… people express mixed feelings
More than 2,000 investors applied for Bhutan National Bank Ltd (BNBL) and Royal Insurance Corporation of Bhutan (RICBL) shares between June 15 and yesterday, according to data from the Royal Securities Exchange of Bhutan (RSEBL).
The RSEBL announced the mass sale of 15,640,000 shares of RICBL at a floor price of Nu 70, and 17,620,000 shares of BNB at a floor price of Nu 33 between June 15 and July 15. The shares were held in the name of Sungchob Fund and Kidu Fund.
The proceeds from the sale of shares will replenish the reserve for National Resilience Fund (NRF) for continuing income and interest payment support under the Druk Gyalpo’s Relief Kidu (DGRK).
As of 8pm yesterday, RSEBL received a total order of 246,205 shares for RICBL and 664,368 shares for BNBL with prices ranging from Nu 70 to Nu 200 and Nu 33 to Nu 200 respectively.
The floor price is the minimum price set for the offer at and above which the investors can place their bids or orders. However, the final price for the share would be determined through RSEB’s volume-based matching process.
With many confused about how the final price of the shares would be determined, RSEBL yesterday conducted an hour-long online session on the offer of sale of shares of the two companies.
RSEBL Chief Executive Officer, Dorji Phuntsho simplified the concept: “Suppose 100 shares are offered for sale at Nu 33 and 200 people bid at the same price. Another 200 people bid the shares at Nu 34. The final price of the shares will be Nu 34 based on the volume-based matching process.”
This is the first time the stock exchange handled such a large scale offer of sale. An RSEBL official said that it is similar to shares floating for an initial public offering of a company.
“In order to ensure that the opportunity to buy the shares is provided to every eligible Bhutanese, besides our brokerage firms we have sought help from the member financial institutions, community centres operated by National CSI Development Bank, and Bhutan Post offices in all the dzongkhags,” Dorji Phuntsho said.
Interested investors can submit their bids or orders through a broker, community centres, financial institutions, and Bhutan Post or can access through the RSEB’s online portal.
The allocation would be completed on July 15. For those who don’t qualify and those who bid higher, the remaining amount after deducing the discovered price, would be refunded.
Meanwhile, many in the past few days, since the announcement of the sale of shares, on social media expressed pain that the shares held for Sungchob and the Kidu funds had to be sold to continue income and interest payment support Kidu.
“Time for another round of “Citizens giving back” drive. For small fishes to contribute in small amounts and big fishes to contribute in big ways,” wrote one.
“If not for His Majesty’s benevolence, there would be famine, robbery, theft, poverty, death and misery by now. Druk Gyalpo’s Relief Kidu scheme – sheltered the nation from the pandemic menaces,” wrote another.
“Think a million times before availing kidu.”
Others proposed buying the shares and offering them back to the Sungchob and Kidu funds.
Considering the ongoing difficulties Bhutanese face due to the pandemic, His Majesty The King commanded the continuation of the DGRK for 15 more months in April this year.
Close to 5,000 people applied for DGRK within 48 hours after the announcement.
His Majesty’s Kidu Fund has been used to grant Kidu to thousands of Bhutanese to alleviate hardships and provide the ultimate social safety net. The Sungchob Fund was established as a security fund for the country during times of need.
The NRF was set up in April 2020 to provide economic relief to people during the pandemic.