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FINANCIAL CHRONICLE™ » FINANCIAL CHRONICLE™ » Amãna Bank goes for IPO and listing on the Bourse

Amãna Bank goes for IPO and listing on the Bourse

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Zaiban


Senior Equity Analytic
Senior Equity Analytic
please refer to this link

read the entire PDF file.... and trust me u will appreciate the system and the way of life much better without the racist hate speech promoted by ppl like Jiggy... who use their personal agendas of being dumped by a muslim girl... to make derogatory statements about an entire faith...

http://auscifwp.files.wordpress.com/2013/10/an-introduction-to-islamic-finance.pdf

npp wrote:Not to dig anything up, but what I conclude is that no one really wants to talk about the subject in this thread.
What I asked was a genuine question to explain the business model.

Hanoifortune


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
Pls call these nos for more info,

CSE- 112356456
Acuity partners-112206206
Amana bank-117756756




npp wrote:Not to dig anything up, but what I conclude is that no one really wants to talk about the subject in this thread.
What I asked was a genuine question to explain the business model.

Jiggysaurus


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
@Zaiban wrote:please refer to this link

read the entire PDF file.... and trust me u will appreciate the system and the way of life much better without the racist hate speech promoted by ppl like Jiggy... who use their personal agendas of being dumped by a muslim girl... to make derogatory statements about an entire faith...

http://auscifwp.files.wordpress.com/2013/10/an-introduction-to-islamic-finance.pdf  

npp wrote:Not to dig anything up, but what I conclude is that no one really wants to talk about the subject in this thread.
What I asked was a genuine question to explain the business model.
Asking tough questions about crazy, dangerous (whatever) and belief systems is not hate speech.

Trying to censor questions and criticisms and attempting to impose censorship shows the danger caused by weird belief systems.

Giving a link to a 170 page pdf is a joke and an attempt to hide without clearly answering the questions raised in this thread.

I have asked 3-4 questions as have chinwi, smallville and npp, I have also clearly highlighted the dangers of an IPO based on a barbaric stone age (whatever) law. Why don't you clearly provide answers?

How is anyone going to understand this nonsense which is there in your 170 page PDF?

Amãna Bank goes for IPO and listing on the Bourse - Page 5 Forum_10

Jiggysaurus


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
Here are the list of questions raised on this thread. Members of the (whatever) who support this (whatever) law should answer the questions without giving the phone number to the CSE or posting 170 page pdfs (filled with Arabic nonsense letters).

1)Why is the chairman starting his statement with a religious (whatever) mantharey? Not even BFL or PCH does this in their annual report.
2) Why is a seetu scheme following an ancient barbaric law allowed to raise money from peeple who don't have any knowledge or know the dangers of this law?
3) The employment in this "bank" seems to be based on racism. More than 90% of the directors and senior management are from a specific (whatever). How many Sinhalese and Tamils are employed in this so called bank?
4) Pages 156-160 of the prospectus clearly show that only a certain (whatever) peeples have only been given shares in this seetu scheme. There is not a single Sinhalese or tamil in that list.
So this seetu scheme which is loss making is now asking money from non cult peeples because they are loss making and can't meet central bank capital requirements?


Question from Chinwi
My question is,
If I do not believe in a creator God or follow orders given by such a God, have I got ethical rights to own such an institute which is strongly functioning as per the teachings of such a God ?

Question from smallville
Now tell me, aren't there more Muslim directors in this bank?
Like in any other bank, how many Sinhalese and Tamils are employed in this so called bank? Other banks would not be giving chances to a specific religion or a race but mostly to the knowledge, positive attitudes and thinking an individuals possess. So are we to think that all the above are
comprised of such?

Question from npp
For that I request one of you (I can see many who are familiar with the subject) to tell explain the business model

If these questions can't be answered then we have to draw the conclusion that this is a dangerous seetu scheme based on an even more dangerous stone age law system.

