LankaBangla first broker to offload shares on DSE's alternative board

Alongside being the first company allowed to be traded on the Alternative Trading Board (ATB) of the Dhaka bourse, LankaBangla Securities Limited is going to be the country's first-ever brokerage house to offload shares in the stock market.

According to a stock exchange filing by LankaBangla Finance on Thursday, the Dhaka Stock Exchange (DSE) has approved the public trading of LankaBangla Securities shares under the ATB. 

LankaBangla Finance, a non-bank financial institution that is already listed on the DSE's mainboard, owns 92.31% of its subsidiary LankaBangla Securities.

DSE acting managing director Shaifur Rahman Mazumdar told The Business Standard, "LankaBangla Securities will be the first brokerage firm to publicly trade under the ATB. Also, there are several bonds and other companies in the pipeline."

"Hopefully, the ATB platform will be launched by the beginning of the new year."

He said the brokerage firm has to offload at least 10% stake within the first 30 days of its debut trading.

Responding to why ATB was preferred as opposed to getting listed on the mainboard through an initial public offering, LankaBangla Securities Chief Executive Officer Khandoker Saffat Reza told TBS, "We do not need capital now. Instead, price discovery of our shares, and liquidity – the ease of buying and selling – are important for our existing shareholders."

As per the rules, investors will get two days to bid for the shares of LankaBangla Securities, where the firm's net asset value per share – which stood at Tk20.01 at the end of 2021 – would be the reference price.

From the fourth day, the sponsor would keep offloading shares in the ATB as long as the market absorbs 10% stake.

According to industry people, LankaBangla Securities, because of its conservative approach with margin loans to clients this year, has lost the crown of the country's best brokerage house to UCB Stock Brokerage. But it is still among the top three.

The Bangladesh Securities and Exchange Commission approved the ATB rules at the end of 2019.

In March last year, the DSE completed all the technical preparations to launch the ATB where eligible non-listed securities can be traded. The ATB's trading and settlement will be similar to the processes followed for the scrips on the mainboard.

The DSE said that the securities must be in dematerialised form to be on the ATB. This means, the electronic units of the ATB scrips must be within the central depository system managed by the Central Depository Bangladesh Ltd. Then after the DSE's approval, any non-listed scrip can be traded at the ATB.

Also, anyone can transact in ATB through their beneficiary owner account.