Technical Analysis of Baraka Power on 5 Feb 2017
This is no buy/sell recommendation - just a trial to see if
Technical Analysis (works to an extent) in Dhaka Stock Exchange.
Baraka Power had a crazy run from 27.5 to around 50 on
increasing volume in 9 weeks only. Probably there is a story – I don’t know of
it yet.
I found the following:
1. It is trying to float IPO of Baraka Patenga Power Limited, a 51% subsidiary Company of Baraka Power Limited (BSEC rejected it in mid '16).
2. Expansion into other business: Diversify business interests, as it ventures in to the global garments industry. They are "aiming to build a world class Leeds Gold Certified Ready Made Garments factory that will house nearly 3000 employees and serve the global market with high quality garments. We have already secured land and we are in the midst of the construction phase of the project. The factory is based in Habiganj, Sylhet; an up and coming industrial zone. We expect to see the factory open in December of 2017 with all being well".
3. As World Bank extended to finance the Patenga power plant through Bangladesh Bank, the company is benefiting from a term finance of USD 21.975 million at lower finance cost than the cost applicable in the Country.
4. It still has a lot of debt although it has reduced its Debt:Equity Ratio from 83:17 in 2012 to 52:48 in 2016.
I found the following:
1. It is trying to float IPO of Baraka Patenga Power Limited, a 51% subsidiary Company of Baraka Power Limited (BSEC rejected it in mid '16).
2. Expansion into other business: Diversify business interests, as it ventures in to the global garments industry. They are "aiming to build a world class Leeds Gold Certified Ready Made Garments factory that will house nearly 3000 employees and serve the global market with high quality garments. We have already secured land and we are in the midst of the construction phase of the project. The factory is based in Habiganj, Sylhet; an up and coming industrial zone. We expect to see the factory open in December of 2017 with all being well".
3. As World Bank extended to finance the Patenga power plant through Bangladesh Bank, the company is benefiting from a term finance of USD 21.975 million at lower finance cost than the cost applicable in the Country.
4. It still has a lot of debt although it has reduced its Debt:Equity Ratio from 83:17 in 2012 to 52:48 in 2016.
Fundamentals: Good but nothing special. It has good profits (slight growth) and EPS (<3) and gives Cash Dividends along with Bonus Shares.
2013
|
2014
|
2015
|
2016
|
1H '17
|
|
Profit
|
188
|
249
|
423
|
439
|
291
|
EPS
|
1.50
|
1.90
|
2.76
|
2.65
|
1.67
|
Dividend
|
10 C + 5% B
|
17% B
|
8%C + 8%B
|
15%C + 5% B
|
|
NOCFPS
|
1
|
-7
|
5
|
5
|
PE ~ 13 is OK while Directors Shares of ~20% is a bit dicey!
Now to the Technicals: It crossed three year high around 40.
Historical High is around 90. There are Supply Zones (which should be weakened
with time) at 50, 54, 58 and 64 (the rest I will ignore).
Now, it is declining on low volume. If it can reverse from a
Fibo level on High Volume – then we might get another Bull Run from it.
I am expecting it to reverse from around 38.5 (stop loss at 35) –
it is for the risk-takers. *(Note: TA is not a Science; it works 60-70% of the time so
don’t be hooked on to the exact numbers – please allow some flexibility).
Let me try to unearth something more from the Fundamentals!!!
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