Site icon MONEYINAFRICA

Walton, Berger, ICB asked to raise free float shares to 10pc

The Bangladesh Securities and Exchange Commission on Sunday asked Walton Hi-Tech Industries, Investment Corporation of Bangladesh and Berger Paints Bangladesh to offload more shares on the market to raise their free float shares up to 10 per cent.

The BSEC issued three separate letters to the companies in this regard on the day. According to the letter, state-run ICB has free float shares of 3.19 per cent, multinational Berger Paints 5 per cent and Walton 0.97 per cent on the market.

So, the ICB must offload at least 6.81 per cent, Berger 5 per cent and Walton 9.03 per cent more shares to comply with the BSEC instruction.

The commission in the letter asked the companies to offload maximum 1 per cent of the required amount of shares every month and finish offloading the whole volume within one year.

The companies will offload the shares at the prevailing market prices and they must report the commission about the offloading every month.

BSEC executive officer and spokesperson Rezaul Karim said that the regulator issued the letter to the three companies to ensure free float shares of 10 per cent.

Earlier, the regulator amended public issue rules, making it mandatory for new companies to offload minimum 10 per cent shares on the stock market.

So, the regulator wanted to ensure that existing listed companies have also 10 per cent free float shares on the market, BSEC officials said.

The officials said that the regulator made the decision following a spate of criticisms over listing of Walton Hi-Tech Industries as the company offloaded only 0.97 per cent shares on the market and raised Tk 100 crore through an initial public offering.

Due to the dearth of free float shares, share prices of Walton reached to Tk 1,002.7 a share within seven trading days. Share prices of Walton on Sunday closed at Tk 1,437 each and the market capitalisation reached Tk 43,845 crore, the second highest market capitalisation on the DSE.

Share prices of Berger Paints, whose paid up capital is Tk 46.37 crore, closed at Tk 1,921 each on September 9.Share prices of ICB, which have Tk 805.81 crore in paid up capital, closed at Tk 142 each. Sponsor-directors of the ICB hold 96.8 per cent shares of the entity.BSEC officials said that the commission felt it necessary to ensure sufficient free float shares on the market so that unscrupulous investors cannot manipulate shares of companies.

Stay in the Know!

Sign up for the latest news and information on African Companies and Economy.

By signing up, you agree to receive MoneyInAfrica offers, promotions and other commercial messages. You may unsubscribe at any time.
Exit mobile version