The New Nation - Internet Edition

Staff Reporter

Experts and top Government officials yesterday expected that the size of the Bangladesh's growing capital market would widen to almost double from its present size within few months.

The bourses will contribute more than 37 per cent of GDP, as the Government has started the process of off-loading the shares of a number of State Owned Enterprises from the energy, telecommunication and industrial sectors in the capital market, they said.

Up to January 2007, market capitalisation of all listed securities in the Dhaka Stock Exchange (DSE) was Tk. 31,709 crore (7 per cent of GDP). This increased more than double to Tk. 93,388.81 crore (17.88 per cent of GDP) till date.

The policymakers, however, found no reflection of the capital market's surge on the industrial sector, as the huge money drown from the stock exchanges is not being invested for productive purpose.

They were speaking at a gala projection meeting on offloading shares of the state-owned Titas Gas Transmission and Distribution Company Ltd. At least 25 per cent shares of the country's largest gas-distribution company will hit the capital market through direct listing with DSE that will kick off trading from July 2.

Chief Advisor's Special Assistant for Power and Energy Ministry Dr. M Tamim said, "Huge money has interred into the capital market.

But we don't see its reflection on industrial growth. Industrialists are still meeting 90 per cent of their investment requirements by receiving loan from the banking system."

"In other countries, most of the heavy industrial capital comes from share market while only small and medium entrepreneurs go to the banks. I hope the money drawn from the capital market will be invested in the industrial sectors in future lessening the pressure on banks," he added.

He also cautioned the investors about any manipulation behind swelling of the market saying, "Uncontrolled growth sometimes creates the collapse of the body itself." "That will be a misery," he said.

Securities and Exchange Commission (SEC) Chairman Faruque Ahmed Siddiqui also made a cautionary note to the investors suggesting them to buy shares applying their best wisdom and judgment to avoid a repetition of the 1996's debacle.

"We have to be careful so that there should not be any repetition of 96," he said.

Faruque termed the Titas debut on the capital market as very positive step, saying that this would fulfil the demands for good shares while people are looking for good companies.

Titas operates 73 per cent of total gas-distribution business of Petrobangla, a state monopoly on the country's natural gas and mineral resources.

With the commencing of trading on the first day, a total of 21,411,728 ordinary shares of Titas, each having a value of Tk 100, will be offloaded to the market.

As per Titas' financial statement, earning per share is Tk 30.07 (net profit after tax) while net asset value per share is Tk 113.49.

This is the fifth state-owned enterprise (SOE) that is coming into the capital market to offload its shares for the public.

DSE President Abdul Haque appreciated the government move to offload shares of SOEs through capital market.

Chief operating officer of the premier bourse Dr. Salah Uddin Ahmed Khan suggested that the state-owned gas-exploration company BAPEX, which is facing a huge financial crisis in running its operations, could easily mobilise funds from the capital market.

According to the share-trading criteria of Titas, share trading will take place on spot market up to 12 pm for first two days.

First 10 minutes of the first trading day will be considered price-building period and thereafter, from 11th minute, ICB Securities Trading Company will start trading at best market price.

Investors shall place an order for minimum of 50 shares and maximum of 1,000 for each order for the first 5 days of trading, as per tricks of the trade.