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Midland Bank, whose shares remained undersubscribed during its initial public offering (IPO) time, is now in the lead at the Dhaka Stock Exchange (DSE).
The fourth-generation private commercial bank became the third to gainer on Tuesday with a return of 6.9 per cent at the premier bourse.
Earlier, Midland Bank Limited topped the gainer list with a return of 9.3 per cent on Sunday.
Midland Bank shares closed at Tk 13.80 per share at the end of yesterday’s trading session.
However, on its first trading day back on 27 March, the bank’s shares traded at Tk 9 each which was Tk 1 less than its face value of Tk 10.
Later, its share prices stood at Tk 10.2 per share at the end of the following trading session.
The securities regulator Bangladesh Securities and Exchange Commission (BSEC) then fixed that price as its floor price.
Since then, the company’s shares had been stuck at Tk 10.2 till April 3 due to a lack of interest from buyers.
After April 3, the bank’s shares turned around with its 47 lakh shares changing hands.
From April 4 to Tuesday, the company’s share price surged by 35 per cent to Tk 13.8 per share.
On Monday, the bank saw a record number of share trading with 1.19 crore shares changing hands that day.
Commenting on the company’s recent share trading movement, capital market analyst Professor Abu Ahmed told The Business Post that when a company’s share price increases abruptly, we all know why it gets increased.
Only the regulatory body cannot know it in advance, he added.
This veteran professor said the DSE or the BSEC should take a company’s financial condition into account when its shares start to increase suddenly or without valid any reason.
Khalid Mohammad Sharif, company secretary of Midland Bank was tried several times over the phone for a comment but he did not respond.
The news of financial progress, any deal, or business expansion of a company, basically plays a major role in increasing its share prices.
Midland Bank released its third quarterly report on March 27, the day of its trading debut.
Since then, the listed company did not reveal any other price-sensitive updates.
The fourth-generation bank after reviewing its financial reports said its net profit in the July–September quarter of the fiscal year 2022–23 fell by 10 per cent year-on-year.
Besides, its net profit plunged by 58 per cent during the January–September period of FY23 on a year-on-year basis.
The lender’s earnings per share (EPS) stood at Tk 0.16 for the July–September quarter, against Tk 0.18 for the same period last fiscal year.
If the share price of a company increases abnormally, the DSE gives notice to the company concerned to explain the reason behind the share price hike.
But despite the bank’s shares continuously increasing in the past six days, it did not face any query notice from the DSE yet.
Abu Ahmed said when a company’s share price increases abnormally without any financial progress, the DSE should ask the reason after a certain percentage of the price rise.
On September 21 last year, the Bangladesh Securities and Exchange Commission (BSEC), approved the company’s IPO proposal.
However, 26 per cent of its shares floated were unsold during its IPO subscription period owing to the lack of interest from investors in the bank’s shares.
According to the IPO subscription of Midland Bank, which ended on February 28, its primary shares worth more than Tk 18 crore remained unsold against its IPO size of Tk 70 crore.
According to the IPO fund proposal, its shares worth Tk 5 crore were allotted for its employees, while Tk 16.25 crore worth of shares for eligible institutional investors, and Tk 48.75 crore worth of shares for the general public.
This was the first time since 2006 that the initial public offering of a bank remained unsold.
However, the bank’s non-performing loan ratio was 3.2 per cent in 2021, which was much lower than the industry average of 7.9 per cent till December 2021, according to a recent equity note prepared by EBL Securities, a stockbroker.
Besides, the bank has been maintaining adequate loan provisions as per the regulatory requirements, which indicate the bank’s shock absorption capacity for any future contingencies, it added.
