Swiss institutional investor raises its stakes in BATBC
The existing rout of the Dhaka bourse includes a silver lining: many well-performing companies are becoming bargains.
Swiss wealth management firm Pictet spotted this opening, which explains why among the funds it manages is defined to seize 5.25 lakh shares, or 0.29 %, of heavyweight British American Tobacco Bangladesh (BATBC) at the prevailing selling price.
Yesterday, the only listed tobacco company's share traded at Tk 910.20, therefore the purchase will problem PICTET LUX A/C THS KFFC (THS Kingsway Fund) by about Tk 47 crore.
The shares will be bought through the block market from institutional investors. When any shareholder sells or buys shares, they don't negotiate with the management, said Md Azizur Rahman, company secretary of BATBC.
"So, we can't say much about the purchase currently. After the transaction is completed do we observe the parties."
Since the fund already holds a significant amount of shares of BATBC, it had to make an announcement before it made the purchase, Rahman added.
According to the gross annual report of 2018, the fund holds 9.99 % shares of BATBC. In April 2019, in addition, it bought 1.37 lakh shares.
As the tobacco company's stock has been on the descent within the last two years, Pictet will need to have thought now was a good time to buy its shares, said another top official of BATBC requesting anonymity.
Coronavirus fears have driven many solid companies' price down, so all on a sudden they became discounted prices for astute investors, said a currency markets analyst requesting anonymity.
"Not absolutely all companies' earnings will be afflicted by coronavirus," he added.
BATBC provided 500 % cash dividend and 200 % stock dividend in 2018. In the last 2 yrs, it provided 600 % cash dividend.
The business's paid-up capital is Tk 180 crore, according to data from the Dhaka Stock Exchage.
In 2018, the business's total earnings rose 14 per cent to Tk 23,312 crore and profit 15 % to Tk 1,001 crore.
In the first three quarters of the existing financial year, its income was up 14.31 per cent to Tk 19,436 crore but its profit was down about 17 % to Tk 647.1 crore because of higher tax incidence.
