15 companies go public in 2008

Staff Correspondent

A total of 15 companies have got listed with the country’s bourses, floating initial public offerings and offloading shares on the bourses through direct listing regulations, in 2008 that ends tomorrow.
Five of the 15 companies – Jamuna Oil Company, Meghna Petroleum, Titas Gas Transmission and Distribution Company, ACI Formulations, and Shinepukur Ceramics – made their way into the capital market through direct listing regulations, while the rest got listed through issuing IPOs worth around Tk 275.4 crore.
Of these 10 companies, Fidelity Assets and Securities Company raised Tk 14.06 crore, Continental Insurance Tk 9 crore, Delta-Brac Housing Tk 5 crore, ICB AMCL Second NRB Mutual Fund Tk 80 crore, Grameen Two Mutual Fund Tk 15.34 crore, First Security Bank Tk 115 crore, Summit Alliance Port Tk 10 crore, Takaful Islami Insurance Tk 9 crore, Standard Insurance Tk 9 crore, and Northern General Insurance Company Tk 9 crore.
Jamuna Oil, Meghna Petroleum and Titas Gas, three state-owned enterprises, were listed through offloading their shares worth Tk 13.50 crore, Tk 12 crore and 214.12 crore respectively, while the private-sector companies ACI Formulations and Shinepukur Ceramics offloaded shares worth Tk 8.99 crore and Tk 35.01 crore respectively.
The shares of these five companies, however, were sold at prices a number of times their face values.
In 2007, a total of 14 companies raised Tk 492.39 crore by floating IPOs.
‘We have not received our expected response from the private-sector companies on issuing IPOs in 2008, when the stock market continued with its phenomenal growth starting from the first month of the previous year,’ said a senior official of the Securities and Exchange Commission.
SEC chairman Faruq Ahmad Siddiqi, however, hoped that the capital market would register further growth in the next couple of years, with telecom sector and good companies from other sectors offloading shares on the market. The introduction of book-building method of IPO pricing will contribute to the expected growth of the capital market, he said.
The SEC early this month approved the draft rules of book-building method for IPO pricing.
When the rules are finalised and come into effect, they are expected to result in a radical shake-up of the capital market.
Book-building is a mechanism where, during the period for which the book for the offer is open, the bids are collected from investors at various prices within the price band specified by the issuer.
Stock market experts said entrepreneurs of large private-sector companies thought under the existing fixed-price method they would not have received fair deals if they had floated IPOs. Introduction of book-building process of IPO pricing will encourage the private-sector companies to enter the country’s capital market.