Midland Bank made a dismal trade debut on Monday in the secondary market after getting poor response from the primary market, reflecting investor confidence dented in bank shares that were most lucrative ones before the 2010 market debacle.
The new generation bank's stock hit the lower limit circuit breaker as soon as the market opened, dipping to Tk 9 per share before closing at Tk 10.20 at the end of the day.
Its shares traded between Tk 9 and Tk 10.30 during the trading session.
A total of 1,919 trades were executed with 2.27 million shares of the bank changing hands, generating a turnover of Tk 22.59 million on the Dhaka Stock Exchange.
Analysts attributed the dismal turnout to the weak market sentiment and the overall poor performance of the banking sector for a long time amid a series of loan scams and rising default loans.
The bank failed to draw much attention from investors in an already depressed market that has been experiencing volatilities due to economic uncertainties, said a stockbroker.
He said shares of many banks with good financial health are now available in the market at cheaper prices, discouraging investors to go for a new generation bank.
Midland Bank's latest financial disclosures do not hold out much optimism either.
It has reported 58 per cent year-on-year fall in net profit to Tk 189.20 million for the nine months through September 2022.
Midland Bank is the 35th listed bank, having seen two other banks perform poorly on the exchanges last year after their listing.
Global Islami Bank that made its debut in November last year saw its shares plunged below the face value on the opening day. The stock has since been languishing at Tk 9 each share.
Union Bank's share is also stuck at Tk 9.30 since early September last year.
The investors, who had injected their money in these two bank stocks, are counting losses.
Such experience kept investors away from investing in bank shares.
"Midland Bank is a fully compliant bank and we will be able to meet the expectations of investors," said Md. Ahsan-uz Zaman, managing director & CEO of the bank, after signing a listing agreement with the DSE on Monday morning.
Midland Bank raised Tk 700 million from the primary market by floating 70 million ordinary shares under the fixed price method.
About 26 per cent or 18.17 million IPO shares were unsold due to general investors' apathy to buy bank shares amid corruption and scams making headlines repeatedly.
The underwriters then subscribed the shares against five BO accounts, as per the public issue rules. For the first time in nearly two decades, underwriters had to buy unsold IPO shares.
Seven banks are trading at below the face value of Tk 10 while prices of half of the listed banks have been hovering around the face value out of 35 listed banks since the stock market debacle in 2010.
ICB Islamic Bank's share closed at Tk 5.40, National Bank at Tk 8.30, Standard Bank at Tk 8.80, First Security Islami Bank at Tk 9.80, Global Islami Bank at Tk 9, Union Bank at Tk 9.30 and AB Bank at Tk 9.90 on Monday.
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