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Investors are largely disillusioned as the country's capital market is passing through a lull in the absence of quality securities to feed the share-hungry clients for long, market sources said.
"After floating of initial public offering (IPO) by a private commercial bank around eight months back, the market virtually did not see any quality scrip to woo the investors," a market expert said..
He said though three insurance companies and one mutual fund floated IPOs afterwards, their fundamental strengths were not as good as the investors expected.
"Despite not having strong fundamentals and quality track record of their respective business operations the capital market authority permitted those companies to float IPOs considering poor inflow of new securities and legal bindings," one senior official of the capital market watchdog told the FE.
According to the existing capital market regulations, country's commercial banks and insurance companies must have to go public within four and three years of their operations respectively.
Besides, the public offering made by the commercial bank alone was almost same the total amount offered by the said three insurance companies and one mutual fund.
The bank's public offer was for Tk 313.87 million at Tk 100 per share with 30 per cent premium.
Total amount of public offerings made by the insurance companies and mutual fund was Tk 320 million at Tk 100 per share without any premium.
Market sources said the recent postponement of IPO of a private commercial bank by the Securities and Exchange Commission (SEC) has frustrated the investors further.
SEC sources said the public offer made by the bank was for Tk 557.54 million.
The commission after permitting the bank to float IPOs postponed its IPO process due to its alleged involvement in opening fake bank accounts.
"But the commission should monitor the IPO procedure of the bank from the very beginning and punish the culprits involved with opening fake accounts instead of postponing the whole process," a senior DSE broker observed.
The capital market authorities, however, accused the negligence of merchant bankers and non-willingness of giant business enterprises for the dearth of quality scrips in the capital market
"We have urged the concerned authorities including the Board of Investment (BoI), Registrar of Joint Stock Company, Bangladesh Telecom Regulatory Commission, Finance Ministry to take steps in bringing more IPOs into the market," SEC Chairman Mirza Azizul Islam told the FE.
The Dhaka Stock Exchange (DSE) has also appealed to the Power Division and the Energy and Mineral Resources Division under the Ministry of Power, Energy and Mineral Resources (MPEMR) seeking latters' support to encourage the relevant companies to raise capital from the market.
But sources said their efforts are yet to bring good result.
At present, only four matured applications for floating IPOs - three from insurance companies and one from a leasing company - are awaiting the SEC approval.
Their fundamental strengths are not quite satisfactory, said sources.
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