Share price of Express Insurance continued to soar as its share jumped 50 per cent further on Tuesday riding on investors' 'irrational hype' over the new issue.
The non-life insurer made a flying trading debut on Monday on the bourses as its share price soared 50 per cent on debut trading day on the issue price of Tk 10 each, the highest allowable limit.
The shares of the non-life insurer closed at Tk 22.50 on Tuesday on the Dhaka Stock Exchange (DSE), soaring 50 per cent for the second straight session which was also the highest allowable limit. Its share was halted in the morning after the trading started on Tuesday.
Some 2.75 million shares worth Tk 62.04 million changed hands on the main bourse on Tuesday.
On the Chittagong Stock Exchange (CSE), the company's share price soared 50 per cent to close at Tk 22.50 each on Tuesday.
Market analysts said the investors continued to show their appetite for the Express Insurance shares amid short-term speculation. So, it created 'irrational hype' among investors for the second trading day after debut.
The price of the shares of the insurer could not go up further despite high demand from investors due to the imposition of a new circuit breaker on debut shares, said a merchant banker.
As per the new rules, the price limit of the newly-listed company will remain open 50 per cent on issue price on debut trading day and the following day price limit will remain open 50 per cent on closing price.
As per the securities regulator order dated March 19, 2020, the face value of each share shall be considered as the floor price.
The Express Insurance, which received regulatory approval for going public from the Bangladesh Securities and Exchange Commission (BSEC) on February 18 this year, raised a capital worth Tk 260.79 million under fixed price method.
The Express Insurance is the 48th listed company in the insurance sector on the prime bourse.
The non-life insurer offloaded more than 26.07 million ordinary shares at an offer price of Tk 10 each and raised the said amount.
Of the total IPO proceeds, the company will invest Tk 205.79 million in fixed deposit receipt (FDR) and treasury bonds, investment in capital market worth Tk 40 million and bearing the IPO related expense of Tk 15 million, as per the IPO prospectus.
The company's profit after tax was Tk 32.44 million and basic earnings per share (EPS) of Tk 0.83 for the six months for January-June, 2020, against profit after tax of Tk 28.89 million and basic EPS of Tk 0.74 for the same period of the previous year.
However, Post-IPO EPS would be Tk 0.50 for January- June 2020 period ended on 30 June 2020.
The company's authorised capital is Tk 750 million and paid-up capital is Tk 651.97 million while total number of securities is 65.19 million.
Incorporated in March 2000, the Express Insurance is one of the fast-growing general insurance companies in Bangladesh. The company is carrying on all kinds of insurance, guarantee and indemnity business other than life insurance business.
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