Senior Reporter: Some of the companies listed on the Dhaka Stock Exchange (DSE) will change their categories after declaring dividends for the financial year ended June 30. However, even if the category of some companies changes, loans will not be available to buy shares. On the other hand, DSE said that the loans will be matched as the pew of five companies has come down.
Among them, Tamizuddin Textile, Monospol Paper and Paper Processing will be upgraded from ‘Z’ to ‘A’ category. Beximco Limited, Beacon Pharma, VSF Thread and Maxons Spinning Mills will be upgraded from ‘B’ category to ‘A’ category. Tawfiqa Foods has moved from ‘N’ category to ‘A’ category.
If a company does not pay dividend or comes to the main market from OTC market, it is traded in ‘Z’ category. Companies that pay 1 to 9 percent dividends are in the ‘B’ category, those that are newly listed are in the ‘N’ category and those that pay at least 10 percent are in the ‘A’ category.
Beximco Limited paid a 5 percent dividend for the fiscal year ended June 2020. In the fiscal year ended June 2021, it gave 35 percent. Beacon Pharma paid a dividend of 6 percent last year, this time 15 percent.
VSF Thread also paid a dividend of 6 percent last year, this time it paid 11 percent. Maxons Spinning paid a dividend of 2 percent last year, and 10 percent this time. As a result, four companies will be upgraded from ‘B’ to ‘A’ category.
On the other hand, Tawfiqa Foods has declared dividend for the first time after being listed. It will also be upgraded from ‘N’ to ‘A’ category as 11 per cent dividend has been declared.
Even if you change the category, you will not get a loan
Several more companies have changed categories. Alhajj Textiles will rise from ‘Z’ to ‘B’ category as it pays 1 percent dividend. OTC returns Tamizuddin will rise from ‘Z’ to ‘A’ category as he pays 20 per cent dividend on textiles.
On the other hand, paper processing and monospol paper will be promoted to ‘A’ category as 10 percent dividend has been declared. However, they will not get a margin loan due to its high price-to-earnings ratio or high PE ratio.
According to the latest quarterly report, Alhaj Textile has a PE ratio of 575, Tamizuddin Textile has a PE ratio of 53.98, Monospool Paper has a PE ratio of 156.6 and Paper Processing has a PE ratio of 61.04. As a result, none of these will be eligible for a loan.
Dividing the company’s share price by its earnings gives a PE ratio. The quarterly accounts are published every three months. This ratio is obtained by converting the share price by converting it into full year earnings.
For example, paper processing earned 69 paise per share in the first quarter. If you earn this, the income in four quarters is 3 rupees 18 paise. The share price of the company is currently 192 rupees 90 paise. Dividing it by 3 rupees 18 paise gives a PE ratio of 71.04.
That’s why five companies will get loans
In the first quarter of the current financial year, from July to September, Beximco showed earnings per share of 4 rupees 11 paise. The share price of the company is now 146 rupees 10 paise. As such, the PE ratio is 9 decimal zero 1.
Tawfiqa Foods reported first quarter earnings of 40 paise. The company’s share price is now 33 rupees 50 paise. As such, the PE ratio is 20.94. VSF Thread showed earnings of 40 paise in the first quarter. The share price of the company is now 20 rupees. As such, the PE ratio is now 12.5.
Maxons Spinning Mills showed earnings per share of 65 paise in the first quarter of the current financial year. The share price is now 23 rupees 50 paise. As such, the PE ratio is now 7.63.
Beacon Pharma earned Tk 1.52 per share in the first quarter. The share price is now 235 rupees 20 paise. As such, the PE ratio is now 36.6 points. In other words, if Beacon Pharma’s share price rises a little more, the company will not get a margin loan if it is specifically 243 rupees 20 paise, unless their earnings jump in the second quarter.
Source: Daily StockBangladesh by www.dailystockbangladesh.com.
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