FIN254 Project FAQs

I received a considerable number of queries regarding the project in the past few days. I am posting some of them with answers in the following in case you have similar queries… And please read these first before asking me a question.

Q: Sir, you said that for all the shares the investment period should be 10 years but some shares ‘(janata insurance etc.) Closing date is October 30 2008 instead of December 30th. So in the auto calculation worksheet the investment period is shown 9.8 years. Should I leave it like that or manually change the investment period to 10.

Ans: Please search for the price data using both full name of the company (in some cases also look for a changed name for a company, especially when you see price data missing for a period) and ticker (the abbreviated form which is used in DSE website to quote a price) of that company. In your case, you probably did not search price data using the ticker of the company, which is ‘JANATAINS’.

Q: Sir, I am facing problem regarding the findings part. Can you send a sample please?

Ans: There is no such sample. This is a subjective part of your project. You are independent to discuss about your findings in any way you feel appropriate. This is your own findings. Use your imagination, please!!! 

Here is a guideline… You may talk about your investments in five companies. Compare the performances of the companies you invested in. Tell me which companies gave you better returns and what may be reasons (probably they gave higher dividend regularly etc.) and which companies could not give a decent return and why (may be they were irregular in their dividend payments or they never gave any dividends at all etc). What may be your recommendation (choosing a right company for investment) to a new investor in the capital market based on your findings and learning from this project?

Q: I honestly do not know what cumulative return or average periodic return say about a particular share. Could you please help me?

Ans: Let me use the example (Al Arafa Bank) I provided you as a sample. The cumulative return was 1944.38%. It means your investment grew nearly 2000 percent or 20 times in the past 10 years, indicating one taka of your investment grew to twenty taka in 10 years! Similarly periodic return of 194.44% means, nearly 200 percent or 2 times average growth every year!

Q: Sir, I am not sure about the DAD PART OF the dividend information regarding the year 1999 and 2000. How can I provide the exact date for these two years?

Ans: Unfortunately, the DADs (dividend announcement or declaration dates) for 99 and 2000 are not available. That's why we need to estimate those dates based on 2001 and 2002 DADs by taking the average of them. 

Q: All the price data follows month/date/year format, right? but DSE Monthly Review listed the last AGM as Date/month/year. We have to change only this date right?

Ans: When you insert a date in excel, instead of writing the date with slash sign (for example, 12/02/08) right in full format (for example, 12 feb 08), excel will take care of the rest.

Q: Sir, I am facing a problem regarding project. One of my assigned share is BIFC (Bangladesh Industrial Fin. com. Ltd.). The problem is in resource "02_DSE Monthly review dec2008", BIFC is not there. So how I will fill up "Basic" in Excel template?

Ans: It's there! It's BD. Industrial Finance Co under 'BANKS' sector. Please put a little more effort!!!

Q: Sir, I would like you to send me the files containing Company Monthly Review and Company Web Site 1 jan 2009. These two particular files which you have provided in the resource are not opening thus causing delaying in processing the project progress.

Ans: I think there is no problem in those files. These two particular files are in 'RAR' format, a compressed file format. You need to ‘un-rar’ them before you can use the files. For that you need to use RAR type of software (for example, winrar) which is freely available online. Use that software to open them and use the files. I have added a ‘winrar’ software free version in the resources (both lab and online) for your convenience.

Q: I am not sure of the term 1B:5 of B/R column. Will you please explain it sir?

Ans: 1B:5 means 1 bonus share against 5 shares which is equivalent to 20% bonus share. Similarly 1B:2 would mean 50% bonus share.

Q: Sir, if 1B:5 is 20% bonus issue. Then how do we calculate the bonus % for 1B:7 and 1B:14? The percentages are in decimals; however when the value is filled in the dividend cell it is automatically converted to a whole number, for e.g it changes from 14.28% to14%. Is this correct?

Ans: You are correct. 1B:7 and 1B:14 are equivalent to 14.29% and 7.14%. Don't bother about the auto-rounding. Formula will take decimals into consideration.

Q: I have problem in BIFC which has no dividends. In analysis it shows invalid & has no first issue price. Where do I put the beginning value? 

Ans: Please look at the dividend file carefully. BIFC announced following dividends

Cash Dividend of 15% on 15-04-07 and
Cash 10% & Stock 10%B on 09.04.2008.

Moreover, BIFC was listed with DSE in November 2006. So, you will not get any trading information before that. In the trading data table you will have no values from 1999 to 2005. Use "15-Nov-08" (as it is the first trading day for BIFC) closing price which is 189.75 (you can get it from price data excel file). Then put the other closing price values under that accordingly.

For the Auto-Calculation worksheet: As this stock started trading from 2006, you need to put the initial investment amount of 1,00,000 in 2006 (Cell No. B11), not earlier. Hope you will be able to get this right. 

Q: Sir, if the 3rd month from the cash dividend declared date is after Dec 2008 then what I should do as price data is not available after 2008 and that is beyond the investment period.

Ans: You may leave it blank if the DAD is in December 2008. Otherwise, you may use 30-December-2008 (or last trading date of December 2008) data as the 3RD Month data. Please DO NOT assign zero, because it would be a wrong information and would be a problem for auto-calculation.

Q: Sir, I am having some problem with the project. For Desh Garments last CP given is of 14-12-02. Should I take it as the end CP of DEC 2002?

Ans: Yes, you are correct. End of Dec closing price of a script in any year does not necessarily mean trading on the last day of December of that year. Your project requires you to pick the last closing price in a particular year. If a particular script was last traded on the 14th of Dec in 2002, then let it be. Use that to be the Year-end closing price. You may even find a script which was not at all traded in the month of December. In that case, the Year-end closing price might be the closing price of last trading day, even if it was in Nov or earlier. 

Q: Sir, Do I include D.A.D(9/17/2001), Cash (0), 3RDM(Dec)? 

Ans: For a zero/nil cash dividend, you don't need to put close price of the 3rd month. 

Q: Sir, I have seen the company listing information of UCBL on the DSE Website and it shows that they have declared a 30% Bonus issue for 2001 but I cannot find the declare date any where for it. So, I could not include the 30% bonus issue in the excel file for UCBL without that date.

Ans: The declaration date is right there in the dividend file! It's 30%B (2001) announcement date 05.08.2007. I don't know why/how you missed it! Announcement date is not important in case of stock dividend for our project. However, it's important for cash dividend.

Q: Are we just required to comment on the cumm. and average return for the various companies in the word file? Do I mail you both the excel and the word file (softcopies) only?

Ans: Exactly! You are required to discuss the findings and compare stock performances in the word file. You should email me six files: five excel files (one for each stock) and one word file with the discussion.

Q: What do "1B:4,1R:2", "5%(1B:20)" and "35%B,1R:2" mean? I know what individually 1B:4 means and what 30%B means, but i don't know what the "R" term means and how to interpret them together.

Ans: They mean the same thing together. For example, "1B:4,1R:2" means 1 bonus share against 4 shares (or 25% bonus share) and 1 right share for 2 shares (or 50% right share). When the companies announce this type of declaration, they also announce different record dates for bonus and right shares to be effective. To learn more you may browse through the news section of DSE website.

Q: What do you think about my stock .........? I am having this type of problem with it? What to do with it?

Ans: Please don't use the blog to ask me specific share related problem. In that case, email me directly. It's not practical to post solutions to hundreds of such individual stock related problems here. Hope you would understand. Thank you.