Measures for security in stock market suggested

The home affairs ministry, in a move to maintain order in the stock market, on Thursday asked the Dhaka Stock Exchange to strengthen its security system and introduce identity cards for investors.

It also suggested installation of closed-circuit TV cameras in the areas near the Dhaka Stock Exchange leading up to Shapla Square in Motijheel to help the law enforcement agencies to maintain law and order.

The ministry held a meeting with the Securities and Exchange Commission and the Dhaka Stock Exchange authorities against the backdrop of frequent demonstrations and incidents of violence after the free-fall of share prices and the government's perceived reluctance to protect the interest of common investors in the last few months.

'We have asked the Dhaka Stock Exchange to heighten its own security to maintain law and order,' home affairs

minister Sahara Khatun told reporters after presiding over the meeting at the secretariat.

She said that the ministry had proposed formation of a crisis management team and a coordination committee to tackle any critical situations in the capital market in a more effective manner.

The ministry's suggestions came up at the meeting as the DSE and SEC expressed concern over incidents of violent protest, in protest against the plummeting of share prices, when angry demonstrators vandalised vehicles and other properties in Motijheel.

Law enforcement agencies often had to resort to lathi-charge and firing of tear-gas shells and widespread arrests to contain violent protests by investors in Motijheel commercial area. Most of around 33 lakh beneficiary owners account holders, mainly small-scale investors, lost the major part of their capital because of the stock market debacle that started in January.

When asked when the ID cards would be issued, DSE's president Shakil Rizvi told reporters that they would take a decision in this regard after discussion with the board of directors.

Home affairs secretary Abdus Sobhan Sikder said that the meeting recommended increasing the number of security personnel inside the DSE.

The newly-appointed chairman of the SEC, M Khairul Hossain, and senior officials of the police and Rapid Action Battalion were also present at the meeting.

The SEC's chairman termed the meeting a 'courtesy call' on him after his appointment on Sunday.

Source: New Age

Dhaka stocks slides for second day as confusion returns

Dhaka stocks continued to slide for the second consecutive day on Thursday as the retail investors were yet to regain confidence in the market due to the state of dormancy of the Securities and Exchange Commission and the possibility of introducing tax in the capital market.

Market operators said general investors on the day went for sell-offs while most of the institutional investors remained inactive.

They said the delay in reconstruction of the SEC was making the investors confused about what was coming next. They said the rumours about imposition of capital gain tax and making taxpayer's identification numbers mandatory for opening beneficiary owner's accounts in the next national budget also discouraged investors from taking active part in trading.  

They also said most of the institutional investors, especially the banks, took a wait-and-see policy as they were waiting for the announcement of the budget for the next fiscal year.

Market insiders said as the central bank took a hard line against the commercial banks, they went on backfoot.

'The news that the Bangladesh Bank will investigate the roles of nine commercial banks during the stock market crash in January has also affected the market,' said a stockbroker.

The benchmark general index, or DGEN, of Dhaka Stock Exchange declined by 42.54 points or 0.73 per cent to close the day at 5,718.07 points.

Turnover of the bourse on the day also dropped to Tk 426.49 crore, compared to previous day's Tk 455.04 crore.

Out of 256 issues traded on the day, 149 declined, 100 gained, and seven remained unchanged.

Trading on the DSE started in the negative zone on Thursday. The index fluctuated heavily in the first hour and then steadily inched down, ending the day in red.

DSE senior vice president Ahsanul Islam said, 'The investors are yet to regain confidence after the recent market crash and it will take some more time.'

In his opinion, 'What is most needed at the moment to address the situation is an effective and functional SEC.'  

'A lot of work has to be done to develop the market from here on and the commission has to initiate those moves,' he added.

Source: New Age

HAC Securities’ trading operation suspended for ‘short selling’

Dhaka, May 10: The Dhaka Stock Exchange on Tuesday suspended the trading operation of HAC Securities for an indefinite period for 'short selling' of shares by the brokerage house.

DSE sources said HAC Securities placed a sale order for shares of Northern Jute against a client from its Banani branch, but there was no share of the company in the client's portfolio.

'As the brokerage house could not settle the accounts at the day's closing, we have suspended trading operation of the firm until the issue is resolved,' he said.

A number of clients of HAC Securities on Tuesday alleged that the house was involved in forced selling of shares and the incident of the 'short selling' occurred due to the move of the firm. They also submitted a complaint to the Securities and Exchange Commission in this regard.

