4 companies back to main trading board

As part of an initiative to reform the over-the-counter (OTC) board of stock exchanges, the regulator has allowed four companies to return to the main market following their improvement in business.

The companies are Monospool Paper Manufacturing, Paper Processing and Packaging, Tamijuddin Textile Mills and Monno Fabrics Ltd.

More than a decade ago, the Bangladesh Securities and Exchange Commission (BSEC) expelled a few dozens of underperforming or noncompliant companies from the main trading boards of bourses, and they found their way to hibernate at the unpopular off-exchange trading platform.

Some companies including Wata Chemicals and Sonali Paper returned to the mainboard through overcoming the weaknesses that had sent them to the OTC once.

Non-operating status, failure to convert the company shares into electronic format are the main reasons behind their landing at the OTC, where trading is very inconvenient and both buyers and sellers find it difficult to meet each other with a win-win proposition. 

Now on Thursday, the OTC board of the Dhaka Stock Exchange (DSE) discarded the four of its 65 scrips following the BSEC instruction.

As the companies improved in business, the commission granted their pleas to relist into the main boards of the DSE and Chittagong Stock Exchange, BSEC said in its Thursday statement, adding that the companies would enjoy some exemption from listing regulations.

The exemptions mostly are related to the paid-up capital size, according to BSEC officials. 

Of course, the companies have to catch up gradually and they would initiate steps in line with the regulatory requirements.

The companies have to submit plans on how they would increase their paid-up capital to Tk30 crore as required by the stock exchanges' listing regulations. 

In case of too much shareholding by sponsors and directors, they have to offload some and would face a two-year lock-in for the remaining holding. 

Also, the BSEC is appointing two independent directors to the boards of the returnee companies. 

OTC returnees

Bangladesh Monospool Paper Manufacturing Ltd and Paper Processing and Packaging Ltd, both Magura Group concerns, were listed on the market in 1989 and 1990 respectively.

Suffering bad days in business, the companies went off the trading board but now are doing better again.

Monospool Paper Manufacturing is a well-known paper producer which began exports in 1990.

On the other hand, Paper Processing and Packaging Ltd is a printing and publication house and has come through several modernisations in its facilities at Siddhirganj, Narayanganj. It aims to cater to the growing demand for its products and services in the education and industrial sectors.

Its wide range of products includes exercise books, spiral pads, loose leaves, bound books, hardcover books, gift wrapping papers, envelopes, and shopping bags.  

Tamijuddin Textile Mills Ltd, which was incorporated in 1970 and opened its letter of credit for machinery imports the same year but suffered disruption due to the Liberation War.

However, in independent Bangladesh, the company was nationalised in 1973 and later again was privatised in 1985.

Going through reforms and modernisation thrice in its facilities, the company survived well in the yarn production business and now is generating more than Tk240 crore in revenue a year.

Monno Fabrics Ltd began its journey in the 1990s and it is a complete composite textile mill.

Alongside other Monno flagship businesses including ceramics, engineering services, the mill suffered hardship for over more than a decade. In recent years, the next generation directors are trying to reorganise things within the Monno Group.

Each of the returnee companies has converted their shares into electronic ones.

BSEC sources said that the OTC companies would get separate treatments based on their compliance, performance, and potential in business.