Break-Up Value - 1995

By Haque, Ansarul | Economic Review, December 1996 | Go to article overview

Break-Up Value - 1995


Haque, Ansarul, Economic Review


With a view to curb insider trading the Securities and Exchange Ordinance. 1969 (SEO) was amended. The amended Ordinance prohibited direct or indirect dealing in securities by associated person in possession of information which is generally not available to general investors which could materially affect the value of such securities. A mechanism to compensate affected persons who may have suffered losses From such dealings has also been provided in the law. With a view to safeguarding the interest of small investors, a new section has been added in the SEO, 1969, which relates to fictitious and multiple applications made by unscrupulous persons.

Break-up Value is networth per share and is still one of the important criteria to judge the financial soundness of a company. The Break-up Value per share is assessed by adding together the assets (current and fixed), including property and reserves, deducting all liabilities and dividing the resulting figure by the hum her of ordinary shares. Alternatively for the sake of simplicity the Paid-up capital, Free Reserves and Unappropriated profit are added together and divided by the number of ordinary shares. Thus, the percentage of free reserves and surplus to Paid-up capital gives a clue to the Break-up Value per share. The higher this percentage, the better are chances for bonus or right issues.

The recommendation made by the special committee headed by the Chairman of CLA to improve the performance of stock market both from short-term and long-term perspective were approved by the government during the year under review includes - (a) Disinvesting by the Privatisation Commission of the principal amount of shareholdings of ICP and NIT in order to improve liquidity position of these institutions, (b) freedom to autonomous bodies in their investment activities, permission to managements of pension funds, provident funds and Employees Old Age Benefit Institution funds to invest in shares upto 10 per cent of these funds subject to certain conditions, (c) to treat general insurance companies at par with other investors in respect of their investment in secondary market etc.

Meanwhile a number of corporate laws were amended/ formulated during 1995-96 to further strengthen the capital market. Issue of capital was liberalised by repealing in July, 1995, the Capital Issues (Continuance of Control) Act, 1947. The task of granting approval for prospectus has now been entrusted to the stock exchanges. However, the dates of the publication of prospectus and opening of subscription are fixed on receipt of approval from the Corporate Law Authority (CLA). Guidelines regarding issue of capital have been issued by CLA in the form of Companies (Issues of Capital) Rules, 1996. These new rules are in addition to other corporate laws such as Companies Ordinance, 1984 and the self-regulating rules of Stock Exchanges such as their listing regulations. These rules cover issues such as pricing of issues, terms for right issues, bonus issues and issues of shares for consideration other than cash and are aimed at developing the stock exchanges as self-regulating entities.

With a view to curb insider trading the Securities and Exchange Ordinance, 1969 (SEO) was amended. The amended Ordinance prohibited direct or indirect dealing in securities by associated person in possession of information which is generally not available to general investors which could materially affect the value of such securities. A mechanism to compensate affected persons who may have suffered losses from such dealings has also been provided in the law. With a view to safeguarding the interest of small investors, a new section has been added in the SEO, 1969, which relates to fictitious and multiple applications made by unscrupulous persons.

                                      No. of      No.  of     No. of
                                        Cos.         Cos.       Cos.
Sector                                  1995         1994       1993

Cotton Textile                            25           28         28
Sugar & Allied                             8            6          8
Vegetable & Allied                         1            2          1
Chemical & Pharm. … 

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Break-Up Value - 1995
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.