Laique Ali Chowdhury, MD of HAC Securities, told New Age, 'Today our trading operation was suspended by the DSE management on a settlement issue. We hope that the problem would be resolved by tomorrow (Wednesday).' He said, 'I have no such information about forced selling in my firm.'

Source: New Age

DGEN sheds 118 points

Dhaka, May 10: Dhaka stocks plunged more than two per cent Tuesday after a see-saw movement throughout the trading hour with substantially low turnover as the investor's confidence remains in 'low level' in the current bearish market.

"Nervousness gripped the investors and many of them sold shares fearing further fall in the index," said a stock broker.

However, the market opened with a positive mood, gaining more than 38 points within five minutes. But in next 20 minutes, it shed 80 points.

At the end of the day, the benchmark DSE General Index (DGEN), main gauge of the market shed 118.93 points or 2.10 per cent to close at 5,519.87.

The broader All Shares Price Index (DSI) came down to 4,596.48, shedding 93.87 points or 2.0 per cent. The DSE-20 index comprising blue-chip shares also lost 47.43 points or 1.28 per cent to 3,644.33.

The market is in the shaky mood and could not get strength as there is no support from the big and institutional investors which are the main force of the market," said Ahmad Rashid Lali, managing director of the Rashid Investment Services.

"Big and institutional investors are still far from the market as the government announced different policy measures including forming taskforce and re-investigation against the big traders which continued to have negative impact in the market," Mr Ahmad said.

The liquidity crunch in the money market also affecting the share market as many of them prefer to deposit money in banks instead of investing in the volatile share market, he said.

Mr. Ahmad said the market will not be stable unless the government gives a positive signal to bring back investors' confidence especially big and institutional investors'.

Share prices of all major sectors closed red zone except cement. Cement sector gained 1.01 per cent on the day as Lafarge Surma Cement advanced substantially following its corporate declaration.

Among the major sectors, banks the market's bellwether lost 1.72 per cent, NBFIs 2.16 per cent, telecommunications 2.14 per cent and fuel and power 1.86 per cent.

A total of 46.69 million shares changed hands on the day against 51.37million in the previous session. The trade deals also decreased to 98,706 against Monday's 116,828.

Total market capitalization also decreased substantially and stood at Tk 2,577.18 billion against Tk 2,620.23 billion in the previous session.

Turnover value continued to decline and stood at Tk 3.82 billion, down by 10.54 per cent, from Tk 4.27 billion in the previous session.

Most of the issues traded on the day lost in prices as out of 245 issues traded, only 28 advanced, 215 declined and two remained unchanged.

Source: The Financial Express

Dhaka stocks plunge again

Dhaka, May 11: Dhaka stocks plunged again on Tuesday despite active participation of the Bangladesh Fund, as the retail investors went for panic-driven sell-offs in the face of government lethargy in restructuring the Securities and Exchange Commission, market operators said.

They said that fresh rumours about imposition of tax on capital gain and making the use of tax identification number mandatory for beneficiary accounts in the next budget had affected further the investors who had become jittery because of last five months volatility in the market.

The benchmark general index of Dhaka Stock Exchange, or DGEN, lost 118.93 points or 2.10 percent on Tuesday, to close at 5,519.87 points after the DGEN had advanced marginally on Monday following a 287-point plunge on Sunday.

'Although different wings of the Investment Corporation of Bangladesh including the Bangladesh Fund purchased shares worth Tk 37 crore on the day, but they failed to keep the market afloat,' said a DSE official.

After Sunday's crash, the Bangladesh Fund, a Tk 5,000 crore open-ended mutual fund, could rescue the market on Monday, but investors continued to lose faith in the market as the government was yet to clear its position on appointment of a new chairman of the SEC and rumoured tax measures, said a stockbroker.

'Most of the institutional investors are now inactive. It is not possible for Bangladesh Fund to keep the market afloat. Besides, investors also know that the Bangladesh Fund could manage only Tk 500 crore so far as most of the sponsors are yet to chip in their portion,' he said.

Trading on the bourse started on a positive note as the index gained around 40 points in the first ten minutes. But for next half an hour the DGEN curve fluctuated heavily. At around 12 noon the index started crawling down and ended the day in a negative zone.

Turnover on the day dropped significantly to Tk 382.36 crore which is Tk 44 crore less from the previous day.

Out of 245 traded issues, only 28 advanced while 215 suffered heavy losses in share prices and two remained unchanged.

