Titas stock bids go dry
Kayes M Sohel | Thursday, 3 July 2008
The state-run gas distribution company Titas failed to sell any single share of it on its debut trading day as it ignored the best prices offered by the investors causing resentment among them.
This is the first ever incident in the history of the bourses in the country that any listed company could not sell any share on the first trading day.
As per regulations, the investors in the first ten minutes of the first trading day made the buying offer, considered the price building period and quoted Tk 360.25 as the highest price and Tk 349.00 as the lowest price after the price building period against the face value of Tk 100 a share.
But during the price building period lasting first 10 minutes the investors offered prices ranging from Tk 1,000 to Tk 512, but immediately they withdrew the offers.
Thereafter from the 11th minute the ICB Securities Trading Co. Limited, the selling agent of Titas, was supposed to start selling shares at the best offered market price.
But instead of selling shares at the best-offered prices, the selling agent offered a price of Tk 750 a share.
The failure to sell any single share of the issue has created a difficult situation as trading will remain closed on the third day to allow the market to distribute shares traded in the first two days.
When asked to comment on whether the regulations were violated by not selling the shares on the first day, Securities and Exchange Commission (SEC) chairman Faruq Ahmad Siddiqi told the FE, 'As the trading has been held under regulations of the bourses, so they can better answer about the matter.'
When contacted, Dhaka Stock Exchange senior vice president Saiful Islam said, 'Really we are concerned about the issue.'
'But we formally informed the securities regulator of the matter and we are closely monitoring the situation,' he added.
Sources said the SEC also called an emergency meeting on the day and decided to observe the situation today (Thursday).
Many investors phoned the FE and vented their anger as the authorities concerned did not sell shares at the best-offered prices as per regulation.
Like many investors, Aminur Rashid, apparently fretted about the matter, told the FE, 'The price offered by the ICB mismatches the fundamentals of the company if the net asset value is taken into account.'
'Surprisingly enough, they themselves, who talked about fundamentals, tantalised the general investors,' he said, adding that they deliberately have done this just to swindle the investors as they did in debut trading of two state-owned oil companies.
Chairman of Petrobangla, the parent company of Titas, Jalal Ahmed said, ' I don't think we violate the trading regulations as during trade the officials of DSE and ICB, who were present during the trading hours, did not say anything about the regulations.'
When asked what they would do if the low prices are also offered the second day, he said, 'It is difficult to say. Let's see what happens.'
'Why don't we expect higher prices than those of the two state-owned oil companies as Titas is a far better company than Jamuna and Meghna?' he questioned.
He also said, 'We thought we would get handsome prices as there were prices offered ranging from Tk 1,000-Tk 512.'
Chief Executive Officer of ICB Capital Management Ltd Iftikhar-uz-zaman said, 'We are also surprised that not a single share was traded. We have nothing to do if the seller does not want to sell their shares at low prices.' However, he ruled out any violation of the direct listing rules.
Capital market analyst Yawer Sayeed said, 'This is the result of a malfunction of the price discovery method as the selling procedure fell flat.'
However, Dhaka stocks gained Wednesday with the decrease in turnover.
All the market barometers - the benchmark DSE General Index (DGEN) and All Shares Price Index (DSI) and the DSE-20- gained 28.73 points, 14.80 points and 34.21 points to close at 3029.23, 2602.82 and 2579.38.
The total turnover declined to Tk 2.58 billion against the previous trading day's Tk 3.30 billion.
Out of 216 issues traded, 90 advanced, 115 declined and 11 remained unchanged. But the total market capitalisation increased to Tk 943.90 billion against Tk 931.02 billion.
This is the first ever incident in the history of the bourses in the country that any listed company could not sell any share on the first trading day.
As per regulations, the investors in the first ten minutes of the first trading day made the buying offer, considered the price building period and quoted Tk 360.25 as the highest price and Tk 349.00 as the lowest price after the price building period against the face value of Tk 100 a share.
But during the price building period lasting first 10 minutes the investors offered prices ranging from Tk 1,000 to Tk 512, but immediately they withdrew the offers.
Thereafter from the 11th minute the ICB Securities Trading Co. Limited, the selling agent of Titas, was supposed to start selling shares at the best offered market price.
But instead of selling shares at the best-offered prices, the selling agent offered a price of Tk 750 a share.
The failure to sell any single share of the issue has created a difficult situation as trading will remain closed on the third day to allow the market to distribute shares traded in the first two days.
When asked to comment on whether the regulations were violated by not selling the shares on the first day, Securities and Exchange Commission (SEC) chairman Faruq Ahmad Siddiqi told the FE, 'As the trading has been held under regulations of the bourses, so they can better answer about the matter.'
When contacted, Dhaka Stock Exchange senior vice president Saiful Islam said, 'Really we are concerned about the issue.'
'But we formally informed the securities regulator of the matter and we are closely monitoring the situation,' he added.
Sources said the SEC also called an emergency meeting on the day and decided to observe the situation today (Thursday).
Many investors phoned the FE and vented their anger as the authorities concerned did not sell shares at the best-offered prices as per regulation.
Like many investors, Aminur Rashid, apparently fretted about the matter, told the FE, 'The price offered by the ICB mismatches the fundamentals of the company if the net asset value is taken into account.'
'Surprisingly enough, they themselves, who talked about fundamentals, tantalised the general investors,' he said, adding that they deliberately have done this just to swindle the investors as they did in debut trading of two state-owned oil companies.
Chairman of Petrobangla, the parent company of Titas, Jalal Ahmed said, ' I don't think we violate the trading regulations as during trade the officials of DSE and ICB, who were present during the trading hours, did not say anything about the regulations.'
When asked what they would do if the low prices are also offered the second day, he said, 'It is difficult to say. Let's see what happens.'
'Why don't we expect higher prices than those of the two state-owned oil companies as Titas is a far better company than Jamuna and Meghna?' he questioned.
He also said, 'We thought we would get handsome prices as there were prices offered ranging from Tk 1,000-Tk 512.'
Chief Executive Officer of ICB Capital Management Ltd Iftikhar-uz-zaman said, 'We are also surprised that not a single share was traded. We have nothing to do if the seller does not want to sell their shares at low prices.' However, he ruled out any violation of the direct listing rules.
Capital market analyst Yawer Sayeed said, 'This is the result of a malfunction of the price discovery method as the selling procedure fell flat.'
However, Dhaka stocks gained Wednesday with the decrease in turnover.
All the market barometers - the benchmark DSE General Index (DGEN) and All Shares Price Index (DSI) and the DSE-20- gained 28.73 points, 14.80 points and 34.21 points to close at 3029.23, 2602.82 and 2579.38.
The total turnover declined to Tk 2.58 billion against the previous trading day's Tk 3.30 billion.
Out of 216 issues traded, 90 advanced, 115 declined and 11 remained unchanged. But the total market capitalisation increased to Tk 943.90 billion against Tk 931.02 billion.