FE Report (November 26, 2010)
Securities and Exchange Commission (SEC) has approved three IPOs, which includes that of Mobil Jamuna Limited (MJL) and is considered the largest ever floatation, in a move to increase the depth of the stock market.
Three companies together will raise more than Tk 10 billion through initial public offerings (IPOs). Two other companies are MI Cement and Salvo Chemicals.
The approvals came at a meeting held Thursday at the SEC with its Chairman Ziaul Haque Khondker in the chair.
"The approval of the three IPOs, including the country's largest IPO is the part of our persistent effort to increase the share supply in the market," said SEC Executive Director ATM Tariquzzaman after the meeting.
MJL, a public-private energy venture, will offload 40 million ordinary shares at a face value of Tk 10 to raise Tk 6.09 billion from the stock market through book building method.
It will be the largest IPO in the history of the Bangladesh stock market after Grameenphone which mobilized Tk4.20 billion by floating IPO last year.
The indicative price of MJL, which has Tk 1.40 billion in paid-up capital, has been fixed at Tk 152.40 per share.
The MI Cement will offload 30 million ordinary shares at a face value of Tk 10 to raise Tk 3.34 billion using book building method. Its indicative price is Tk 111.60 a share.
Under fixed price method, the Salvo Chemicals will offload 26 million ordinary shares at a face value of Tk 10 without any premium.
The Eastern Insurance will offer one rights share against each existing share at Tk 300, including a premium of Tk 200.
The SEC also reduced the time gap between price bidding and subscription period of an issue to 15 days from 25 days in a bid to quicken the share supply.
"From now on, stock dealers will be qualified for acting as underwriters once they fulfill the regulatory requirements," said Farhad Ahmed, an executive director of the SEC.
The SEC has also increased the bourse member's margin that is deposited with the clearing house in line with the securities rules.
"The amount of margin deposit has been increased to reduce the risk factors of the investors," said Farhad.
From now on, the members of the stock exchanges will have to deposit 40 per cent instead of 20 per cent if they transact exceeding free limit of Tk 50 million.
Members of the stock exchanges will have to deposit 60 per cent instead of 30 per cent of the amount of transaction that should be more than Tk 10 million taka but less than Tk 20 million over the free limit.
The SEC, however, increased the deposit limit to 80 per cent from 50 per cent of the transaction worth more than Tk 20 million but below Tk 40 million over the free limit.
A member will have to deposit 100 per cent in case of transaction worth more than Tk 40 million over free limit.
Securities and Exchange Commission (SEC) has approved three IPOs, which includes that of Mobil Jamuna Limited (MJL) and is considered the largest ever floatation, in a move to increase the depth of the stock market.
Three companies together will raise more than Tk 10 billion through initial public offerings (IPOs). Two other companies are MI Cement and Salvo Chemicals.
The approvals came at a meeting held Thursday at the SEC with its Chairman Ziaul Haque Khondker in the chair.
"The approval of the three IPOs, including the country's largest IPO is the part of our persistent effort to increase the share supply in the market," said SEC Executive Director ATM Tariquzzaman after the meeting.
MJL, a public-private energy venture, will offload 40 million ordinary shares at a face value of Tk 10 to raise Tk 6.09 billion from the stock market through book building method.
It will be the largest IPO in the history of the Bangladesh stock market after Grameenphone which mobilized Tk4.20 billion by floating IPO last year.
The indicative price of MJL, which has Tk 1.40 billion in paid-up capital, has been fixed at Tk 152.40 per share.
The MI Cement will offload 30 million ordinary shares at a face value of Tk 10 to raise Tk 3.34 billion using book building method. Its indicative price is Tk 111.60 a share.
Under fixed price method, the Salvo Chemicals will offload 26 million ordinary shares at a face value of Tk 10 without any premium.
The Eastern Insurance will offer one rights share against each existing share at Tk 300, including a premium of Tk 200.
The SEC also reduced the time gap between price bidding and subscription period of an issue to 15 days from 25 days in a bid to quicken the share supply.
"From now on, stock dealers will be qualified for acting as underwriters once they fulfill the regulatory requirements," said Farhad Ahmed, an executive director of the SEC.
The SEC has also increased the bourse member's margin that is deposited with the clearing house in line with the securities rules.
"The amount of margin deposit has been increased to reduce the risk factors of the investors," said Farhad.
From now on, the members of the stock exchanges will have to deposit 40 per cent instead of 20 per cent if they transact exceeding free limit of Tk 50 million.
Members of the stock exchanges will have to deposit 60 per cent instead of 30 per cent of the amount of transaction that should be more than Tk 10 million taka but less than Tk 20 million over the free limit.
The SEC, however, increased the deposit limit to 80 per cent from 50 per cent of the transaction worth more than Tk 20 million but below Tk 40 million over the free limit.
A member will have to deposit 100 per cent in case of transaction worth more than Tk 40 million over free limit.
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