The New Nation - Internet Edition

Staff Reporter

The Meghna Petroleum Ltd. will start its share trading in open market today, in both the equity markets in the country.

As per prescheduled announcement the Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) have taken necessary initiatives to welcome the new company in equity business. On the other hand, investors, who have failed to get access to Jamuna Oil on January 9, 2007, are eagerly waiting to secure their hold over the state-owned petroleum shares on the very first day of trading.

However experts have advised investors to avoid buying instantly this time as was witnessed for the Jamuna Oil.

"Overpricing of Jamuna Oil has already disappointed shares holders within only three trading sessions. If the Meghna Oil witnesses similar buying intensity on its opening, it will face the same problem as well," said an market expert to The New Nation. According to him, when a script of Tk10 face value jumps at Tk 561 per share on its very first trading day, shows extreme abnormality, which is unhealthy for equity business.

"How an over charging script could harm investment, trading record of Jamuna Oil during the last three sessions is the example," added disappointed market investors. Shares of Jamuna Oil reached Tk 952 per share on its first trading, which at the last closure trading at Tk 529.9 per share in DSE. "Calculate, how much investors have already lost per shares in this script," he added.

According to him, if investors don't show caution in buying Meghna Oil today, they might suffer the worse. On the basis of company record and current equity market position for petroleum shares, market experts have advised investors to avoid any purchase over Tk 200 each in Meghna Oil.

"Over 200 percent growth is enough. Primary bid price should not cross the mark, as witnessed in Jamuna Oil. Trading beyond this rate will be abnormal and risky," said expert.

"On the basis of per share dividend announcement, Jamuna Oil is now at unexpected height, which is very unstable. Condition of Meghna Oil is even worse in per share dividend announcement," said another market experts.

However, disappointing trading in Jamuna Oil was blamed for unwise company policy. According to investors, the company and its representative is offloading very few number of shares in the market, causing the script inaccessible.

"This is a wrong strategy, taken by the company," investors said. If a share of a certain script is unavailable, how could trade go on, said disappointed investors to The New Nation.

According to pre-announcement, the state-owned Meghna Oil Ltd will offload 1.20 crore shares in the open market with a face value of Tk 10 per share today.

According to the DSE notification yesterday, market administration has explained certain rules and regulation to follow in trading with the new script.

Investors would be allowed to purchase Market lot of 100 shares or multiple but not more than 500 shares in a single order per BO Account. No investor will place sale order in first two trading days, as stated.

On first day, from 11th minute, the seller's agent (ICB) will start selling at the best market price. Trading will continue based on market demand for the same, informed the DSE notification.