Market capitalisation increases to Nu 22.5B in 2014

Stock exchange: Market capitalisation or the total value of shares in the market as of last year was Nu 22.49B, an increase of about Nu 2.5B compared to the previous year.

This was in accordance with the draft annual report of the Royal Securities Exchange of Bhutan (RSEBL).

Market capitalisation also determines the worth of 21 listed companies in the country from an investor’s perspective.

RSEBL CEO Dorji Phuntsho attributed this to infusion of new shares in the market and increase in price of securities besides bonus and rights issues of shares.

Market capitalisation is derived by multiplying total number of shares by prevailing share price. “So, either the size of the share or the price should go up.”

Last year alone, 50M new shares worth Nu 500M were listed, the majority of which  were on account of reinsurance company GIC Bhutan Re ltd.

However, the number of shareholders’ accounts with the central depository last year stood at 62,991, an increase of 304 compared with the previous year.

Since one individual may hold more than one account with different companies, the CEO said it was difficult to determine the exact number of shareholders.

A banker said when companies float additional shares as rights issue, it leaves room for the shareholders to sell some of the shares.

For instance, a company wants to repay its debt or raise more money and when they have limited options, it offers rights. Rights issue, is an offer the company makes to its existing shareholders to purchase more shares at less than market price.  In such cases, a shareholder has the option to sell some shares to someone else.

In 2013, market capitalisation increased by Nu 2.3B, from Nu 17.6B in 2012 to Nu 19.9B. But the number of shareholders’ account increased from 48,077 in 2012 to 62,687.

This was largely attributed to initial public offering of Dungsam Polymers ltd (DPL), and subscription to the employee stock purchase plan issued by T-bank and Druk PNB.

DPL floated 48.7 percent of its paid up capital shares to public, which was oversubscribed by 244 percent.

Employee stock purchase plan is a means by which employees of a company can purchase their own company’s stock at a discount.

Meanwhile, Nu 4.8B corporate debts were listed through bonds. Last year Dungsam Cement Corporation limited issued two series of bonds and RICBL and Bhutan Airlines (Tashi Air pvt ltd) issued one each.

By Tshering Dorji

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