Investors, who had observed hunger strike, staged a sit-in programme and rowdy demonstrations in the previous two days, remained in the brokerage houses on Tuesday.

Mahmood Osman Imam, a finance professor of Dhaka University, said, 'Government inaction over stabilising the market is making the investors more and more panicked as they are now completely trackless about what's coming next.'      

Osman said the government should immediately come up with an action for stabilising the market to ensure the investors about its willingness to improve the situation. 

Md Fayekuzzaman, managing director of ICB, said, 'We are trying the best from our end to stabilise the market, and I hope the market will be stabilised soon.'

Ahsanul Islam, senior vice president of DSE, said, 'Investors are panicked and that pushed the market down today.'

He said that an immediate government move with substantial measures would help to restore the investors' confidence.

'The investors should not pay heed to rumours and government should came up with some encouraging schemes for the capital market to address the situation,' he added.

Source: New Age

MCCI suggests thorough reform of capital market

Dhaka, May 11: The Metropolitan Chamber of Commerce and Industry has proposed six remedial measures for restoring stability in the capital market and ensuring its healthy growth.

In its quarterly review on the country's economic situation, the premier chamber suggested that the government institute a thorough reform of the system in the capital market by framing the necessary short-term, mid-term and long-term rules and regulations after discussion with all stakeholders.

The government should quickly offload the shares of the selected profitable state-owned enterprises as it promised earlier, said the chamber.

The multinational companies operating in Bangladesh should be asked to enlist themselves in the country's stock exchanges, said the MCCI. 'Such enlisting is compulsory in the neighbouring countries.'

MCCI observed that the Dhaka Stock Exchange and the merchant banks would have to be more active to attract more private issues to the market.

It said that the Dhaka Stock Exchange might persuade the big listed companies to offload a bigger percentage of their shares to meet the growing demand for shares in the market.

Strengthening the market's regulatory mechanism and making it more transparent and accountable is crucially important to increase public confidence in the stock market, MCCI pointed out.

Its review said that in the January-March period, there were mixed performances in Bangladesh's economy with healthy growth in agriculture, strong recovery in the export sector, but decline in foreign aid inflow and remittance.

'Output performance in agriculture has continued to remain healthy, thanks to good weather and favourable government and central bank support for the sector,' said the MCCI.

The rise in private sector credit and the increased volume of letters of credit opened in recent months indicate that manufacturing activities are on the rise, it added.

Despite the installation of some additional generation capacity and some increase in electricity production, the power situation has not improved much in the period.

The average deposit rate increased faster than the average lending rate, said the review which acknowledged the concern of a section of the business community over withdrawal of the lending limit and the increased cost of capital.

The MCCI stressed the need for meeting the challenge of inflation, in particular to contain the prices of food items, and increasing the supply of power.

Source: New Age

Bangladesh Fund rescues market on the day

Dhaka, May 10:

The Bangladesh Fund, a Tk 5000-crore open-ended mutual fund launched by eight state owned institutions, on Monday prevented the market from plunging massively for the second day by purchasing shares worth Tk 27 crore, ICB sources said.

On Monday, the general index of Dhaka Stock Exchange closed the day in a positive territory, gaining by 27.33 points or 0.48 per cent, thanks to late buying by the fund after the key index lost 366 points in the first two sessions of the day's trading. 

Market operators said the general investors went for sell-offs from the opening bell, resulting in heavy fall in share prices. But the Bangladesh Fund started to buy shares from the midday trading and the move pulled the market, they said.

'We were trying to lift the market in the last two days, but we got positive result today [Monday],' Md Fayekuzzaman, managing director of the Investment Corporation of Bangladesh, told New Age.

Currently the fund holds Tk 500 crore and soon they will collect the rest of the sponsors' fund which is Tk 1,000 crore, he said.

When asked whether their efforts would be enough to keep the market afloat, he said, 'We will

try our best to stablise the market.'

General investors in the last two days staged rowdy demonstrations in front of the DSE building, protesting the free fall in share prices. Investors also criticised the role of the Bangladesh Fund as many of them injected fresh funds, banking on the hype created by the fund.

On March 6 the ICB, the prime sponsor of the fund, announced the formation of the fund to stabilise the volatile capital market. The formation and the launching of the fund raised the level of the confidence of the general investors who were in despair situation after the January stock market debacle.

A stock market analyst said the Bangladesh Fund could be an important addition to the market if it could contribute to the market according to the need of the market. 

'The Bangladesh Fund can play a key role in this situation if it is used properly,' said Akter H Sannamat, a stock market analyst.

