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No Titas Gas share trade on debut

Buyers, sellers fail to agree on price

Star Business Report
Not a single share in die staterun Titas Gas was offloaded yesterday on the company's stock exchange debut with the owners waiting in expectation ofa higher price.
The owners, including majority stakeholder in the company Petrobangla, have offered a fixed selling price of Tk 750 for each Titas share with the buyers opting forTk 520 per share as their highest offer.
However, the owners' reluctance to sell was criticised by the brokers and merchant bankers who said Petrobangla overlooked market demand condition as expressed through the direct listing rules.
Petrobangla will have to change its mindset and offload share in accordance with the prevailing market demand conditions, said a senior official of a brokerage house, adding that it is unfortunate that despite bids from the investors' side, no share transactions took place.
Earlier, the government decided to sell 20 percent orTk 214 crore worth of shares of Titas Gas Transmission and Distribution Company to the public through stock exchanges.
The shares were listed under
the direct listing procedure. This means that investors would bid for the shares for 10 minutes to build up a price before the shares are released onto the market. After this, bidding would continue for another one hour and 50 minutes.
Yesterday, after the first 10 minutes the investors started to place buying orders for Titas shares with the highest buying order reaching Tk 520 per share.
What was upsetting for the traders was that the ICB Securities, the managing agent for the sale, did not sell a single share during the remaining one hour and 50 minutes.
A general manager of Petrobangla said shares of Titas, a company with a strong asset base and regular income flow, should sell at more than Tk 1,000. "But, seeing the market demand down, we fixed the priceatTk750,"hesaid.
He also hoped that the shares would be sold out at more than the fixed rate of Tk 750.
The state-run gas company has joined the country's two bourses under direct listing rules. The company will offload shares worth Tk 214.11 crore, which is 20 percent of its paid up capital ofTk 856.47 crore.
The face value of each Titas share is fixed at Tk 100. As on June 2007, earning per share (EPS) of Titas Gas was Tk 539. The current EPS stands at Tk 30.07 following the enhancement of the company's paid up capital to Tk 856.47 crore in April of this year, up from Tk 238.88 crore as on June 2007. The authorised capital of Titas amounts to Tk 2000 crore.
Titas, which distributes gas in Dhaka and greater Mymensing region, is the fifth state-run company that has been listed on the stock exchanges under direct listing rules.
Earlier, Jamuna Oil Company and Meghna Petroleum offloaded 30 percent shares each in January of this year, with Dhaka Electric Supply Company and Power Grid Company Bangladesh shedding 25 percent shares each in 2006.
Some senior officials of
Dhaka Stock Exchange also called on the chairman of Securities and Exchange Commission to know about the legal implications of Titas's failure to offload shares under the direct listing rules in presence of buying orders.
Meanwhile, price indices on the Dhaka Stock Exchange (DSE) rose yesterday preceded by slump on consecutive days. The DSE General Index rose by 33.31 points, or 1.11 percent, finishing the day at 3033.81 points, while the DSE All Share Price Index increased by 18.18 points, or 0.7 percent, closing the day at 2606.2 points.
According to market insiders, the investors looked to be in a fresh mood as they heard some good news such as enhancement of the limit of brokers' margin and Titas Gas debut on the market that prompted them to buy shares at a slightly higher prices.