No buyers for new listed shares
There has not been any trading of the shares of newly listed companies though more than half a month has passed since their listing as the opening base price are higher than what investors are ready to buy at. According to the rule of Nepse, the listed stocks can debut at price band between three times to five times the net worth of the company.
“None of the newly listed companies’ net worth are below Rs 100 so the minimum opening price will not be less than Rs 300, at that price range buyers will chose to buy the shares of established commercial banks — as some of them hover around Rs 200 — instead of some new and unknown development banks or finance companies,” said president of Merchant Bankers Association of Nepal (MBAN) Bhisma Raj Chalise.
During the stock market’s heydays, some two years back, the stocks of many companies opened at price higher than Rs 1,000 as the clever investors were able to inflate the price through rumours forcing the Nepse to step in and brought the opening base price band to curb the unnecessary fuelling of share prices even before the shares had debuted in the floor.
“The rule was right when the stock market was skyrocketing but right now when the stock prices are going down each passing day there will be no buyers at higher prices so Nepse need to revise the rule to stop the suffering of the investors,” he said, adding that if it continues the next IPOs will not be subscribed.
About 10 million unit ordinary shares of Hama Merchant Finance, Multipurpose Finance, Muktinath Bikas Bank, Shine Development Bank and Shangrila Development Bank are waiting for a buying order since last three weeks.
“There is only sell order for these shares but no one is ready to buy at the opening price which is above Rs 250,” informed president of Stock Brokers Association of Nepal (SBAN) Anjan Raj Poudel.
“The market will eventually determine real price for the shares but it will take a long time as only small number of shares will be traded at these prices at a time,” he added.
The investors have to wait for a long time to find a match for its expected selling price.
Kamana Bikas Bank’s shares had debuted at Rs 341 two months ago the price of those stocks reached Rs 109 on today’s trading.
Both merchant banker and stock brokers suggest the stock exchange to remove minimum limit for opening base price.
“Below par value of Rs 100 investors will not sell the shares making that minimum limit,” suggested both.
Nepse is also mulling over the decision to revise the regulation. “We will hold talks with investors and decide a new range that will not mar the market,” said spokesperson for the Nepse Shambhu Pant.
Source: THT
