Beximco Pharma down in London trade

showSarwar A Chowdhury

Prices of global depository receipts (GDRs) issued by Beximco Pharmaceuticals fell by around 47 percent at the Alternative Investment Market of London Stock Exchange (LSE) since September 1 last year, amid global financial turmoil.

“The world market is facing recession and the London stock market is not immune from the financial downturn,” said Salman F Rahman, vice-chairman of Beximco Group.

Each GDR of Beximco Pharmaceuticals closed at

13.5 pounds on January 28, while it closed at 25.5 pounds on September 1 last, according to the LSE website.

However, the company, one of the leading drug manufacturers in Bangladesh, is among some globally renowned companies that are facing such a price-drop, as a result of the ongoing financial meltdown.

Meanwhile, Beximco Pharma now performs very well on Bangladesh stock markets, as the LSE reflections is not tangible here.

Similarly the reflection of Bangladesh market is not also tangible on the London market because of the absence of any direct link between the two markets, said Rahman.

Besides, he pointed out, the trading of GDR on the local bourses is not allowed.

On the Dhaka Stock Exchange yesterday, each Beximco Pharma share was traded between Tk 170.60 and 177.60 before closing at Tk 171.70.

The trading of GDRs of the drug maker began on the Alternative Investment Market of London bourse on October 21, 2005.

In the first phase, the company raised around Tk 142 crore from international institutional investors through issuing two crore GDRs.

Beximco Pharmaceuticals in June 2006 announced that it raised 6.5 million pounds through issuance of 8,175,750 additional GDRs, each representing one ordinary share of Tk 10 at an issue price of 80 pence per GDR from the LSE.

With the listing on Alternative Investment Market of LSE, the local pharmaceutical giant positioned itself as the lone company from Bangladesh to raise fund from overseas stock market.

The profit margin of the pharmaceutical company has been coming down since 2005 due mainly to rising raw material prices and higher competition both in the local and international markets.

According to DSE website, the company made a net profit of Tk 489.26 million in 2005, while the profit was Tk 470.66 million in 2006 and Tk 353.07 million in 2007.

As per the half yearly financial statement of the company as of June 2008, its net profit was Tk 151.44 million.