Authorities will take measures to prevent massive fall of price
FE Report | Wednesday, 16 July 2008
Share trading of Rupali Bank Limited, the top market capitalisation leader of 2006 and 2007, resumes next Sunday on the stock exchanges after remaining suspended for over eight months.
The decision came at a board meeting of the Dhaka Stock Exchange (DSE) held Tuesday.
Trading of the largely state-owned bank shares remained suspended since November 5 last year due to wild price fluctuation over its 'off-again, on-again' disinvestment process.
The price of a Rupali Bank share (face value Tk 100) fluctuated between Tk 3200 and Tk 4720 over a period of 52 weeks before the suspension of the trading.
"The trading of Rupali Bank share will resume next Sunday as a significant number of shares have now been demated, paving the way for its transaction," said Salahuddin Ahmed Khan, chief executive officer of the DSE.
A total of 0.18 million out of 0.60 million publicly held shares has so far been demated, according to the DSE. The demating of share means transfer of paper shares to electronic system.
In the wake of fearing a sharp fall in Rupali Bank share price on resumption of its trade because of its uncertain future, the authorities will take necessary steps to tackle any untoward incident if occurs, sources said.
In May, the DSE in consultation with the securities regulator decided to resume the trade after completion of dematerialisation of at least half of the Rupali Bank's publicly held shares.
But the procrastination in the dematerialisation process coupled with buying offers from Prince Karim Aga Khan, and the owner of the Egyptian mobile phone giant Orascom, Naguib Sawaris, held up resumption of share trading of the bank, the source said.
The government had earlier failed to sell the bank to a Saudi buyer after two years of negotiations.
The disinvestment process of the bank has now been put off due to lower prices offered by the intending buyers.
"Dematerialisation of significant number of the bank shares and shelving of the selling process have facilitated the resumption of its trading in the market," the source said.
On November 5 last year, the DSE and the Chittagong Stock Exchange were forced to suspend the Rupali Bank share trading for an indefinite period to protect the interest of the investors in the event of sharp fluctuation of share prices.
The Rupali Bank, a Z-category issue, accounts for 5.8 per cent of the DSE's total market capitalisation, which is one of the highest among the listed companies.
Around 7.0 per cent of the bank shares are held by general public. It has a total of 12,500,000 shares, each having a face value of Tk 100.
On March 11, after a two-year long negotiation the Advisory Committee on Economic Affairs cancelled the process of Rupali Bank sale to Saudi Prince Bandar Bin Mohammed Bin Abdulrahman Al-Saud.
Meanwhile, the listing sub committee of the DSE will sit next Sunday to decide on listing of ICB AMCL Second NRB Mutual Fund.
ICB NRB second mutual fund will be the 15th mutual fund in the stock market.
Currently, the market has a total of 14 mutual funds worth Tk 866 million only.
ICB NRB second mutual fund raised Tk 1.0 billion while subscription of another mutual fund-- Grameen One: Scheme Two--worth Tk 1.25 billion ended Monday.
However, the subscription of the mutual fund for NRBs will end July 23.
The decision came at a board meeting of the Dhaka Stock Exchange (DSE) held Tuesday.
Trading of the largely state-owned bank shares remained suspended since November 5 last year due to wild price fluctuation over its 'off-again, on-again' disinvestment process.
The price of a Rupali Bank share (face value Tk 100) fluctuated between Tk 3200 and Tk 4720 over a period of 52 weeks before the suspension of the trading.
"The trading of Rupali Bank share will resume next Sunday as a significant number of shares have now been demated, paving the way for its transaction," said Salahuddin Ahmed Khan, chief executive officer of the DSE.
A total of 0.18 million out of 0.60 million publicly held shares has so far been demated, according to the DSE. The demating of share means transfer of paper shares to electronic system.
In the wake of fearing a sharp fall in Rupali Bank share price on resumption of its trade because of its uncertain future, the authorities will take necessary steps to tackle any untoward incident if occurs, sources said.
In May, the DSE in consultation with the securities regulator decided to resume the trade after completion of dematerialisation of at least half of the Rupali Bank's publicly held shares.
But the procrastination in the dematerialisation process coupled with buying offers from Prince Karim Aga Khan, and the owner of the Egyptian mobile phone giant Orascom, Naguib Sawaris, held up resumption of share trading of the bank, the source said.
The government had earlier failed to sell the bank to a Saudi buyer after two years of negotiations.
The disinvestment process of the bank has now been put off due to lower prices offered by the intending buyers.
"Dematerialisation of significant number of the bank shares and shelving of the selling process have facilitated the resumption of its trading in the market," the source said.
On November 5 last year, the DSE and the Chittagong Stock Exchange were forced to suspend the Rupali Bank share trading for an indefinite period to protect the interest of the investors in the event of sharp fluctuation of share prices.
The Rupali Bank, a Z-category issue, accounts for 5.8 per cent of the DSE's total market capitalisation, which is one of the highest among the listed companies.
Around 7.0 per cent of the bank shares are held by general public. It has a total of 12,500,000 shares, each having a face value of Tk 100.
On March 11, after a two-year long negotiation the Advisory Committee on Economic Affairs cancelled the process of Rupali Bank sale to Saudi Prince Bandar Bin Mohammed Bin Abdulrahman Al-Saud.
Meanwhile, the listing sub committee of the DSE will sit next Sunday to decide on listing of ICB AMCL Second NRB Mutual Fund.
ICB NRB second mutual fund will be the 15th mutual fund in the stock market.
Currently, the market has a total of 14 mutual funds worth Tk 866 million only.
ICB NRB second mutual fund raised Tk 1.0 billion while subscription of another mutual fund-- Grameen One: Scheme Two--worth Tk 1.25 billion ended Monday.
However, the subscription of the mutual fund for NRBs will end July 23.