Only a handful of shares in the state-run Meghna Petroleum Company were offloaded yesterday on the company's stock exchange debut with the owner the Bangladesh Petroleum Corporation (BPC) holding out for a higher price.
However the reluctance to sell was criticised by brokers and merchant bankers who said the BPC was ignoring market demand as expressed through the direct listing rules.
"The BPC will have to change its narrow mindset and offload shares in accordance with market demand," said Dhaka Stock Exchange Senior Vice President Ahmad Rashid Lali.
The government has decided to sell 30 percent of both the Jamuna and Meghna petroleum groups. Sales of Jamuna began last Wednesday.
Yesterday it was Meghna's turn, but only 26,900 shares, or 0.62 percent, of the company were offloaded on the Dhaka and Chittagong stock exchanges on the first day.
The shares were listed under direct listing procedure. This means that a price is built up by investors who bid for the shares for 10 minutes before they are released onto the market. After this, bidding continues for another one hour and 50 minutes.
What particularly upset traders was that the ICB Securities, the managing agent for the sale, only started selling shares after one and a half hours.
According to sources, although ICB Securities desired to sell the shares, the BPC officials did not allow them, as the BPC was expecting a higher price. This was because the BPC was comparing the Meghna price with that of the already listed Padma Oil, which is now being traded at more than Tk 1200 per share with a face value of Tk 10.
At one stage, the chief of Securities and Exchange Commission (SEC) phoned the BPC officials to know what was going on and requested the BPC to start selling.
With just over 20 minutes to go before the end of trading at noon, BPC gave signal to ICB to start selling shares, the sources said.
Opening at Tk 350, Meghna shares closed at Tk 300 on the Dhaka Stock Exchange (DSE), while starting at Tk 370, the share prices closed at Tk 301.30 on the Chittagong Stock Exchange (CSE).
A total of 15,700 shares worth Tk 49.3 lakh in Meghna were sold on the DSE, while 11,200 shares worth Tk 36.7 lakh were sold on the CSE.
The BPC chairman and secretary were not available to comment.
Talking to the reporters, Ahmad Rashid Lali said it is unfortunate that despite bids from the investors' side, the selling of shares started at the eleventh hour of the day.
“If the BPC correlates Meghna with Padma, it will not be acceptable, as the fundamentals between Meghna and Padma are very different,” he said.
As was the case with Jamuna shares, institutional investors were again absent from the market, unwilling to place bids at the present price level.
“I did not bid for Meghna shares because the existing price level seems to me high and the existing prices do not match with the company's fundamentals such as earning per share, net asset value and price earning ratio,” said Nasir Uddin Chowdhury, chief executive officer of LankaBangla Securities.
Meanwhile, trading of Jamuna shares resumed yesterday with the price coming down to below Tk 300. Opening with Tk 449, the price closed at Tk 299.90 on the DSE.
According to DSE website, a total 517,000 shares out of 135,00,000 shares were sold on the 3rd trading day.
Meanwhile, the price indices on the bourses went down yesterday due mainly to price correction in Jamuna shares.
The DSE General Index went down by 75.76 points, or 2.51 percent, to close at 2939.22 points, while the DSE All Share Price Index dropped by 56.78 points, or 2.23 percent, to finish at 2484.25 points.
The CSE Selective Categories Index fell by 42.17 points, or 0.85 percent, to end at 4883.61 points, while the CSE All Share Price Index declined by 59.42 points, 0.77 percent, to close at 7604.32 points.