Shares of the largest telecoms operator, Grameenphone (GP), are in a freefall on gloomy market sentiments over the news of a planned tie-up between its rivals, mobile number portability facility just around the bend, and fresh registration of SIM cards.One analyst believes a drop in the company’s half-yearly profits is impacting the shares.The price plunged by 17.50 percent in value on the Dhaka Stock Exchange over the past one month, wiping more than Tk 70 billion off the wireless carrier’s market value.GP share closed Thursday at Tk 260 – down Tk 55 from the price of Sept 8.IDLC Investments Ltd’s Managing Director Md Muniruzzaman told bdnews24.com, “The investors have got somewhat scared because of reports that Robi and Airtel are merging.”IDLC is Bangladesh’s leading merchant bank and brokering house.Regulators BTRC has provisionally approved Robi and Airtel’s proposal to merge their businesses in a deal that would create Bangladesh’s second biggest wireless carrier behind Norwegian giant Telenor’s Grameenphone.Grameenphone boasts the largest subscriber base of 53.9 million, according to July figures released by the government. Robi has 27.9 million subscribers and Airtel 9 million.Muniruzzaman of IDLC Investment also feels the government move to allow mobile-phone users in the next five to six months’s time to change operator keeping their current number has taken the gloss off GP shares.“Investors have taken note of this development. If some Grameenphone customers migrate to other operators, it will impact the company’s profits.”
The company’s profits have tumbled by Tk 100 million to Tk 10 billion in the six months of the current year from the same period last year.Professor Mizanur Rahman, who teaches accounting at the Dhaka University, however, says Grameephone shares were being traded at a higher-than-normal price.“Also, the company has failed to meet the expectation of investors. It could not grow at the desired rate. The result is many investors are selling Grameenphone shares. The pressure of sell-off is driving share prices down.”Grameenphone share has fallen below 10 in the Relative Strength Index at the DSE under sell-off pressure – meaning the shareholders are scrambling to get rid of the stocks.When a share falls below 30 in the RSI, it indicates that share is being sold excessively.Bangladesh’s largest mobile operator began to trade publicly in 2009 and raised Tk 5 billion from the capital market. Norway’s state-run Telenor holds 56 percent stake in the company.Four years later, the company’s share rose to Tk 180. But it increased by 122 percent in 2014 to Tk 400.From December last year to Sept 8, GP share has hovered between Tk 360 and Tk 320.