Hanoifortune


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
Scandal-hit Vatican bank publishes accounts for first time


The Catholic Church took another significant step towards greater financial transparency and accountability on Tuesday, when the scandal-plagued Vatican bank published its annual report for the first time.
Net profit at the institution, known as the Institute for Religious Works, jumped more than 325 per cent in 2012 to €86.6m from €20.3m the previous year, “mainly due to favourable trading results and higher bonds values, resulting from the general decrease of interest rates in the financial markets throughout the year”, the report said.
Its balance sheet was €5bn with equity of €769m. It has 18,900 customers and oversees about €6.3bn in customer assets.

This year is expected to be tougher. “Overall, we expect 2013 to be marked by the extraordinary expenses for the ongoing reform and remediation process, and the effects of rising interest rates,” Ernst von Freyberg, the bank’s president, said in a statement.

The bank’s supervisory processes have repeatedly been questioned since Italian prosecutors began an investigation into money laundering at the institution in 2010.

The Moneyval Committee, the Council of Europe’s anti-money laundering agency, gave the bank a mixed assessment last year and is expected to undertake another review by the end of this year.

Reform has accelerated in the past eight months.

Mr von Freyberg, a German lawyer and manager, was appointed in February by pope Benedict XVI shortly before he abdicated. He has hired Promontory Financial, a US group that specialises in improving banks’ regulatory performance.

Then, in June, another scandal broke when a Vatican cleric under investigation for alleged fraud involving the bank, a former secret service agent and a financial broker were arrested in connection with an alleged plot to smuggle €20m into Italy from Switzerland on a government aircraft.

Earlier that month, Pope Francis established a commission to assess how to reform the bank. It has yet to report. He also appointed Father Battista Ricca, a close friend, to be prelate of the institution to help accelerate reform.

In July the bank’s director, Paolo Cipriani, and his deputy, Massimo Tulli, resigned in the wake of the scandals.

The following month a decree was passed assigning a function of prudential supervision to the Financial Information Authority. It extends relevant economic compliance laws to all the structures of the Church’s administration and to other institutions and entities dependent on the Holy See.

The institution stressed in the report that it is not a traditional bank, but sees its mission “to serve the global mission of the Catholic Church by protecting and growing the patrimony of and providing payment services to the Holy See and related entities”.

“We do not serve business customers, and we do not provide loans out of our deposit base, and barely offer loans at all,” Mr von Freyberg said. “We also do not engage in financial transactions such as hedges or swaps with our clients
http://www.ft.com/cms/s/0/065a563c-2a76-11e3-8fb8-00144feab7de.html#axzz2mOBvW9wu

Zaiban


Senior Equity Analytic
Senior Equity Analytic
Extracted from the PDF

Before the details of Islamic modes of financing are discussed, it seems necessary to explain some points concerning the basic principles that govern the whole economic set-up in an Islamic way of life.

Belief in Divine Guidance
The foremost belief around which all the Islamic concepts revolve is that the whole universe is created and controlled by One, the only One God. He has created man and appointed him as His vicegerent on the earth to fulfil certain objectives through obeying His commands. These commands are not restricted to some modes of worship or so-called religious rituals. They, on the contrary, cover a substantial area of almost every aspect of our life. These commands are neither so exhaustive that straiten the human activities within a narrow circle, leaving no role for human intellect to play, nor are they so little or ambiguous that they leave every sphere of life at the mercy of human perception and desire. Far from these two extremes, Islam has a balanced approach to govern the human life. On the one hand, it has left a very wide area of human activities to man's own rational judgment where he can take decisions on the basis of his reason, assessment of facts and expedience. On the other hand, Islam has subjected human activities to a set of principles which have eternal application and cannot be violated on superficial grounds of expediency based on human assessment.

