With the changes being brought to the shares of Bank of Maldives (BML), the stock market will develop further, CMDA CEO Mohamed Hussain Manik stated last night.
Speaking on PSM's "Raajje Miadhu" program, he said that by splitting BML shares in a "1:10 ratio," the number of shares currently held by shareholders will increase, and as the price per share becomes cheaper, the volume of buying and selling shares will increase.
According to Manik, the result of this would be the favorable changes to the stock market.
He noted that the selling prices per share are currently maintained at a high level, but if the share price decreases, the bank's 'growth potential' will increase.
"When the share split happens as proposed by the bank and those shares start selling at a lower price, my estimation is that in the not-too-distant future, the bank's growth and market capitalization could potentially grow by three or even four times," Manik said.
He stated that it is CMDA's wish for other listed companies to also bring changes similar to what BML brought to its shares. This would benefit both the public and the companies, Manik said.
Maldives Stock Exchange Managing Director and Group CEO Mohamed Aushan Latheef also stated that the lowering of the face value of BML shares is expected to bring shares within affordable reach and increase stock market transactions.
Looking at the history of the stock market, those wishing to buy shares are many, but noting that those wishing to sell shares are few, Aushan said he believes that following this decision by BML, the number of parties selling shares will also increase. Therefore, market activities will increase significantly, Aushan said.
Giving an example, he said that a person with 100 BML shares might not want to sell them because they receive a good return as dividends, but with the change, those shares will convert to 3,000 shares.
Therefore, the opportunity to sell some of those would be higher, he said.
"Following this corporate decision by BML, I am looking at the market price of shares also going down, and the opportunity for new shareholders to buy shares increasing, and activities stepping up," Aushan said.
The change BML is bringing to shares
The board has proposed to the General Meeting to issue two bonus shares for every single share with a face value of MVR 50 held by shareholders up to the 'Record Date' (18 March 2026). Issuing bonus shares is the distribution of additional shares without any price, based on the proportion of shares currently held by existing shareholders. For example, a party with 100 shares will receive an additional 200 shares. Therefore, the total number of shares will increase to 300.
Next is the "1:10 ratio" share split. A share split is increasing the number of shares currently held by shareholders and lowering the price per share. When the bank's shares are split at this ratio, each current share, along with the bonus shares, will be split into 10 parts. Therefore, for example, the total shares of a person who currently has 100 shares will change to 3,000 shares.
With that, the face value of each share will decrease from MVR 50 to MVR 5. Due to this change, there will be no change to the total value of the shareholders' shares.
The objectives for which the bank decided to split the shares are:
- Facilitating investors to acquire the bank's shares at a lower price.
- Encouraging increased investor participation in the stock market.
- Facilitating market liquidity and stock market activities.
- Preparing for a situation where it is decided to issue additional shares in the future.
- With the share price becoming lower, investors will be encouraged to participate in the market, and liquidity and trading activities will increase.