The amount of the fund is very big and it should be handled carefully, he said.

The fund should collect the rest of the sponsors' amount immediately, he added.

Source: New Age

Investors go on hunger strike over stock plunge

Dhaka, May 10:

Around 200 retail investors on Monday staged a sit-in and went on a hunger strike in front of the Dhaka Stock Exchange building, demanding immediate government action to stabilise the volatile capital market.

They, however, aborted the fast-unto-death programme after issuing a 24-hour ultimatum to the government for stabilising the market and meeting their demands.

The Dhaka stocks on the day, however, managed to inch up by 27.33 points thanks mainly to active participation of institutional investors, which succeeded to make the retail investors not to go for a binge on share-selling.

The general index of the bourse, or DGEN, clambered up by a mere 0.48 per cent to close the day at 5,638.80 points, after taking a 366-point plunge in the previous two trading days.

The trading on the bourse started at 11:00am in the same bearish mood as on Sunday and saw the DGEN make a 90-degree nosedive, hurtling down 200 points in the first 50 minutes.   

Even before that, as the DGEN did a 120-point free fall by 11:15am, the general investors in a rage rushed out of the brokerage houses adjacent to the DSE building on the Motijheel thoroughfare. As on the previous day, they chanted slogans especially against finance minister Abul Maal Abdul Muhith, Bangladesh Bank governor Atiur Rahman, and DSE president Shakil Rizvi.

After half an hour, they staged a sit-in in front of the entrance to the DSE building and began a fast-unto-death programme under the banner of Bangladesh Share Market Oikkya Parishad.

The Parishad leaders distributed a leaflet containing a number demands to the government as well as suggested action for stabilising the capital market. The demands included resignation of the finance minister within seven days and restructuring the Securities and Exchange Commission in 2 weeks time.

The Parishad also demanded that the central bank should reduce the cash-reserve ratio and the statutory liquidity requirements of the commercial banks.

Another demand listed in the leaflet was for compelling the investors named by the probe committee as being involved in price manipulation leading to the January's stocks debacle to reinvest their ill-gotten profits in the share market.

They asked the government to compensate the investors who suffered losses in the crash and also to withdraw all cases filed against retail investors immediately.

Speakers at the demonstration said one of the retail investors, Rony Zahan of Tongi, had committed suicide on Sunday, unable to bear the anguish of his losses and frustration.

After the trading ended at 3:00pm, the demonstrating investors held a Gayebana Namaz-e-Janaza for Rony Zahan.

The police made the road from Shapla Square to Ittefaq Crossing off-limits to all vehicles while the investors had held the demonstration from 11:30am to 3:30pm to avoid any untoward incident. Although an investor was detained at around 12:00 noon for abusing the law-enforcers, he was later set free.   

A DSE source said the newly launched Bangladesh Fund bought shares worth Tk 27 crore on the day. The turnover of the bourse on Monday dropped to Tk 426.60 crore from that of Tk 462.27 crore on Sunday.

Market analysts said the slight gain that the DSE maid on Monday meant no significant development.

Akter H Sannamat, a capital market analyst, said, 'The day's rise was a halt to the relentless fall of the DSE general index.'

The government and institutional investors have an important role to play to sustain the rebound, however weak it may seem to be, he said, adding that all the stakeholders, including the retail investors, should behave reasonably if they want the market get rid of volatility.

Source: New Age

SEC member Yasin Ali resigns

Dhaka, May 10:

Another member of the Securities and Exchange Commission Md Yasin Ali on Monday tendered his resignation after the finance ministry asked him to quit.

On Sunday, SEC member Anisuzzaman resigned from the commission as he was also instructed to do the same.

Sources in the finance division said Yasin Ali went to the ministry at around 2:45pm to meet the banking division secretary, Sahfiqur Rahman Patwari.

In his resignation letter, addressed to finance minister AMA Muhith, Yasin said he was resigning on a personal ground as per the clause 5(7) of the Securities and Exchange Ordinance 1993.

Yasin Ali was appointed as member of the commission in 2008 for a three-year term which was to end on December 31 this year.

Finance ministry sources said a section of government high officials pressured the two members to resign immediately as part of the restructuring programme of the SEC announced by the government following the probe committee report on January stock market scam. 

In the probe committee report, however, there ware no allegations against Yasin Ali and Anisuzzaman.

The probe committee recommended the restructuring of the commission by replacing a number of senior officials including its chairman Ziaul Haque Khondker, but the concerned authorities are yet to take any actions against them, the sources added.