The fact behind this scheme is that human reason, despite its vast capabilities, cannot claim to have unlimited power to reach the truth. After all, it has some limits beyond which it either cannot properly work or may fall prey to errors. There are numerous domains of human life where 'reason' is often confused with 'desires' and where unhealthy instincts, under the disguise of rational arguments, misguide humanity to wrong and destructive decisions. All those theories of the past which are held today to be fallacious, claimed, in their respective times, to be 'rational' but it was after centuries that their fallacy was discovered and their absurdity was universally proved.
It is thus evident that the sphere of work delegated to human 'reason' by its Creator is not unlimited. There are areas in which human reason cannot give proper guidance or, at least, is susceptible to errors. It is these areas in which Allah Almighty, the Creator of the universe, has provided guidance through His revelations sent down to His prophets. On the basis of this approach it is the firm belief of every Muslim that the commands given by the divine revelations through the last Messenger صلى الله عليه وسلم are to be followed in letter and spirit and cannot be violated or ignored on the basis of one's rational arguments or his inner desires. Therefore, all the human activities must always be subject to these commands and must work within the limits prescribed by them. Unlike other religions, Islam is not confined to some moral teachings, some rituals or some modes of worship. It rather contains guidance in every sphere of life including socio-economic fields. The obedience from servants of Allah is required not only in worship, but also in their economic activities, even though it is at the price of some apparent benefits, because these apparent benefits may go against the collective interest of the society.

Jiggysaurus

Jiggysaurus
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
Nice work Hanoi man, typical tactic of hiding, deflecting and running away. When the Vatican bank goes for an IPO we can talk about their problems.

Since you couldn't censor or shut down this thread the points raised remain.

If the questions can't be answered then we have to draw the conclusion that Amana bank is a dangerous seetu scheme based on an even more dangerous stone age law system.

Zaiban


Senior Equity Analytic
Senior Equity Analytic
............ continued

The Basic Difference between Capitalist and Islamic Economy

Islam does not deny the market forces and market economy. Even the profit motive is acceptable to a reasonable extent. Private ownership is not totally negated. Yet, the basic difference between capitalist and Islamic economy is that in secular capitalism, the profit motive or private ownership are given unbridled power to make economic decisions. Their liberty is not controlled by any divine injunctions. If there are some restrictions, they are imposed by human beings and are always subject to change through democratic legislation, which accepts no authority of any super-human power. This attitude has allowed a number of practices which cause imbalances in the society. Interest, gambling, speculative transactions tend to concentrate wealth in the hands of the few. Unhealthy human instincts are exploited to make money through immoral and injurious products. Unbridled profit making creates monopolies which paralyse the market forces or, at least, hinder their natural operation. Thus the capitalist economy which claims to be based on market forces, practically stops the natural process of supply and demand, because these forces can properly work only in an atmosphere of free competition, and not in monopolies. It is sometimes appreciated in a secular capitalist economy that a certain economic activity is not in the interest of the society, yet, it is allowed to be continued because it goes against the interest of some influential circles who dominate the legislature on the strength of their majority. Since every authority beyond the democratic rule is totally denied and 'trust in God' (which is affirmed at the face of every U.S. dollar) has been practically expelled from the socio-economic domain, no divine guidance is recognized to control the economic activities.

The evils emanating from this attitude can never be curbed unless humanity submits to the divine authority and obeys its commands by accepting them as absolute truth and super-human injunctions which should be followed in any case and at any price. This is exactly what Islam does. After recognizing private ownership, profit motive and market forces, Islam has put certain divine restrictions on the economic activities. These restrictions being imposed by Allah Almighty, Whose knowledge has no limits, cannot be removed by any human authority. The prohibition of riba (usury or interest), gambling, hoarding, dealing in unlawful goods or services, short sales and speculative transactions are some examples of these divine restrictions. All these prohibitions combined together have a cumulative effect of maintaining balance, distributive justice and equality of opportunities.

gamaya


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
Anyway the expected returns would have to be similar to that of Amana Takaful. They have not given any dividents. Only sub division and rights to suck up the retailer money.Crying or Very sad Crying or Very sad Mad 

Hanoifortune

Hanoifortune
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
I have never invested in bank shares. I think Sri Lanka banks are not dangerous as Vatican Bank.If you find Amana as a seetu scheme, you may write to finance minister who has approved the bank in Srilanka.If you need more info how they work you may contact those tele nos I gave before.


