FIN254: Q/A Session

Q: Can you please clarify us about the final exam syllabus again?

Ans: According to the decisions made centrally by the FIN254 coordination committee, final exam must be comprehensive covering the whole syllabus.

MCQs are made centrally, so I don't have any control over it. Questions may be from anywhere, not necessarily from our book as different faculty members use different books in their sections. But as everyone follows same set of topics, you don't need to worry if you cover the things discussed in the class.

As far as problems are concerned I will prepare them considering all the chapters we covered in class. For convenience I am making it simplified - no problems beyond chapter-10, there will definitely be a large problem from chapter-10, one problem from chapter-8 on stocks, some problems covering time value of money concept and financial statement analysis.

Q: Sir, my project files are huge in size and I am having genuine problem sending them to you with slow internet connection. What should I do?

Ans: I don't know what to say. The file size should not be that large. I have received many project files so far and the file size ranged from 100+ KB (kilobytes and not megabytes!) to 300+ KB. There is something wrong either in your operating system or the software itself.

Try "Save As" option to save them again in previous excel version, that is, xls (Excel 2003) format and check your file contents and the size. If that works, send them to me. If same problem remains, you may bring the files with you in a flash-drive/pen-drive during exam time and give it to me.

Marksheets Uploaded!

The marksheets are now available using the course folder links above. If you face any problem opening the files using your browser, please use MS Internet Explorer to open them. More updated marksheets containing other marks will be available after checking final exam scripts and project files.

If you find any problem with your recorded marks, please send an email to my TA (nabila_nisha@yahoo.com) and a copy to me [CC: imran.edu@gmail.com] giving details of the problem.

Thanks.

FIN254 Project FAQs!

This post contains answers to the questions related to FIN254 Project that I receive from FIN254 students. I will continuously update this post until the project due date. So, please check this from time to time to be updated, in case you may have a similar query.

Q: Sir, in my ORIONINFU project there is no EPS in audited or unaudited earnings, there is only net profit for every period. So, how I am going to find out the EPS?

Ans: You can get latest number of shares and other information of a company directly from the DSE website. You may use the following link for Orion Infusion.

http://www.dse.com.bd/displayCompany.php?name=ORIONINFU

You may also view information of other listed companies by just replacing the stock ticker "ORIONINFU" by any other stock ticker after the equal sign (=) at the end of the above link.

Q: Sir, I didn’t understand this news “Khaleque Knitting & Garments Inds. (Pvt.) Ltd., one of the Corportate Sponsors of the company, has reported its intention to sell 15,00,000 shares out of its total holdings of 39,60,000 shares of the company at prevailing market price through Stock Exchange within next 30 working days.”

Ans: Apparently Khaleque Knitting is a name of a sponsor (corporate sponsor because it is a company, not a person) that contributed to the paid up capital of the company you are working on. Out of its total holdings (all the shares it owns) of 39.6 lac shares, it wants to sell 15 lac shares. As per regulation, before buying/selling shares a director/sponsor director must notify the regulator and the public of its intention.Q: In the Stock Quotes file, i don’t have the records at all for MEGHNACEM and SINGERBD. Apparently there are no records at all after "K". What should I do?

Ans: Please check the stock quote file carefully, it is probably not complete or you converted the file from xlsx (excel 2007) format to xls (excel 2003) format.

Q: In some cases Un-Audited half yearly, there is only Net Income figures stated w/out the EPS values given at all. Even when I went to DSE company listings on the website, there is no figures or tables for such information. Should I completely skip the part for that given period?

Ans: If you don't have eps figures for a period you can use the other eps declarations (previous or next) and find number of shares and adjust that numbered with right or stock dividend declared in between and calculate the eps by dividing net profit by number of shares.

Q: Is it possible to "Import News" or obtain the relevant information regarding News Reader at all? If so how?

Ans: Yes, you may import latest news to the offline news reader. You need to create a “news.txt” (a text file) file within the same folder and paste all the news (you may get it from DSE official website’s news archive section) you want to incorporate and press the “import news” button.

Q: Is news such as "no price limit on the trading of the shares on __date" price sensitive news"?

Ans: No, this is not a price sensitive news by itself! Such a news always accompanies a price sensitive news, especially a news with recommended corporate benefits.

