Bidding for shares of Ocean Containers begins tomorrow

Institutional bidding for the shares of Ocean Containers Ltd (OCL), an off-dock service provider, will begin tomorrow under book building method. The company will be listed directly.
The three-day bidding, however, will start on Chittagong stock exchange first, as the Dhaka Stock Exchange is yet to give listing approval to the OCL, mostly owned by Summit Alliance Port, a listed company.
For price discovery, the newly introduced book building system will be followed during the bidding for OCL shares as prescribed by the stockmarket regulator.
OCL, whose paid-up capital is Tk 2.38 crore, yesterday presented a demo on book building system when around 100 representatives from different institutions were present.
The eligible institutions will bid for 11.90 lakh shares out of 1.19 crore shares of Tk 10 each. The rest 107.10 lakh shares have been kept for general investors.
An indicative price for each OCL share has already been built at Tk 121 through bidding by five institutions from three sectors.
Now in the price discovery phase, bidders cannot quote 20 percent more or less than the indicative price, meaning they will have to offer between Tk 98 and Tk 145 for each share.
National Housing Finance and Investment joined the indicative price bidding from the financial sector. Eastland Insurance Company and Continental Insurance participated in it as insurance sector companies, and Platinum Securities and National Securities and Consultants as brokerage houses.
ICB Capital Management Ltd is the issue manager.
The book building method, a widely practised price fixing mechanism for initial public offering (IPO), was introduced in March last year, aiming to encourage private-sector entrepreneurs to list their big and profitable companies on bourses at fair prices.
In line with the book building mechanism, institutions bid for shares through which the price is discovered. A weighted average price is fixed based on the highest and lowest prices, and shares are allotted for institutions at the weighted average price. The lowest price is considered a cut-off price for public offers or general investors.
The institutions will not be allowed to sell shares in the first 15 trading days under the lock-in system.
The OCL is a pioneer for inland container depot and container freight stations in Bangladesh. Its activities, though initially were limited to storage of empty containers, now comprises of stuffing and unstuffing of more than 7,000 containers a month and a daily empty storage of 1,800 containers.

Courtesy of The Daily Star