Express Insurance makes stellar trading debut
The share price of the insurance company has soared by 50 percent
Express Insurance made a flying trading debut on both bourses in the country on Monday as its share price soared by 50 percent.
The shares of the general insurance sector company were traded for Tk15 on the Dhaka Stock Exchange (DSE). Its issue price was Tk10 each.
Despite high demand from investors, the price of the shares could not go up further owing to the imposition of a new circuit breaker on debut shares.
As per the new rules, the prices of debut shares will not be allowed to increase by more than 50 percent on a single day.
Turnover of the company was Tk13 lakh and only 87,000 of its shares were traded at the country's premier bourse.
The Bangladesh Securities and Exchange Commission (BSEC) approved that the insurance company go public on condition of investing at least 20 percent of its initial public offering (IPO) funds in the capital market.
The company says it will deposit 74 percent of its IPO fund in banks.
As per the approval by the regulator, Express Insurance has already raised capital of Tk26 crore; by releasing 2.6 crore of ordinary shares at an offer price of Tk10 each under the fixed-price method.
From the IPO fund, the company will invest Tk2 crore in treasury bonds, Tk1 crore in mutual funds and Tk2.21 crore in the secondary market of the stock exchange.
It will keep the remaining Tk19.36 crore as fixed deposit receipts at banks.
Express Insurance was set up in 2000. The authorised and paid-up capital of the company are Tk75 crore and Tk39.11 crore respectively.
Md Abdul Awal, chairman of Express Insurance, is also the managing director of Synthia Securities – a brokerage firm.
Additionally, Express Insurance's Vice-Chairman Mahfuza Younus is the chairman of Sonali Papers and Board Mills.
