SEC to examine IPO proposals of power, energy cos soon

The Securities and Exchange Commission (SEC) at a meeting Tuesday decided to examine the proposals of power and energy companies to allow them to float IPOs under book building method, officials said.

It also asked the bourses to submit a developmentreport on the proposed uniform index by November 15.

The SEC approved the prospectuses of three mutual funds, and issued licence to an asset management company at the same meeting, chaired by its Chairman Ziaul Haque Khandker.

After the meeting SEC Executive Director Anwarul Kabir Bhuiyan briefed the newsmen on the decisions taken at the meeting.

The commission discussed the importance of power and energy companies for the capital market, following a joint proposal of Bangladesh Association of Publicly Listed Companies and Bangladesh Energy Companies Association.

Earlier, the power and energy companies sought exemption from some book building regulations to raise fund from the stock market for financing new power plants or expanding the existing ones.

“The commission will take decision on the proposed IPOs of the power and energy companies soon,” Mr Bhuiyan said.

Besides, he said, “The SEC feels the urgency of launching a uniform index for the bourses. That’s why the regulator has asked the bourses to submit the report by November 15.”

“A uniform index is a must for the country’s future derivative market,” he added.

The stock exchanges were supposed to submit a report on setting up a uniform index to the SEC by September 1. But the bourses have failed to do so in accordance with the standard of International Organisation of Securities Commissions.

As per the SEC’s final approval, Sandhani Life Insurance Unit Fund will go public with an IPO worth Tk 500 million, where the sponsors will contribute Tk 50 million. Per unit price of the fund will be Tk 10. Alif Asset ManagementCompany is working as its fund manager.

As a close-end mutual fund Mercantile Bank Limited 1st Mutual Fund is going public with an IPO worth Tk 1.0 billion. Among Tk 1.0 billion, the fund will offload the units worth Tk 500 million in the IPO.

The sponsors will contribute Tk 100 million, and the remaining Tk 400 million will be fulfilled through pre-IPO placement. Per unit price of this fund will be Tk 10. L R Global Asset Management Company Bangladesh limited has been appointed as the asset manager of the fund.

NCC Bank NRB Mutual Fund, another close-end mutual fund of Tk 1.0 billion, will offload units worth Tk 500 million in the IPO. The sponsors will contribute Tk 100 million, and the remaining Tk 400 million will be collected through pre-IPO placement. Per unit price of this fund will be Tk 10.

Venture Investment Partner Bangladesh (VIPB) is working as its fund manager.

At present the mutual funds account for 4.47 per cent of the DSE’s total market capitalisation, and seven per cent of the turnover.

Besides, the SEC has issued licence to Universal Financial Solutions Limited to act as a fund manager.

Source: The financial express, 27 October, 2010

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