CMDA CEO: BML’s share split will further enhance the stock market

Capital Market Development Authority (CMDA)’s CEO Mohamed Hussain Manik says the proposed stock split by the Bank of Maldives (BML) to its shares will further enhance the Maldivian stock market.

In an appearance on Public Service Media (PSM)’s ‘Raajje Miadhu’ show, Manik said the proposed 1:10 share split by BML will increase the number of shares held by shareholders, and lower the face value of the shares, which will boost trading and affect other positive changes to the stock market.

Manik said that while the value of BML’s shares is currently high, lowering the face value will boost the company’s growth potential.

“When the share is split as proposed by the bank, the value will go down and once it begins selling, my estimation is that it will increase the bank’s growth and market capitalization by threefold or even fourfold in the not-too-distant future,” he said.

Manik said that the CMDA wishes other limited companies to make changes similar to BML.

He said that it will be profitable for both companies and the general public.

Proposed changes to BML’s shares:

• Bonus share issuance: Shareholders will receive two additional shares for every one share currently held, at the same face value.
• 1:10 share split: Each existing share, including the newly issued bonus shares, will be divided into ten shares.  The face value per share will change from MVR 50 to MVR 5. However, this change does not affect the total value of a shareholder’s investment.

According to BML, it is proposing the charges in order to:

• Improve the affordability of the bank's shares for investors
• Encourage broader investor participation in the market
• Enhance market liquidity and trading activity
• Position the bank for potential future public issuances of new shares