@Jiggysaurus wrote:Nice work Hanoi man, typical tactic of hiding, deflecting and running away. When the Vatican bank goes for an IPO we can talk about their problems.

Since you couldn't censor or shut down this thread the points raised remain.

If the questions can't be answered then we have to draw the conclusion that Amana bank is a dangerous seetu scheme based on an even more dangerous stone age law system.

Zaiban


Senior Equity Analytic
Senior Equity Analytic
@Jiggysaurus wrote:Nice work Hanoi man, typical tactic of hiding, deflecting and running away. When the Vatican bank goes for an IPO we can talk about their problems.

Since you couldn't censor or shut down this thread the points raised remain.

If the questions can't be answered then we have to draw the conclusion that Amana bank is a dangerous seetu scheme based on an even more dangerous stone age law system.
even if if i put a one page article.. u will not read it.... u r afraid to be faced with the truth.... if u want the truth seek it... don't sit behind a computer screen typing words of hatred...which easily emanates from your heart....

so read atleast the little bit i posted on the thread... from the pdf file....

don't let your laziness and ignorance stop you from learning the truth....

Chinwi

Chinwi
Associate Director - Equity Analytics
Associate Director - Equity Analytics
@ Zaiban,

I appreciate your efforts to tell others about Islamic teachings for proper economy.

Although I am not a follower of the religion (or Srilankan versions of any religion) I feel there are some food for coexistence in the Islamic economy.

Somehow , we can't see those values are really adhered in practice other than by few genuine people these days. ( Especially when they deal with other people.)

By the way, if we come back to the main topic, the Amana bank and its functioning , we have to analyze its ability to perform here before taking any decision to buy at IPO.

My personal feeling is their way of doing business with many unrealistic rules and restrictions alien to the main system is not suitable for small scale investors to put their money to get financial gains.

For big people and the main shareholders, they have many reasons other than monitory gains.

Fresher


Moderator
Moderator
@ Zaiban - thanks for the effort. As for the pdf, I'm sorry I cannot read that right now. All I wanted was to know how Islamic finance and/or Amana bank actually work; how they earn profits and what are their expenses. What is the business that can make this bank turn around?

Apart from this IPO I have noticed that there are other listed companies who have Islamic finances as part of their debt. So I genuinely wanted to know in someone's own words what it is about. Yes I can Google, call the CSE, brokers but posting it in your own words will be beneficial to all who are interested.

As for your two posts, I'm sorry I really don't care what every religion preaches. I have my own principles which I live by. Only thing I want to do in CSE is to make profits. How this company can, is my question. I stopped applying for IPOs for a while so don't bother reading prospectus anymore.

In short, what is the valuation you would give this company and how you would value it?

Zaiban


Senior Equity Analytic
Senior Equity Analytic
in no way am I asking you guys to subscribe to the IPO or don't subscribe.... all i am asking u guys to do is don't get influenced by the  false rumours spread by certain ppl against a religion followed by atleast 1.6 billion ppl globally.... just coz some ppl have personal agendas...

i can't say all ppl follow the system to its true word as many humans do have ulterior motives and follow their desire.... but like u said thre r a few who actually practice it properly...  but do  make the effort  to understand the system... and be able to differentiate between the system and the follower... don't hate the sport coz the player is bad...

I am more than willing to personally explain and help u guys understand the system.... u can PM me... and i am willing to give u any literature for free on Islamic Finance ..... the reason i gave u the PDF... is basically coz it goes into detail on how Amana Bank and Islamic Finance works.... atleast read the two extracts from the PDF.....

....remember just coz a system is in the minority compared to the norm it is not necessarily wrong.... with dialogue and tolerance of each other... we can break most barriers to situations that seem alien to us...Chinwi & NPP good on u guys... thumbs up....  take care... may we all be guided to the truth...aameen!!

