Meghna Petroleum, Jamuna Oil to offload shares
In an ice-breaking move two state-owned companies announced offloading their shares in the stockmarket, which declined yesterday as a reaction to the mid-day news.
Shares of Meghna Petroleum and Jamuna Oil Company, both already listed, will be offloaded in the secondary market within the next 30 working days through Investment Corporation of Bangladesh (ICB), according to web postings of the Dhaka Stock Exchange yesterday.
The state-run Bangladesh Petroleum Corporation (BPC), the major corporate sponsor of both Meghna and Jamuna, will sell 17 percent shares of the two companies at market prices from its stakes in Meghna Petroleum and Jamuna Oil.
The BPC, which enjoys monopoly in the domestic petroleum market, has announced selling 54.97 lakh shares out of its total holdings of 3.23 crore shares of Meghna Petroleum, and 53.55 lakh shares of Jamuna Oil out of its total holdings of 3.15 crore shares.
Analysts said, although the government shares were supposed to be offloaded in the market a long time ago, the delayed entry is welcomed and it will help the market to remain stable.
Though the move has left a temporary impact on particular share prices, there is nothing to be worried about, they said.
“It's the beginning and it will increase the supply side in the market,†said Salahuddin Ahmed Khan, a former chief executive officer of the DSE.
After the recent price debacle in the stockmarket, the demand was picking up again and it is the perfect time to release more shares in the market to meet the demand, he said.
“However, similar initiatives need to be taken to bring new private sector companies in the market,†added Khan.
Earlier on July 13, the banking division of the finance ministry issued a fresh directive to 23 state-owned enterprises (SoEs) to immediately offload shares on the bourses to increase the supply of shares.
As per the directive, companies which are already listed on the bourses were asked to release more shares.
Of the 23 SoEs, six are listed on the stockmarket that includes Titas Gas Transmission and Distribution Company, Meghna Petroleum, Jamuna Oil Company, Dhaka Electric Supply Company (Desco), Bangladesh Services and Bangladesh Shipping Corporation.
After the present government assumed power, the finance minister undertook several initiatives to make the public sector companies offload more shares. But the companies failed repeatedly.
Many observed that the failure of the public sector companies to offload shares was a reason behind the recent debacle in the stockmarket.
After the offloading news was posted on the trading server and DSE website, prices of other state-owned fuel and power companies, along with Meghna and Jamuna, declined on the floor.
On the premier bourse, each Meghna share dropped 3.87 percent to Tk 197.70, while each Jamuna share slid by 3.91 percent to Tk 273.70, Powergrid 1.23 percent to Tk 811.75, Titas 1.8 percent to Tk 843.75 and Desco 2.3 percent to Tk 1,730.50.
The impact is temporary caused by the share offload news and there will not be any serious problem, said Ahmad Rashid Lali, a stockbroker and a director of the prime bourse.
“We welcome the government move of offloading more shares in the market,†he said, adding that it will impact the market positively and will help the market to remain stable in future.
The fall in state-owned companies' shares also led other firms to close negative.
The benchmark index of the Dhaka bourse, DGEN, fell 54 points, or 0.8 percent, to 6,642, while the Selective Categories Index of Chittagong Stock Exchange declined 63 points, or 0.5 percent, to 12,226.
Losers beat gainers 171 to 86 with seven remaining unchanged on the DSE, which traded over 17.55 crore shares and mutual fund units on a value of Tk 1,680 crore.
Of the traded issues on the CSE, 61 advanced, 137 declined and six remained unchanged. More than 2.01 crore shares and mutual fund units worth Tk 167 crore changed hands on the port city bourse.
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