Regulator gives back authority to bourses to evaluate IPOs

Bangladesh Securities and Exchange Commission has revised the Dhaka and Chittagong stock exchanges' listing regulations, allowing the twin bourses to make recommendations on any initial public offering prior to approval.

The bourses have won back the authority after three years, as the practice was suspended by the regulator following a conflict between the BSEC and Dhaka Stock Exchange in 2012 over the listing of a new company.

The bourses can also inspect the office or factory of a company, audit the financial statements and seek additional information, explanation or documents from a firm.

The BSEC approved the amendment at a meeting at its office in Dhaka yesterday, according to a statement.

The regulator would take its decision on an IPO approval after receiving and evaluating the observations and recommendations from the exchanges.

At yesterday's meeting, the BSEC also gave a green light to KDS Accessories to raise Tk 24 crore from the public.

The trims and packaging manufacturer is set to float 1.2 crore ordinary shares worth Tk 10 each at an offer price of Tk 20, with Tk 10 as premium.

KDS Accessories, a unit of KDS Group, will use the funds from the IPO for business expansion and bank loan repayment.

The company's weighted average earnings per share as of December 2013 stood at Tk 2.3 with a net asset value per share of Tk 19.63. Alliance Financial Services is the issue manager for the IPO.

In another move, the regulator approved Al-Arafah Islami Bank's proposal to issue a Tk 300 crore Mudaraba subordinated bond through private placement from institutional and high net worth individual investors.

The face value of each unit of the bond, which will have a maturity period of seven years, will be Tk 10 lakh. The fund will be used to fulfil the Basel-II requirements.

Meanwhile, stocks closed lower yesterday with DSEX, the benchmark index of the DSE, finishing the day at 4,611.21 points, after declining 15.95 points or 0.34 percent.

The day's turnover, another important indicator of the market, however slightly rose by 0.81 percent to Tk 842.49 crore on the transaction of 20.49 crore shares and mutual fund units.

Losers beat gainers 219 to 73, with 19 securities unchanged on the premier bourse.

Khulna Power Company dominated the turnover chart with 67.66 lakh shares worth Tk 56.23 crore changing hands, followed by Beximco, Bangladesh Submarine Cable Company, United Power Generation and Distribution Company and ACI.

Among the major sectors, mutual funds gained 0.96 percent in market capitalisation, followed by cement with 0.75 percent rise. Conversely, textile makers' market capitalisation eroded by 1.58 percent, followed by telecoms 0.62 percent and banks 0.36 percent.

BSRM was the day's best performer, advancing 10 percent, while Dulamia Cotton was the worst loser, slumping 9.52 percent.

Chittagong stocks also fell slightly with the bourse's benchmark index, CSCX, declining only 3.47 points to stand at 8,709.24.

Losers beat gainers as 174 scrips declined and 58 advanced while 15 closed unchanged on the Chittagong Stock Exchange.

The port city bourse traded 2.04 crore shares and mutual fund units, generating a turnover of Tk 74.18 crore.