Jamuna Oil proves bonanza for govt

Jamuna Oil Company was a bonanza for the government as it received Tk 444 crore against only Tk 13.50 crore shares.
The government on Monday completed the sale of its 30 percent or 1,35,00,000 shares through Investment Corporation of Bangladesh, the selling agent of Jamuna Oil Company.
Offloading of the state-run oil company's shares started on January 9 this year and on the first day price of Jamuna shares rose as high as Tk 950 before closing at Tk 600. However, the share prices came down to as low as Tk 255 last week.
The bonanza could encourage the government for privatising the government entities through stock market, according market analysts.
All the government entities should list on the stock exchanges, they said.
“Had the government privatised the Rupali Bank through stock market, the state-run bank would not have fallen into a deep trouble,” said Abu Ahmed, professor of economics at Dhaka University.
Recently, the government cancelled the sell-off process of Rupali Bank with a Saudi prince, as the prince was dilly-dallying for years to complete the final sales and purchase agreement.
Referring to examples of Malaysia and China, he said the government should hold only minority shares in a company and offload the majority shares to bring a qualitative change in the management.
Other market experts said buying pressure from retail investors pushed the Jamuna share prices up in some cases 90 times higher than the face value of Tk 10 only.
They said although the Jamuna came down to below Tk 300 in the later part of offloading, the prices in the early stage of offloading were abnormally high.
“The Jamuna scrips were overvalued and beyond fundamentals. The market was also distorted which was not healthy for the market,” said Yawer Sayeed, managing director and chief executive officer of AIMS of Bangladesh.
However, the only good thing was that instead of individuals the government received the money, he added.
The Jamuna shares were sold under the direct listing rules, through which the price of a security is determined by prospective investors.
Jamuna is the third government entity, which got listed with the bourses under the direct listing regulations. Prior to Jamuna, Dhaka Electric Supply Company and Power Grid Company of Bangladesh offloaded their shares on the bourses in 2006.
Share sale of another state-run energy company, Meghna Petroleum, which made its debut on the market January 14, nears completion. Out 12 lakh shares, almost nine lakh shares were sold by the ICB, selling agent of Meghna, sources said.
The sources said by selling Meghna shares the government may receive around Tk 300 crore against only Tk 12 crore.

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