Jake Sully

Jake Sully
Manager - Equity Analytics
Manager - Equity Analytics
I don't know what's the problem with these guys. This is an SEC approved IPO.
Why there are so much "demoters" for this IPO?
There are lots of promoters opening threads for dying companies.
Is it because this is going to be the first Islamic bank to be listed in SL?

Apart from that this is the first IPO after a long time. And no doubt it will be oversubscribed.
Twitter went up on the first day compared to FB maybe due to that IPO came after a long silence. And nobody gave a definite valuation for twitter stock at pre IPO including Bloomberg given the complex business model.
So disregarding all the bad comments given for this company, there's a big chance this will go for a run on the first couple of days after listing giving some people handy profits. After all this is a bank offering there shares at 7 rupees.
Isn't it bloody cheap for a bank?
If UK and Germany accept Islamic finance and Hongkong plans to raise sukuk finance, why should SL stay behind.
A quick glance at the balance sheet will tell that it's not worth for 7. But this is 'CSE' and anything can be sold.

Fresher


Moderator
Moderator
@Jake Sully wrote:I don't know what's the problem with these guys. This is an SEC approved IPO.
Why there are so much "demoters" for this IPO?
There are lots of promoters opening threads for dying companies.
Is it because this is going to be the first Islamic bank to be listed in SL?

Apart from that this is the first IPO after a long time. And no doubt it will be oversubscribed.
Twitter went up on the first day compared to FB maybe due to that IPO came after a long silence. And nobody gave a definite valuation for twitter stock at pre IPO including Bloomberg given the complex business model.
So disregarding all the bad comments given for this company, there's a big chance this will go for a run on the first couple of days after listing giving some people handy profits. After all this is a bank offering there shares at 7 rupees.
Isn't it bloody cheap for a bank?
If UK and Germany accept Islamic finance and Hongkong plans to raise sukuk finance, why should SL stay behind.
A quick glance at the balance sheet will tell that it's not worth for 7. But this is 'CSE' and anything can be sold.
If your look at my posts, all I was asking was for an understanding of the business model and the valuation. Don't compare this with Twitter and I had no intentions of applying for Twitter.

If you call this 'demoting' you should read the thread about the previous IPOs including SHL and EXPO where some had seriously warned that at the issue price they were overvalued. Dying stocks are being promoted, yes, and you can see that the same people 'demoting' (as per you) are against those as well.

7/- may be cheap compared to other banks but what's the intrinsic value? I can't deny the fact that this will get over-subscribed. It may even have a run on the first day.

To reiterate, the only things I'm worried about this in the equity thread is how the business works and what's the valuation.

PS: have there been any broker reports on these yet?

smallville

smallville
Associate Director - Equity Analytics
Associate Director - Equity Analytics
@Zaiban wrote:

I am more than willing to personally explain and help u guys understand the system.... u can PM me... and i am willing to give u any literature for free on Islamic Finance ..... the reason i gave u the PDF... is basically coz it goes into detail on how Amana Bank and Islamic Finance works.... atleast read the two extracts from the PDF.....

....remember just coz a system is in the minority compared to the norm it is not necessarily wrong.... with dialogue and tolerance of each other... we can break most barriers to situations that seem alien to us...Chinwi & NPP good on u guys... thumbs up....  take care... may we all be guided to the truth...aameen!!
Thanks for your efforts. Unfortunately I've got no time to read a 170 page pdf, if it was about 5-10 pages, I'd have gladly done that to learn how Islamic finance work. And I dont wanna call any one regarding this and waste their time asking many questions which sometimes lead to lose theirs and mine's temper too Wink

We'd be glad if you could explain how this works in simple terms in brief. What is Islamic Finance, how bank follows it, how they make profits, etc.. are main questions.

yellow knife


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
Dear Zaiban

Your extract about the differences between capitalism and islamic economy is from the book AN INTRODUCTION TO ISLAMIC FINANCE by Muhammad Taqi Usmani. I have completed reading that book.