Source: New Age

Dhaka bourse asked to list MI Cement

Dhaka, May 9: The Securities and Exchange Commission (SEC) has issued a circular for a second time to the Dhaka Stock Exchange (DSE) to allow a listing for MI Cement Factory Ltd.

The DSE did not comply with the first circular that asked it to list the company, as the conditions of compensation would create complexities and contradict the securities law, said a DSE official.

However, the Chittagong Stock Exchange (CSE) approved the listing in a condition of compensation and the company made a trade debut yesterday.

"We will take action against DSE, if they do not follow our circular," said an official of SEC.

The DSE should list the company as the CSE has already done so, he adds.

DSE sent a letter on May 3 to the SEC, explaining 11 points of negative impact of compensation on the market.

In line with the letter: "The introduction of the concept of compensation for the equity mark shall be nothing but risky. There is no such instant compensation for the capital market in the world. The compensation goes against the basic concept of equity investments. The matter of compensation means the primary issue price of the share is not justified."

"Some investors will use the chance to manipulate MI Cement share prices as they will sell shares too close once to get compensation, while the compensation will involve the investor for circular trading." But, the SEC rejected it and issued a circular to list the company to the bourses.

In another development, SEC has increased the listing period of MJL Bangladesh Ltd to end the listing stalemate.

Source: The Daily Star (May 9, 2011)

Investors protest stocks plunge

Dhaka, May 9: Investors once again demonstrated in front of Dhaka Stock Exchange as share prices marked a sharp fall yesterday despite cash-pumps from the Bangladesh Fund.

The benchmark index of DSE slumped 287 points, or 4.88 percent, to close at 5,611 points, while the selective price index of Chittagong Stock Exchange lost 477 points, or 4.50 percent, to close at 10,115.

The investors took to the streets shortly after 1pm when the premier bourse lost over 200 points. Angry investors chanted slogans against the government and demanded taking necessary steps to bring back normalcy in the market.

Some of them carried placards that read: "Shoot us or stabilise the market."

Investors have given ultimatum of three days to bring back normalcy to the market.

Arif Khan, chief executive officer of Zenith Investment, said, "Investors started selling shares as they lacked confidence."

"Most of the institutional investors faced credit crunch and failed to buy shares. The uncertainty over restructuring the SEC also created a panic."

Of the total 248 issues traded on the DSE, one advanced, 244 declined and three remained unchanged.

Source: The Daily Star (May 9, 2011)

Stocks fall despite cash pumps

Stocks slumped yet again as panic sell-offs marked the trading session yesterday, while institutional investors remained inactive despite investments from the Investment Corporation of Bangladesh (ICB).

The benchmark general index of Dhaka Stock Exchange slumped 73 points, or 1.23 percent, to close at 5,899 points, while the selective categories index of Chittagong Stock Exchange lost 137 points, or 1.27 percent, to close at 10,593.

Khairul Hossain, chairman of ICB, said, "Market dropped as some big institutional investors adopted a wait-and-see policy."

The ICB will go for big buying of shares from the next week, he added.

Meanwhile, the Bangladesh Fund has begun pumping money into the sagging stockmarket with the purchase of a lot of 50 shares of government-run Titas Gas.

Md Fayekuzzaman, managing director of the ICB, said, "This fund will play a good role to keep the market steady." "We will buy good shares with sound fundamentals," he said.

Banks lost 0.42 percent yesterday, while non-banks 1.63 percent, telecommunication 0.64 percent, pharmaceuticals 1.56 percent, and fuel and power 1.44 percent.

Source: The Daily Star (May 5, 2011)

CSE okays MI Cement listing

Chittagong Stock Exchange yesterday approved the listing of MI Cement as per the directives of the Securities and Exchange Commission although the Dhaka bourse did not give the approval to the company.

Fakhor Uddin Ali Ahmed, CSE president, said, "We approved the listing of MI Cement by following the directives of the SEC. The company's share trading will start on Sunday."

Muktar Hossain Talukder, chief finance officer of MI Cement, said: "The CSE has approved our listing process by following our conditions."

However, Dhaka bourse on Tuesday requested the SEC to ask the company to return the initial public offering money to investors.

Earlier, MI Cement proposed that sponsor directors compensate the investors if its share prices go below the offer price within the first six months of trading.

As per the data available with the Dhaka bourse, earnings per share of the company is Tk 93.87 and net asset value is Tk 37.01 per share as of June 2009.

