CITY UNIVERSITY

                                                              

Assignment on

MAKE SOME PORTFOLIOS FOR INVESTMENT IN

THE SECURITIES MARKET IN PERSPECTIVE OF
BANGLADESH
Org: Dhaka Stock Exchange Limited
Course Title: Security Analysis and Portfolio
Course Code: FIN-402
Prepared for:

Udayshankar Sarkar
Lecturer

Department of Bachelor of Business Administration

City University

Prepared by:

AL-Mamun
ID no: 181471514
Batch: 47
Campus: City Campus
Date: 15-03-2021
Definition of Portfolio

A portfolio is a collection of financial investments like stocks, bonds, commodities, cash, and
cash equivalents, including closed-end funds and exchange-traded funds (ETFs). People
generally believe that stocks, bonds, and cash comprise the core of a portfolio. Though this is
often the case, it does not need to be the rule. A portfolio may contain a wide range of assets
including real estate, art, and private investments. You may choose to hold and manage your
portfolio yourself, or you may allow a money manager, financial advisor, or another finance
professional to manage your portfolio.

Types of Portfolios

There can be as many different types of portfolios and portfolio strategies as there are investors
and money managers. You also may choose to have multiple portfolios, whose contents could
reflect a different strategy or investment scenario, structured for a different need.
A Hybrid Portfolio
The hybrid portfolio approach diversifies across asset classes. Building a hybrid portfolio
requires taking positions in stocks as well as bonds, commodities, real estate, and even art.
Generally, a hybrid portfolio entails relatively fixed proportions of stocks, bonds, and alternative
investments. This is beneficial, because historically, stocks, bonds, and alternatives have
exhibited less than perfect correlations with one another.

A Portfolio Investment
When you use a portfolio for investment purposes, you expect that the stock, bond, or another
financial asset will earn a return or grow in value over time, or both. A portfolio investment may
be either strategic—where you buy financial assets with the intention of holding onto those
assets for a long time; or tactical—where you actively buy and sell the asset hoping to achieve
short-term gains.

An Aggressive, Equities-Focused Portfolio

The underlying assets in an aggressive portfolio generally would assume great risks in search of
great returns. Aggressive investors seek out companies that are in the early stages of their
growth and have a unique value proposition. Most of them are not yet common household
names.

A Defensive, Equities-Focused Portfolio

A portfolio that is defensive would tend to focus on consumer staples that are impervious to
downturns. Defensive stocks do well in bad times as well as good times. No matter how bad the
economy is at a given time, companies that make products that are essential to everyday life will
survive.

An Income-Focused, Equities Portfolio

This type of portfolio makes money from dividend-paying stocks or other types of distributions
to stakeholders. Some of the stocks in the income portfolio could also fit in the defensive
portfolio, but here they are selected primarily for their high yields. An income portfolio should
generate positive cash flow. Real estate investment trusts (REITs) are examples of income-
producing investments.

A Speculative, Equities-Focused Portfolio

A speculative portfolio is best for investors that have a high level of tolerance for risk.
Speculative plays could include initial public offerings (IPOs) or stocks that are rumored to be
takeover targets. Technology or health care firms in the process of developing a single
breakthrough product also would fall into this category. 

Securities the Company

I have mention the 4 sectors are: Bank, Textile, Pharmaceutical and Chemical, Fuel and Power
have taken the data.

Sector 1: Bank

We have selected 7 companies from the bank sector, ranked them by consideration of the factor
of fundamental tools.

SN Company Current EPS- P/E ratio Sponsor Cash NAV Rank

Name share Basic (Using Share Dividen per
price (Half Basic EPS Holding d Share
Yearly) Based on Percentage
Audited
Financial
Statement
)
1 City Bank 39.50 2.180 8.45 31.03 24% 27.98 4
2 United 21.70 1.250 8.76 30.96 15% 24.50 5
Commercia
l Bank Ltd
3 Dutch 124.80 7.100 8.8 87.00 30% 88.30 1
Bangla
Bank Ltd
4 Islamic 34.30 1.800 9.58 44.45 10% 30.34 6
Bank
Bangladesh
Ltd
5 Mercantile 23.20 2.030 7.71 39.98 15% 22.75 3
Bank Ltd
6 One Bank 23.10 1.900 6.32 30.02 13% 18.95 2
Ltd
7 Prime Bank 23.20 .850 10.85 37.95 16% 24.57 7

