Grameenphone’s market cap gains Tk14,000cr since Hasina-led government change
At the close of the trading session today, Grameenphone’s market capitalisation reached Tk47,166 crore, accounting for 12.1% of the total market cap on the Dhaka bourse
After the downfall of the Sheikh Hasina-led government, Grameenphone stock, the largest in the country's capital market ,became more attractive to investors, driving the market cap of the country's largest telecom operator up by around Tk14,000 crore on the Dhaka Stock Exchange (DSE).
On August 4, Grameenphone's share price was Tk247.20 and its market capitalisation was Tk33,379 crore. However, following the government's fall, its share price surged over 53% to reach Tk379.20, marking a 39-month high during seven consecutive sessions, ending on 14 August.
According to DSE data, after August 14, Grameenphone's stock rally slowed, as its shares underwent corrections due to selling pressure from profit-booking by investors. On Sunday, its shares closed at Tk349.30, down 8% from the peak. Despite this, its market cap remains Tk13,787 crore higher than its position on 4 August. Additionally, it has secured a spot in the top five turnover list during each session since 4 August.
At the close of the trading session today, Grameenphone's market capitalisation reached Tk47,166 crore, accounting for 12.1% of the total market cap on the Dhaka bourse.
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Market participants said that after the political change in the country, the interest of local and foreign investors in Grameenphone shares has increased. This marked the highest increase in its share price for several days in a row.
During the previous Awami League government, a special audit was conducted on Grameenphone, leading the Bangladesh Telecommunication Regulatory Commission to demand Tk12,580 crore from the company for discrepancies identified in their operations between 1997 and 2011. This dispute subsequently escalated to the courts, where Grameenphone was ordered to pay a significant amount as determined by the legal proceedings.
The current interim government's chief adviser, Professor Muhammad Yunus, has ties to Grameenphone's ownership, as the company was founded by him through Grameen Telecom. As a result of these political connections, market stakeholders believe that Grameenphone's stock market position will strengthen following the shift in political power.
According to Grameenphone's shareholding report as of July, Norway's Telenor Mobile Communications owns 55.80% of the company's shares, while Grameen Telecom holds 34.20% stake in the telecom operator. The rest of shares is owned by the institutional investors and general investors.
When asked about the rising interest in Grameenphone shares amid the changing circumstances, a senior analyst at a brokerage firm noted that the company faced significant government scrutiny during the previous administration due to Muhammad Yunus' involvement. As a result, Grameenphone was subjected to various restrictions, leading to a decline in its share price as investors became wary.
However, with the current shift in the political landscape, investors now believe that the company is poised to benefit from improved business conditions. This perception has sparked renewed interest in Grameenphone shares, as investors anticipate potential growth and opportunities for expansion.
At the end of the first half of this year, Grameenphone logged 5% growth in revenue to Tk8,155 crore, while its net profit jumped over 11% to Tk2,199 crore, compared to the previous year at the same time. It also disbursed a 160% cash dividend as interim.