Now according to this book there are many divisions among islamic scholars. p.117 says " this position is accepted unanimously by all four schools of Islamic law and the majority of the Muslim jurists."

How can there be four schools of thought about one gods teachings on economic aspects.

In page 122 it reads like this " A number of the Muslim jurists are of the view that fulfilling a promise is mandatory and promise is under moral as well as legal obligation to fulfill his promise. "

Well the subject matter of this discussion is about promise to purchase under Murabahah, which is definitely a part of Islamic financing.

Now the last paragraph of Page 122 starts as " Some contemporary scholars have claimed taht the jusrists who have accpted the binding nature of promise have done so only with regard to unilateral gifts or other voluntary payment, but none of them has accepted the binding nature of a promise to effect a bilateral commercial or monetary transaction. However based on a close study this notion does not seem to be correct because the Maliki and Hanafi jusits have allowed Baibil wafa on the basis of binding promises.

What I want to emphasize the Islamic Banking system is not based on one solid thinking and the practitioners can change the way how a transaction can be interpreted from time to time.

Another thing I want to emphasize is about penalizing the defaulters. Once again there are many views on this subject matter.

Thus Islamic Banking system is in the stage of experimenting and with the possibility of changing them as their directors wish and will be a dangerous tool for many poor investors irrespective of their religious views and like under capitalism it will become smart tool for few.

Like to continue this debate with the expectation of learning more and correcting my view as I am just studying myself this subject called Islamic Finance.

However I understand that there are many loopholes in conventional banking and I do see that islamic finance system also have many areas to be clarified and should be under the strict supervision of regulators.

Zaiban


Senior Equity Analytic
Senior Equity Analytic
@smallville wrote:
@Zaiban wrote:

I am more than willing to personally explain and help u guys understand the system.... u can PM me... and i am willing to give u any literature for free on Islamic Finance ..... the reason i gave u the PDF... is basically coz it goes into detail on how Amana Bank and Islamic Finance works.... atleast read the two extracts from the PDF.....

....remember just coz a system is in the minority compared to the norm it is not necessarily wrong.... with dialogue and tolerance of each other... we can break most barriers to situations that seem alien to us...Chinwi & NPP good on u guys... thumbs up....  take care... may we all be guided to the truth...aameen!!
Thanks for your efforts. Unfortunately I've got no time to read a 170 page pdf, if it was about 5-10 pages, I'd have gladly done that to learn how Islamic finance work. And I dont wanna call any one regarding this and waste their time asking many questions which sometimes lead to lose theirs and mine's temper too Wink

We'd be glad if you could explain how this works in simple terms in brief. What is Islamic Finance, how bank follows it, how they make profits, etc.. are main questions.
Dear Smallville

Please refer to this link 1 pager done by Maldives Islamic Bank

http://www.mib.com.mv/blog/guide-to-islamic-banking

ccsentha


Vice President - Equity Analytics
Vice President - Equity Analytics
Can we talk about the subject!!!!!
IPO with a P/E of 43.75 for 2012, (2010 and 2011 company made losses, 2013 up to September they have made losses. Considering the fact that they have made profit in only one financial year, how can they justify a P/E of 43.75? )

I cannot even see any unrelated companies subscribing for this IPO.

ccsentha


Vice President - Equity Analytics
Vice President - Equity Analytics
@Jake Sully wrote:I don't know what's the problem with these guys. This is an SEC approved IPO.
Why there are so much "demoters" for this IPO?
There are lots of promoters opening threads for dying companies.
Is it because this is going to be the first Islamic bank to be listed in SL?

Apart from that this is the first IPO after a long time. And no doubt it will be oversubscribed.
Twitter went up on the first day compared to FB maybe due to that IPO came after a long silence. And nobody gave a definite valuation for twitter stock at pre IPO including Bloomberg given the complex business model.
So disregarding all the bad comments given for this company, there's a big chance this will go for a run on the first couple of days after listing giving some people handy profits. After all this is a bank offering there shares at 7 rupees.
Isn't it bloody cheap for a bank?
If UK and Germany accept Islamic finance and Hongkong plans to raise sukuk finance, why should SL stay behind.
A quick glance at the balance sheet will tell that it's not worth for 7. But this is 'CSE' and anything can be sold.
Mate you don't say a stock is cheap based on it's value. You have to judge their profit making capability and asset quality.

