companies, said Ahsanul
Islam, president of the association.
“But if the government reduces the profit margin, the companies also
lose their ability to provide healthy dividends, frustrating the general
investors,” he said at a press briefing at the bourse premises.
The net-profit distribution margin was re-fixed following the new
tariff structure for gas consumption, which was set by Bangladesh Energy
Regulatory Commission in August last year. The association is making
this recommendation to the government now after studying the recent
reports of its market watch committee.
The margin has been reduced by 33.72 percent, which means that if
Titas Gas was previously receiving Tk 100 as net profit, it will get Tk
33.72 less now. “It was major price sensitive information, but it was
not disclosed properly,” alleged the association's president. It had a
negative impact on the Titas Gas share prices, he said.
As a result of the new profit distribution margin, Titas Gas has
recommended only 15 percent cash dividends for 2014-15, the lowest since
its listing on the stock exchanges in 2008; its earnings per share for
July-September this fiscal year came down to Tk 1.57, from Tk 2.37 in
the same time last year.
The company's share price dropped to below Tk 50 yesterday, though
its price never dipped below Tk 60 in the last two years. It also left a
negative impact on the six other listed state companies.
“All the seven companies have lost over Tk 5,000 crore in market
capitalisation since August 30 last year, due to a fall in their share
prices,” Islam cited, adding that neither Bangladesh Securities and
Exchange Commission nor Dhaka Stock Exchange took action against Titas
Gas.
“We are requesting the government to revise the profit distribution
margin and fix it at a rational rate,” he said, urging the government to
discuss the matter with the stockmarket regulators prior to taking any
sensitive decision, especially on the listed state-owned companies.
Any comment without appropriate evidence leaves a negative impact on the capital market, he added.
“If there are irregularities, action can be taken after identifying
those,” he said, referring to the recent negative comments on the
capital market that affected the market adversely. The market lost
around Tk 2,500 crore in market capitalisation in just two weeks due to
the negative comments, he said. Stocks, however, closed almost flat
yesterday. DSEX, the benchmark index of DSE, slightly declined 2.21
points or 0.04 percent, to finish the last day of the week at 4,571.11
points.
Of the traded issues, 149 advanced, 122 declined with 53 securities
closing unchanged on the premier bourse. Turnover, another important
indicator of the market, declined 17.4 percent to Tk 342.45 crore, with
10.7 crore shares and mutual fund units changing hands on the DSE.
Referring to the government probe report on the market crash of 2010,
Islam said the report was mainly based on opinion, not facts and
figures. “That's why proper action cannot be taken.”
