DSE updates PE ratios of 240 companies

A total of 185 out of 240 listed issues, excludingmutual funds, non-demated and z-category shares, have price-earning (PE) ratio between 1.0 and 75, according to the DhakaStock Exchange (DSE) update on PE ratios.

However, the DSE updated the PE ratio of only 25 companies on the basis of their latest audited reports and the rest on the latest un-audited reports.

Most of banks and leasing companies have PE ratios below 75.

"As per directive of the Securities and Exchange Commission (SEC), the companies, the PE ratios of which are 75 or below, are eligible for loan facilities," Dhaka Stock Exchange (DSE) Chief Executive Officer Satipati Moitra told the FE.

"The rules and regulations on loan facilities vary from bank to bank. So a bank can choose any PE ratio below 75 in case of providing loan facilities," he added.

However, several merchant banks said they would rely only on audited reports in case of providing loan facilities.

"We'll not accept the PE ratios based on un-audited reports for providing any margin loan facilities and we've already sent our opinion to the SEC," Sheikh Mortuza Ahmed, Executive Vice President of Prime Bank Limited, told the FE.

The DSE updated the PE ratios based on different quarterly reports as of December 17. The PE ratios of the remaining companies will be calculated after having the clarifications from the companies, a DSE official said.

The DSE got the audited reports only from those firms, which ended their fiscal year on June 30, he added.

The move on PE ratio has been taken after a recent order of the SEC asking banks not to lend to any investor, who will purchase shares of a company, the PE ratio of which crosses 75.

The companies, the PE ratios of which are 75 or below as per audited reports, are: ICB (27.86), Aftab Auto (58.03 under continuous operation and 13.57 when extraordinary profit included), Gemini Sea Food (52.15), Meghna Condensed Milk (57.64), Fine Foods Limited (48.81), Padma Oil (14.39), Power Grid Company Limited (17.04), Sonali Ash Industries (30.69), Saiham Textile (26.24), Mithun Knitting (29.77), Prime Textile (29.65), Metro Spinning (16.23), Kohinoor Chemicals (31.96), Orion Industries (50.51), Marico Bangladesh (26.47), Samorita Hospital (30.42), Daffodil Computers (73.86), The Engineers Limited (1.35) and Savar Refractories Limited (66.38).

The number of companies having PE ratios above 75 based on their audited reports, is 05. They are Bangas Limited (146.33), Bangladesh Plantation (94.02), Hill Plantation (82.24), Imam Button (81.09) and Eastern Lubricant (121.04).

On the other hand, Meghna Pet Industries, Tallu Spinning, Altex Industries, Northern Jute, and Samata Leather Complex have negative PE ratios based on their audited reports.

The companies, the PE ratios of which are above 75 based on un-audited reports, include Bangladesh Industrial Finance Corporation, National Polymer, National Tubes, Rahima Food, Legacy Footwear, Monno Ceramic, Monno Jutex, Standard Ceramic, United Insurance, Purabi General Insurance, BSC, Modern Dyeing, Desh Garments, Dacca Dyeing, Ambee Pharma, Beximco Synthetics, Summit Alliance and In Tech Online Limited.

Mutual funds, non-demated shares, poor performing Z-category companies, newly-listed firms and companies, share status of which has been downgraded or upgraded, have not come under the purview of the recent SEC order.