Eight insurance cos shelve their plans to go public

Eight insurance companies have suspended their plans to go public by December 31, 1999, because of the prevailing depression in the capital market.

Under the Insurance Companies Act, which makes initial public offerings (IPOs) a must for the insurance companies, these firms were supposed to float shares by the end of last year. But under-subscription fears refrained them from going public.

The companies are: City General Insurance, Provati Insurance, Prime Insurance, Meghna Insurance, Pioneer Insurance, Mercantile Insurance, Northern General Insurance and Bangladesh National Insurance.

Sources say that the Controller of Insurance has already sent a proposal to the Commerce Ministry seeking a six-month extension to the share floatation time-limit.

But company officials say that many of these firms are now reluctant to come to the primary market because of the current slump and slide in investor confidence.

Currently 18 insurance companies are listed with the country's premier bourse, Dhaka Stock Exchange (DSE). 17 of these firms are now priced above their face values, reflecting the positive mood of the investors.