Unfortunately Amana Bank's P/E is 43.75. (they made losses in previous years and are sure to make losses this year too.) which is very very very very very high specially when you factor in that they have made profits only on 1 financial year.

Is there any other stock on the market with a P/E of 43.75?

If they had offered the IPO at 1.3 rs which would be at a P/E of 8, then you can say this IPO is at a cheap.

EPS
2013 - up to September loss
2012 - 0.16
2011 - loss
2010 - loss

smallville

smallville
Associate Director - Equity Analytics
Associate Director - Equity Analytics
At least one guy created an account and has given us his brief thoughts on this, quite a nobal effort, I must say;

http://forum.srilankaequity.com/t31940-some-reflections-on-the-amana-bank-ipo#188158

rdk2874


Manager - Equity Analytics
Manager - Equity Analytics
@ccsentha wrote:
@Jake Sully wrote:I don't know what's the problem with these guys. This is an SEC approved IPO.
Why there are so much "demoters" for this IPO?
There are lots of promoters opening threads for dying companies.
Is it because this is going to be the first Islamic bank to be listed in SL?

Apart from that this is the first IPO after a long time. And no doubt it will be oversubscribed.
Twitter went up on the first day compared to FB maybe due to that IPO came after a long silence. And nobody gave a definite valuation for twitter stock at pre IPO including Bloomberg given the complex business model.
So disregarding all the bad comments given for this company, there's a big chance this will go for a run on the first couple of days after listing giving some people handy profits. After all this is a bank offering there shares at 7 rupees.
Isn't it bloody cheap for a bank?
If UK and Germany accept Islamic finance and Hongkong plans to raise sukuk finance, why should SL stay behind.
A quick glance at the balance sheet will tell that it's not worth for 7. But this is 'CSE' and anything can be sold.
Mate you don't say a stock is cheap based on it's value. You have to judge their profit making capability and asset quality.

Unfortunately Amana Bank's P/E is 43.75. (they made losses in previous years and are sure to make losses this year too.) which is very very very very very high specially when you factor in that they have made profits only on 1 financial year.

Is there any other stock on the market with a P/E of 43.75?

If they had offered the IPO at 1.3 rs which would be at a P/E of 8, then you can say this IPO is at a cheap.

EPS
2013 - up to September loss
2012 - 0.16
2011 - loss
2010 - loss
i agree

smallville

smallville
Associate Director - Equity Analytics
Associate Director - Equity Analytics
@yellow knife wrote:What I want to emphasize the Islamic Banking system is not based on one solid thinking and the practitioners can change the way how a transaction can be interpreted from time to time.

Thus Islamic Banking system is in the stage of experimenting and with the possibility of changing them as their directors  wish and will be a dangerous tool for many poor investors irrespective of their religious views and like under capitalism it will become smart tool for few.
That's peculiar and dangerous, dont you think? Its like we're dealing with an ever evolving system...

@yellow knife wrote:
However I understand that there are many loopholes in conventional banking and I do see that islamic finance system also have many areas to be clarified and should be under the strict supervision of regulators.
In ur view, lets explore a bit of the problems in the conventional systems..

Chinwi

Chinwi
Associate Director - Equity Analytics
Associate Director - Equity Analytics
@Jake Sully wrote:After all this is a bank offering there shares at 7 rupees.
Isn't it bloody cheap for a bank?
OMG !


@smallville wrote:That's peculiar and dangerous, don't you think? Its like we're dealing with an ever evolving system...
If you can ask this from any  person engaged in IT systems development and maintenance for this kind of banking anywhere in the world he will tell you the endless and enormous difficulties they face day by day.

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