Over 2 dozen SoEs set to hit stock market: Muhith

The government is going to offload shares of 26 state-owned enterprises (SoEs) to increase depth of the market, said finance minister AMA Muhith on Wednesday.

The minister also said the government was going to rationalise the interest rate of national savings directorate (NSD) certificates and that the gap between the interest rate and inflation would be maximum 1.0 per cent.

"We have decided to ask the companies to securitise themselves and prepare for floatation within six months," he said.

Some of the companies would be offloaded in six months and the rest in phases, he said.

The minister did not specify how much money the government was going to get by selling the shares.

"The amount, the number of shares and the timing of offloading will be decided later," he said.

"SoEs in power, energy, industry, bridge, communication, telecom and health sectors will be offloaded," he added.

Bangabandhu Bridge, Unilever, Bangladesh Shipping Corporation (BSC), Hotel Sheraton and Sonargaon, Essential Drugs, BTCL, Sylhet Gas Transmission Company and some other SoEs will be offloaded.

The minister said book-building method is well accepted by everybody and it is expected that the SoEs will also be offloaded through the method.

The companies needed to undergo reassessment before their share-floating and they would do it in six months, Mr Muhith said.

"BSC is almost ready to float the shares and it is expected that it will raise Tk 50 billion from the market," the minister said.

The government has also decided to offload Unilever shares and the decision is conveyed to the multinational company, he said.

There is an agreement that if the government wants to sell its stake in the company, it must offer Unilever to buy the shares first.

He lamented that the SoEs do not want to float share and termed it 'foolishness'.

"They come to the government for recapitalisation of Tk 400 million, whereas they can raise Tk 2 billion from the market," he said.

Share capitalisation had increased manifold in the last one year and the money in the market should be utilised properly, he said.

"Value of some shares is overheated and the new listings will help cool the market," he added.

The minister said 62 SoEs were identified for offloading in 2005 but it came down to 38 and six of them have already been floated.

"Six of the 32 SoEs have some problems including legal disputes and they will be offloaded after resolving those," he said.

More and more companies would now be listed with the bourses, he hoped.

The minister declined to make any comment on the reported stock exchange index manipulation.

Mr Muhith on Tuesday in parliament said the government was taking steps to do away with private placement as underwriters are obliged to buy unsold shares.

Mr Muhith said the interest rate of NSD certificates would be rationalised and a committee has been formed comprising representatives from Bangladesh Bank, Internal Resource Division and Finance Division to come up with suggestions in two months.