Q: As u have shown on Sample of ABBANK file, should we comment for a few news dates collectively or each news date will have separate comments?

Ans: It depends! If you think analyzing multiple news would make more sense then you may do it, otherwise interpret them separately.

Q: Can u plz re-clarify "Instant Real Effect" and "Long term Real Effect"? when will instant effect be positive?

Ans: Instant real effect would be positive if you see price increase on the news day or the next day (because sometimes companies disclose the news after the trading hour, in that case, reaction for the news would be seen on the next day’s trading). Long term would be when price gradually increases over a period of time (it may be a month or more, if there is no other price sensitive news in that period).

Q: The Board of Directors of ICB has recommended cash dividend @ 14% for the shareholders of ICB for the year 2006-2007. Date of AGM: 30.10.07, Time: 11:00 AM, Venue: BIAM Auditorium, 63 New Eskaton, Dhaka. Book closure: 16.10.07 to 30.10.07.

Sir should i consider the cash dividend of 14% a poor dividend and right negative in the cell of possible impact?

Ans: Please look at the dividend payment history and compare with them. With relatively very high premium, right share declaration may be a bad news.

Q: Sir, is this a price sensitive “As per latest share demat status intimated by the company, 51.65% shares of general public has been demated up to 04.06.09. Considering this, trading of the shares of the company will resume today.”

Ans: It depends on the situation.. how long the share had been held up from trading... if it was for too long then short term effect may have negative impact on price as many would want to realize their money by selling their shares. Otherwise usually it is a good news that from now on shares of this company would be traded electronically, no longer paper-based, so many investors would be interested to invest... price may go up...

Q: Is the following news for right share declaration? If it is not then how will I understand which specific news is indicating the declaration of right shares?

“Following the change of the denomination of shares and market lot with effect from 25.07.07 (record date), the new face value of the share of the Bank will be Tk. 100.00 instead of Tk. 1000.00, market lot will be 50 shares instead of 5 shares and the new adjusted closing price of shares will be Tk. 382.50 per share.”

Ans: No, this is not a right share declaration. This is a share split news. The company has changed the denomination of it’s share’s face value from 1000 taka to 100 taka. After the mentioned record date, shareholders having 5 shares (with 1000 taka face value) would own 50 shares (with 100 taka face value). Usually share split news is considered a positive one.For right share news, the company would specifically mention they are issuing right shares. For example, look at EBL news on “02/04/2008” (initial recommendation) “18/11/2008” (approval news from SEC) for a 50% right share declaration at par. For another example, look at BRACBANK news on “29/01/2008” where they recommended both stock and right (20% right with 400 taka premium) in a single news.

Q: What does demat mean? Is it a positive news or a negative news for a company that intends to go for demat? 

Ans: Dematerialisation (Demat for short) is a term used for converting physical (paper-based) share certificates to a de-materialised or electronic form share. 

It is indeed a positive news for a company. For a paper-based share, an investor has to go through the name transfer procedure (which is a lengthy and painstaking process) to be eligible for the corporate benefits (cash or stock dividend or right share etc.) announced by the company. For a demat share (electronic share) investors do not need to go through such a procedure.

Q: Sir when the book closure date is given like 16/10/2007 to 30/10/2007 then which one should we use.

Ans: Please consider the starting date to be the record date. The term “Book Closure” is used for paper based shares whereas “Record Date” is used for electronic shares. Paper shares take more time than electronic shares because they update the registered shareholders list manually. That’s why you see a duration is given for paper-based shares instead of just one record date for electronic shares. Only shareholders whose names appear on the register after the book closure/ Record Date are eligible to attend in the AGM/ EGM and also to receive dividends & bonus shares and entitlement to right shares, if any.

Q: As per un-audited half yearly accounts as on 30.06.08, the Company has reported profit after tax of Tk. 38.80 m with EPS of Tk. 9.70 as against last years half yearly of Tk. 31.01 m and Tk. 7.75 respectively.  

Sir, the above mentions about an un-audited half yearly profit. Do we treat it as positive news? Is the treatment same as that of an audited profit?

Ans: Yes, this should be treated as a positive news because their half-yearly earnings increased by 25%.

