Midland Bank, whose shares were underwritten at the time of its initial public offering (IPO), became the biggest gainer in share price on the Dhaka Stock Exchange (DSE) on Sunday.
Its shares secured the position of the top gainers with a 9.32% gain to finish the session at Tk12.90.
The day before, the bank’s stock was in second place on the top gainers chart. The bank’s shares have been ranked among the DSE’s top ten gainers for three consecutive business days.
However, on its first day of trading, March 27, the bank’s shares were trading at Tk9 each – below the face value of Tk10. Later on, the share price closed that day at Tk10.2 due to some active buying. Since then, the share price had remained firm at 10.2k until April 4th due to a lack of buyers.
Market insiders said Midland Bank shares were underwritten due to negative investor sentiment towards the bank’s shares.
According to Midland Bank’s IPO subscription, which ended on February 28 this year, more than Tk 18 billion worth of primary shares of the bank remained unsold, while the IPO size was Tk 70 crore – Tk 5 billion for its employees , Tk16.25 crore to the eligible institutional investors and Tk48.75 crore to the general public. The shares that were not sold were taken over by the five underwriters.
The new-gen bank released its third-quarter results just ahead of its first trading date, reporting a 58% fall in profit for the first nine months of 2022.
And such a drop in earnings has impacted the bank’s share price, market participants say.
However, the bank is better off than its competitors on several indicators. Hence, investors are showing interest in its shares. They are actively placing buy orders for Midland Bank stock and no one seems ready to sell them at this time.
According to EBL Securities, Midland Bank’s bad loan ratio was 3.2% in 2021, well below the industry average of 7.9% through December 2021. In addition, in accordance with regulatory requirements, the Bank has maintained adequate credit provisions which reflect the Bank’s shock absorbing capacity for future contingencies. Operating cost management has been efficient as the bank’s operating margin is higher than the industry average.
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