Banks cannot have record dates during shutdown: BSEC

Listed companies which had their record dates during the shutdown have to announce record dates again as per the law, the Bangladesh Securities and Exchange Commission (BSEC) confirmed on Wednesday.

"Those companies have to announce the record dates again after the stock exchanges reopen," said Md Saifur Rahman, an executive director and spokesman of the BSEC.

So, shareholders of some companies in the banking sector have to wait for dividends until new record dates are announced after the general holidays end. 

At the beginning of the shutdown, the Bangladesh Merchant Bankers Association (BMBA) appealed to the BSEC, seeking exemption from the law regarding the record date.

The BMBA proposed to consider the last day of transaction at the stock exchanges as their record dates.

"Companies which had record dates when the stock exchanges were open can disburse the dividends after holding their annual general meetings online," said Saifur.

"However, there is no option for considering the last date of transaction at the stock exchanges as the record date. There is also no option for seeking exemption from the law regarding this now," he added.

Requesting anonymity, a Dhaka Stock Exchange director told The Business Standard, "The banks have announced sufficient dividends. But due to the general holidays, investors will not get the dividends before Eid. These dividends would have been very useful to them during the shutdown."

He further said that currently, there are only two people who can take part in the BSEC meeting. Next week, its chairman's tenure will end too. So, new decisions regarding the matter cannot be taken due to a quorum crisis. 

"The commission could have taken a decision regarding this in its last meeting," the director said.

Multinational company LafargeHolcim Bangladesh has postponed its annual general meeting and its record date owing to the general holidays. 

Banks, however, have not postponed the record dates despite postponing their annual general meetings amid the coronavirus pandemic. 

Recently, Brac Bank announced a 15 percent dividend for its shareholder, and June 2 has been fixed as its record date. 

Eastern Bank has recommended a 25 percent dividend, for which May 3 was the record date.

The Uttara Bank Limited has announced a 35 percent dividend for the shareholders, and its record date was April 27.

The NCC Bank has announced a 17 percent dividend for its shareholders and June 1 has been fixed as its record date.

Standard Bank Limited has announced a 10 percent dividend and its record date was April 26.

Bank Asia Limited has announced a 10 percent dividend and April 13 was its record date.

The Mercantile Bank has announced a 16 percent dividend and its record date was April 15, while the Dutch-Bangla Bank announced a 30 percent dividend and April 7 was its record date.

Trading on both the bourses has remained closed from March 26, following the general holidays announced by the government to contain the spread of Covid-19.

Later, the closure of trading was extended till May 16, following extension of the holidays.

This year, the stock market indices were already going through extreme volatility because of a slowdown in exports, concerns over the health of the banking sector, and a turbulent money market.

The novel coronavirus outbreak added to all existing worries in the stock market and triggered a free fall in the last trading period.

The DSEX, the benchmark index of the Dhaka bourse, suffered a 20 percent fall until March 18, but later recovered partially with a 10 percent gain due to the new floor prices.

Before the nationwide shutdown was imposed, the DSEX stood at 4,008 points on March 25.