Message from the CEO

Review of the Chief Executive Officer

CEO Sir

Bismillahir Rahmanir Rahim

Respected Shareholders,

Assalamu Alaikum.

It is an honour for me to be associated with Commerce Bank Securities and Investment Limited (CBSIL) and represent the Company on this occasion of its 2nd Annual General Meeting (AGM). The year 2012 was a big challenge for the Company as well as for me, as the Company had its first whole accounting period after the inception of its operation. I tried my level best to face challenges and achieve the desired operational performance on a shattering Capital Market situation.

Capital Market-2012

The year 2012 showed the continued setback in exchange indices, as the flames of the December 2010 still remain alive among the investors. After losing 36.58% in the previous year, DGEN shed another 19.75% in 2012, adding much to the woes of investors. The investors remained pessimistic and prolonged depressive tone of the market only helped shaking up investor confidence further. The average daily turnover of DSE dropped by 36.68% in 2012 compared to that of the previous year as the investors were losing confidence over the market.

Key features of Capital Market of Bangladesh during 2012

·         There was decline of 1038.30 points or by 19.75% in DGEN and that DGEN is now 52.69% below from its peak value of 8918.51 on December 05, 2010

·         DGEN bottomed on 06 February, 2012 at a 27-month low of 3616.24 points. The highest DGEN of 5502.30 points in 2012 was on 17 April.

·         The average daily turnover stood at BDT 4,206 mn. in 2012, which is 36.68% lower than that of the figure of BDT 6,642 mn. in 2011.

·         The primary market, however, remained vibrant during 2012, with 17 IPOs having a public offer of BDT. 12,081.90 mn.

The Capital Market witnessed a few significant structural changes, some of which are outlined below-

·         Mandatory Sponsors’/Directors’ Shareholding was implemented in May 2012

·         Draft Guidelines on Research and Investment Advisory Services in March 2012

·         Amendments in Margin loan Rules.

·         Progress in Omnibus Account Closeout; primarily the deadline was December 2012, which was further extended till February 2013.

·         BSEC introduced a 10-Year Roadmap for Capital Market.

·         Draft copy of Demutualization was already approved in October 2012 and the process is expected to be completed by June 2013.

·         Launching of MSA-Plus Software in June 2012 that enables broader investors’ participation as it offers web-based trading facilities.

·         Amendment in Mutual Funds Rules 2001 where disbursement of stock dividend, conversion of Close end to Open end Fund etc. has got approval.

·         The long expected Surveillance System has been initiated by BSEC in December 2012.

·         To ensure accuracy in the indices, DSE management with the help of Standard & Poor’s, an international financial services firm, progressed in introducing new Index for DSE by early part of 2013.

From the initiatives taken by the Government and other stakeholders, we may hope that the Capital Market would start behaving positively within a short span of time.


 

CBSIL performance

 

CBSIL, as we know, was incorporated on 20 September, 2010 with the Registrar of Joint Stock Companies and Firms in Dhaka as a Public Limited Company with an Authorized Capital of Tk. 100.00 crore and paid up capital of Tk. 20.00 crore which started its formal operation on 01 June, 2011, has just completed its first whole accounting period. Considering the Capital Market scenario, the performance was not unsatisfactory as the Company has earned more than its targeted net profit and EPS. Summary of the operating result highlighting the financial performance of 2012 is presented below:

                                                                                                                          (Tk. in million)

Particulars

31.12.2012

31.12.2011              (07 months

Operation)

% Increase/

(Decrease)

Gross Profit

100.77

72.45

39.09

Net Profit after tax transferred to Retained Earnings

11.39

(7.92)

243.74

Earnings Per Share (EPS) TK.

0.57

(0.40)

243.74

The company, in the backdrop of the negative aspects of the Capital Market, has tried hard to bring good financial results to meet the growing expectation of the respected shareholders. We have delivered a number of growth initiatives that are core parts of our master strategy and this would surely well place us in the future.

Special promotional campaign is going on with a view to enhance the number of BO accounts and attract potential customers to increase turnover. A recovery team has been formed in the head office as well as in branch level and officer wise target has been set for recovery of outstanding interest and margin loan. A few traders have been appointed on contractual basis to raise the trade volume. Incentive packages for the employees to encourage them for enhanced trade have been amended in consideration of the prevailing market scenario. Rescheduling of margin loan policy has been devised for the loan defaulters to repair and improve the portfolio positions of the affected investors due to significant erosion in the market values of stocks.

We hope to fulfill our vision to stay as one of the top brokerage firms in Bangladesh known for Efficient Trade Execution, Market Research and Client Services.

 

 

Acknowledgements:

I would like to convey my deep gratitude to the BCB management for their passionate all out support so that we could make a strong footing in the context of a rather unfavourable Capital Market. I would also express my special thanks to the respected Shareholders, valued customers who were always beside us. Our humble gratitude goes to the Ministry of Finance, Bangladesh Bank, Bangladesh Securities and Exchange Commission, Dhaka Stock Exchange Limited, Chittagong Stock Exchange Limited, different Banks and Financial Institutions and other well wishers for their co-operation in the development of the Company. My sincere gratitude goes to the honorable members of the Board of Directors for their prudent and timely guidelines in pursuit of achieving the operational excellence of the Company and the trust reposed on me in achieving the desired goal of the company. Special thanks go to my devoted colleagues for their honest and sincere approach towards their duties and responsibilities ensuring that the Company does well even in a painstaking situation. The employees of the company are determined to work with strong team spirit in a concerted way bearing in mind the words, “We shall overcome, Insha’Allah”.

May Allah help us with special blessings to attain our objectives.

Sd/-
M. A. Motalib Chowdhury
Chief Executive Officer

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