The debut trading of Islami Commercial Insurance Company was cancelled at the Dhaka Stock Exchange (DSE) on Wednesday due to an error in the trading code, but the Chittagong Stock Exchange (CSE) conducted trading as scheduled.
The general insurer, which raised Tk 202.61 million from the stock market under the fixed-price method, was set to begin trading on both the bourses on the day under "N" category.
The DSE deferred the trading of Islami Commercial Insurance until Sunday, according to a post on the DSE website. The management of the premier bourse acknowledged the mistake.
The DSE trading code for the company is "ICICL" and DSE company code is 25756.
Many investors were upset about the delay.
"The market has been losing for the past few months and such kind of problems sent out negative messages," said Rashedul Hasan, an investor, who had planned to buy the company's shares.
During the debut trading on the Chittagong bourse, the stock rose 10 per cent to hit the upper limit circuit breaker at Tk 11.
Only two trades were executed leading to an exchange of only two shares.
Investors showed great enthusiasm towards the newly-listed stock but sellers were unwilling to sell their stakes as they hoped for higher return in future, said Mostaque Ahmed Sadeque, a former president of the DSE Brokers Association and managing director of brokerage firm Investment Promotion Services.
The small number of shares of the stock is another reason as to why investors showed good appetite for those. Each general investor got 42 shares via the IPO floated.
Mr Sadeque also said a newly-listed issue is often considered an instrument for short-term gains, and so many investors put bets on the shares.
The share price could not go up further despite the high demand due to the regular circuit breaker.
The company has reported a profit of Tk 31.94 million in the nine months through September this year. Post-IPO EPS stands at Tk 0.63 and the net asset value per share at Tk 21.01.
The general insurer received IPO approval from the Bangladesh Securities and Exchange Commission on September 15 this year.
With the IPO proceeds, the insurer would keep a fixed deposit of Tk 152.76 million and invest Tk 40.52 million in listed securities alongside the coverage of IPO expenses.
The insurer's authorised capital is Tk 1.0 billion while the paid-up capital Tk 506.52 million.
Islami Commercial Insurance, which started commercial operation in 2000, carries non-life insurance business as per the Insurance Act, 2010.
[email protected]