Sector 2: Textile

SN Company Current EPS- P/E ratio Sponsor Cash NAV Rank

Name share Basic (9 (Using Share Dividen per
price Month) Basic EPS Holding d Share
Based on Percentage
Audited
Financial
Statement
)
1 Shasha 71.90 3.790 9.52 46.52 25% 44.86 2
Denims
Ltd
2 Aegon 35.00 2.700 8 38.95 10% 27.10 1
Denims
Ltd
3 Envoy 38.5 1.410 16.67 45.59 12% 38.75 6
Textiles
4 Evince 22.20 1.150 9.87 36.67 10% 17.13 4
Textile
Ltd
5 Fareast 25.40 1.350 12.9 71.05 5% 21.37 5
Kniting
&
Dyeing
Industries
Ltd
6 Hwa 38.20 1.540 18.42 50.83 15% 27.56 7
Well
Textile
(BD)Ltd
7 Square 66.90 1.940 9.53 62.15 25% 45.13 3
Textile
Ltd

Sector 3: Pharmaceutical & Chemicals

SN Company Current EPS- P/E ratio Sponsor Cash NAV Rank
Name share Basic (Using Share Dividend per
price (9 Basic EPS Holding Share
Month) Based on Percentag
Audited e
Financial
Statement
)
1 ACI Ltd 520.10 16.620 6.33 44.45 115% 443.72 1
2 Beximco 112.00 4.030 14.64 13.18 15% 56.70 4
Pharmaceutical
Industry Ltd
3 The IBN SINA 247.60 7.140 21.5 44.38 37.50% 38.72 6
Pharmaceutical
Industry Ltd
4 Square 285.70 11.390 16.56 36.34 40% 65.04 2
Pharmaceutical
Industry Ltd
5 Renata Ltd 1137.70 30.190 18.14 51.16 85% 206.61 7
6 The ACME 117.00 5.420 18.05 39.95 35% 77.34 3
Laboratories
Ltd
7 Global Heavy 41.00 0.800 22.43 69.03 15% 53.20 5
Chemicals Ltd

Sector 4: Fuel & Power

SN Compan Current EPS- P/E ratio Sponsor Cash NAV Rank

y Name share Basic (9 (Using Share Dividen per
price Month) Basic EPS Holding d Share
Based on Percentage
Audited
Financial
Statement
)
1 Baraka 44.70 2.40 16.87 19.91 15% 19.86 3
Power
Ltd
2 Khulna 61.20 3.910 6,24 70.59 75% 24.63 1
Power
Compan
y Ltd
3 Padma 249.00 14.290 13.01 00.01 100% 92.92 4
 Oil CO.
Ltd
4 Summit 40.70 2.830 11.64 56.00 12% 28.73 2
Power
Ltd

Portfolio Formatting
The investment of 10000000 Tk. In eleven companies to make profit by diversified portfolio.
The total amount has been distributed according to our own choice. So the weight, share price,
number of share and total amount are given as following table:

S.N. Company Name Wight Share Price Number of Total

Share Amount (TK)
1 Dutch Bangla 5% 124.80 4006 500000
Bank
2 Once Bank Ltd. 5% 23.10 21643 500000
3 Mercantile Bank 5% 23.20 21551 500000
Ltd
4 Argon Denims 15% 35.00 42.857 1500000
Ltd
5 Shasha Denims 10% 71.90 13908 1000000
Ltd
6 Square Textile 10% 66.90 14948 1000000
Ltd
7 ACI Ltd 10% 520.10 1923 1000000
8 Square 10% 285.70 3500 1000000
Pharmaceutical
Ltd
9 The ACME 10% 117.00 8547 1000000
Laboratories Ltd
10 Khulna Power 10% 61.20 16340 1000000
Company Ltd
11 Summit Power 10% 40.70 24570 1000000
Ltd
Total = 100% = 10000000
Chart to Portfolio Formatting

Dutch Bangla Bank

One Bank Ltd
Mercantile Bank Ltd
Argon Denims Ltd
Shasha Denims Ltd
SquareTextile Ltd
ACI Ltd
Square Pharaceutical Ltd
The ACME Laboratorios Ltd
Khulna Power Company Ltd
summit Power Ltd

Recommendation for Security Analysis and Portfolio Formation

After analyzing different securities for portfolio formation, we can recommend the
following issue:

1. The lower P/E ratio of the security should be considered when ranking the
company`s security. If the P/E ratio is more than 25 the security of the
company should not take for ranking.
2. There other factor, price should be considered to rank the security. The
lower current price should be considered.
3. In the share holding pattern, if there is no sponsor shareholding percentage,
the security of the company should not consider.
4. We should consider the higher EPS, higher cash dividend and analyzing
security for portfolio formation.
5. No one should invest only one sector though the performance of the
fundamental analysis of the securities is positive. We should diversify the
investment in different sector to reduce risk.
Conclusion

The portfolio is mainly done to reduce the risk. Our present market has faced a
huge crash recently. So investing in the share market may seem insane. But by
doing fundamental analysis we have shown in our report that our selected shares
are attractive to invest. All financial indicators are giving green sign to invest to
those share. So by hoping the best we are introducing this portfolio which will be
higher monitored and highly analyzed. If the market is steady and the industry
where we are investing is good we will be able to generate higher return.