Although Dhaka Electric Supply Company (Desco) made its debut on the country's bourses on Sunday, the state-owned company did not get expected response from the investors in the block market trading.
The power distribution company yesterday sold only 35,550 shares on the block market of Dhaka Stock Exchange (DSE) and 1,650 shares on the block market of Chittagong Stock Exchange (CSE) through its selling agent ICB Securities Trading Company Ltd.
On Sunday Desco sold off 105,900 shares to general investors on the DSE while 13,400 shares on the CSE.
The Desco shares got lukewarm response mainly due to confusion among the general investors following a High Court order regarding the direct listing regulations followed by the company.
A High Court Division Bench on Sunday issued a stay order on the operation of Direct Listing Regulations 2006. The bench also served a three-week show cause notice on finance secretary, commerce secretary, Securities and Exchange Commission (SEC) chairman and DSE president and CEO as to why the direct listing regulations should not be declared illegal.
The show cause notice came after Sheikh Mahmud Kabir, an investor, filed a writ petition on May 25 challenging the direct listing regulations of the DSE.
"General investors were in uncertainty whether the trading of Desco shares would be held yesterday or not," said Nurul Alam, chief executive officer of ICB Securities.
However, normal trading of Desco shares on the bourses will start from tomorrow while there will be no trading of its shares today.
Some DSE members said fixing a lowest price for the Desco shares was a major reason behind the tepid response from the general investors.
They said on the first trading day, the ICB Securities at one stage stopped selling shares at price quoted below Tk 250. But, as per the rules, the market will determine the price, not the issuer, and even Desco cannot fix the lowest price, they said.
"It is a violation of direct listing rules," said Ahmad Rashid Lali, senior vice-president of the DSE.
The seller agent, however, said it acted as per the direction of the seller. "The Dhaka Electric Supply Authority (Desa), the owner of the Desco shares, on Sunday directed us in written statement to sell shares at market price but not less than Tk 250," said Nurul Alam.
He said the lowest price was fixed at Tk 250 to check any syndicated move to lower the market price of the Desco shares. "The lowest price was reasonable and fixed on the basis of price range quoted in the price building process," he added.