Source: The Daily Star (May 5, 2011)

Bangladesh Fund starts rolling today

Dhaka, May 5: The Bangladesh Fund, a Tk 5,000 crore open-ended mutual fund, comes into operation today as the Securities and Exchange Commission on Wednesday approved its registered trust deed and issued the certificate for its floating.

'We have received the SEC nod to float the fund and will start buying shares from Thursday,' Investment Corporation of Bangladesh managing director Md Fayekuzzaman told New Age.

The capital market regulator also granted the request of the ICB, prime sponsor of the fund, for permission to float on the market immediately whatever amount of the sponsors' investment it has in its hand at the moment.

'The ICB sought approval for floating immediately the amount of sponsors' investment it has in its hand and we have granted it, considering the nature and purpose of the fund,' said SEC member Yasin Ali.

The Bangladesh Fund will begin its journey by floating initially Tk 500 crore, the amount of sponsors' investment accumulated so far. The other seven sponsors of the fund committed to contribute Tk 1,000 crore in the fund but had not come up with the money till Wednesday.

The remaining Tk 3,500 crore will be collected from institutional and individual investors by selling units of the fund.

'We will now ask the institutional investors to join the fund. A number of these private institutions have already expressed their interest to do that,' Fayekuzzaman told New Age.

He said, 'If we consider the nature of the fund, I will say it will be more profitable for investors who will join earlier.'

'The price of the units will be determined based on their net asset value and, if the fund makes profit, the unit price will rise,' he explained.

The units of Bangladesh Fund will be traded on over-the-counter market across the country.

'To begin with, only the state-owned banks will be authorised to deal in the Bangladesh Fund units. After observing the progress for a while, we may allow private banks to deal in the units as well,' the ICB chief executive said.

He said the fund would purchase shares having sound fundamentals, like a lower price-earning ratio.

An ICB source said, as on Tuesday, Jiban Bima Corporation was yet to specify its investment amount. He also said that most of the other sponsors had no share in the initial amount of Tk 500 crore.  

'Jiban Bima is yet to confirm the amount of its contribution to the fund. We also could not collect contribution from all the sponsors to the Tk 500 crore initial portion,' he added.     

The ICB and seven other state-run financial institutions on March 6 declared creation of the mutual fund aimed at stabilising the volatile equities market. The total sponsors' investment in the fund is envisaged to be Tk 1,500 crore and the remaining Tk 3,500 crore will be floated for public subscription at a face value of Tk 100 per unit.

Source: New Age

Dhaka stocks rebound on Bangladesh Fund hope

Dhaka, May 5: Dhaka stocks had a sharp rise on Wednesday as the investors refrained from panic selling as they became optimistic about the market with the Securities and Exchange Commission on the day approving floatation of Tk 5,000 crore Bangladesh Fund for investment in the capital and money markets.

The daily turnover of the bourse, however, hit three and a half months low to Tk 381.44 crore as buyers remained cautious and took a wait-and-see policy to watch the

impact of the fund in the coming days.

The benchmark general index of the Dhaka Stock Exchange, or DGEN, gained 107.38 points or 1.83 percent on the day to close at 5,973.09 points.

'The market rose as the jittery investors stopped panic selling as they hoped that the market would rise once the Bangladesh Fund starts operation on Thursday [today],' said a stock broker.

He said some retail investors bought shares hoping they would gain from the purchase as the prices of many of issues were low, but the institutional investors remained almost inactive as they wanted to witness the impact of the fund.

As a result, turnover fell by Tk 72 crore from the previous day. Wednesday's turnover hit a four-month low as the turnover on January 25 was Tk 206.41 crore.

The market had been in a damp mood for three sessions before Wednesday because of rumours about the uncertainty of Bangladesh Fund and restructuring of SEC. 

Kazi Sabbir Kamal, an investor, said, 'The fund can help to a great extent to support the market as the volume of it is very large. We hope that the initiators of the fund will perform the role they declared.'  

But some investors were still skeptical about the impact of the fund as other issues like restructuring of SEC and the government move on the January's stock market debacle probe report were yet to be settled.

Out of 248 traded issues on the day, 216 advanced while 26 declined and one remained unchanged.  

Market experts observed that the Bangladesh Fund could be a great addition for the capital market in the long run if it is used properly.

Salahuddin Ahmed Khan, a professor of Dhaka University, said, 'If the Bangladesh Fund can perform as it is expected to, it can be helpful for the market.'

Capital market analyst, