Standard Bank plc board of directors has proposed to subdivide the bank’s shares into five units to enhance the stock’s trading liquidity and reduce share price to about K1 900 each, it has emerged.
During the forthcoming annual general meeting on June 26, shareholders are expected to discuss the Malawi Stock Exchange (MSE)-listed bank’s proposal to multiply 234 million by five to 1.17 billion, a move that will reduce share price from K9 500 to K1 900 per share.
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In a letter to shareholders, Standard Bank board chairperson Christopher Kapanga said 938 million additional shares issued as a result of the proposed subdivision will be allocated to every existing shareholder on the record date in proportion to their holding.
He said the rationale and justification for the proposed subdivision is mainly to reward existing shareholders by increasing the number of shares, enhance trading liquidity and make the shares affordable to enable more participation from retail investors.
Said Kapanga: “This will encourage participation of new investor groups from the universe of the retail investors, corporations, investment funds and /or unit trusts, and new investors who prefer a lower entry cost and a more affordable share price to participate in the equity of the company which may widen the shareholder base in addition to the current shareholders.”
MSE chief executive officer John Robson Kamanga, in an interview, described the move as a simplified way of making the Standard Bank stock, which is currently the most valued, affordable.
In a separate interview, stock market investor and finance expert Brian Kampanje welcomed the move, saying it enable shareholders to cash in part of their stocks without losing out on shareholding.
Meanwhile, Minority Shareholders Association of Listed Companies Central Region chairperson Purity Chitalo said in an interview on Tuesday the move is what the grouping has been lobbying for some time.
The process is set to start on July 3 with filing notices of amendments of conversion and subdivision at the companies registry while the listing of the shares from the subdivision of shares is expected on July 21.
