Fifteen new securities found their way into the stockmarket this year, up from 13 last year, although the market showed clear signs of volatility in 2011 with twin price debacles.
Eight equity securities, six mutual funds or investment securities and a convertible bond came to the stockmarket, according to data from Dhaka Stock Exchange. The value of public offerings and pre-IPO placements was around Tk 1,250 crore.
Merchant bankers said the number of listings could have been higher this year if the book building method had not been suspended in January and if the market had remained stable all year.
The suspension of the book building method, a price discovery system, blocked many IPOs whose prospectuses were submitted in 2010 under the method, the merchant bankers said. A key responsibility of a merchant bank is to manage issues or bring new IPOs to the market.
With the book building method now modified, regulators have asked issuer companies to revise their IPO prospectuses, they said.
“The situation was different last year, when the market was in a bullish trend,” Mohammad A Hafiz, president of Bangladesh Merchant Bankers Association (BMBA). “This year, the situation was not so good, as the market maintained a bearish trend.”
After the Securities and Exchange Commission was restructured, the policy issues and many rules and regulations, including book building method, were also redesigned.
So, the companies that applied for IPO under book building method, found their entry to the market delayed, said Hafiz, also a director of AAA Consultants and Financial Advisers.
However, he said, bad days are gone, as many new companies have already applied to the commission for IPOs. “We expect a good flow of new IPOs in the coming year.”
-With The Daily Star input