You may also compare double of this (the projected EPS = 9.70 * 2 = Tk. 19.40 per share) with the audited yearly EPS they disclosed for the previous period in your analysis.

Q: Have you uploaded the selected lectures on resource drive?

Ans: Powerpoint slides of selected chapters are made available to the resource drive and you may also download them using the blog link.

Q: Though I have office 2007, I am not being able to open the Xl files.

Ans: I don't know why you are having problem with the project files. Make sure you have MS Excel 2007 installed in your computer. You may also try downloading the files again. If you still face the problem get the files from my office.

Job Opportunity in UAE!

A well known HR Consulting firm in Bangladesh has been recently appointed to recruit 40 graduates in the field of finance for a UAE based remittance company. A word document file containing the details of the job has been made available in the “Others” folder link above. 

Fresh graduates are encouraged to apply. You may also ask your friends or relatives if they are interested. 

Thanks and Regards.

Correction in Assignment#7 for ACT201

I made a mistake when uploading the assignment file to the resource drive. The correct problem numbers would be P17-3A & 11A for the assignment and the submission due date is 24th of August (Monday).

Sorry for the inconveniences caused.

Final Exam Schedule

The schedule for the final exams has been announced by the Registrar's Office.

ACT201 : 28-Aug-09 (Friday) at 8 am (NAC301 & NAC311)

FIN254 : 31-Aug-09 (Monday) at 8 am (NAC415)

Thanks.

Change of Class Time during Ramadan

This is notified for information of all concerned that there will be no change in class time schedule for the undergraduate students during the holy month of Ramadan as announced earlier. 

Please follow this link to view the official notice.

Sorry for the inconveniences this may have caused.

*********** Previous Post **********************

Effective from 22nd of August, 2009, classes would start from 2 pm and 3:30 pm instead of 2:40 pm and 4:20 pm respectively. There is no change for the 8 am classes.

Thanks.

FIN254 Project for Summer 2009

The main purpose of this project is to analyze the impact of disclosed news on the price of a stock. The time period for the analysis is from January 2007 to June 2009. Sometimes you would see price moving positively (or negatively) with positive (or negative) news as expected. Some other times you would see price not moving as expected rather going to the opposite direction (or consolidating) because the news was probably out before it was disclosed. Carefully review such news impacts on the price movements of your stock and put your findings accordingly.

You must do this job using the format and guidelines prescribed in the word document file named “Project Instructions.doc” made available to help you complete the project. Three stocks have been assigned to each student and the assessment would be done for each student individually. If anyone of you don’t see your id in the assigned stock list, inform me immediately.

Please download all the resource files from the project folder available within the FIN254 folder link above. Same resource files are also available on the resource drive accessible from the on-campus computer labs.

Before you start the project work please open and verify all the resource files to check whether there is any problem opening/accessing them. You need to prepare three excel files (one per stock) for the project. Please review the sample file (Sample-ABBANK.xlsx) by checking each worksheet to understand the nature of the job you are assigned to do for the project. You need to prepare three such project files for the three assigned stocks.

Send the completed project files (three excel files, one for each stock assigned to you) as three attachments by the due date 25th of August, 2009 (Tuesday). That means you may send your completed project files earlier if you can finish early. Make sure to include your email address too, so that you have a copy of the sent email. Please refer to the guideline provided in the word document file for detailed format of your email to be sent to me.

Before sending me the email please recheck your data and files minutely. I won’t be able to accommodate your request of accepting a modified version next time. And please don’t send me multiple emails to make sure I get it!

Please wait at least one day for email acknowledgment from me as a confirmation of my receipt of your email. If you don’t receive my acknowledgment by one day then resend the email to me and notify my TA. Please keep checking your email frequently around that period because I will send you an email if I find significant problem in your work/files.

If you have any question then you may see me at my office during the office hours or send me an email or post it in my blog. Please READ all the instructions carefully before sending your project as email attachments. Check your work carefully before sending it to me. I would not be able to accept a modified version second time.

Thank you and wish you best of luck for the project.

Different Real 7 Wonders!

I made a video file available in the 'Others' link. If you have time, please have a look. It is really a beautiful piece - a touching and inspirational one.

Thanks.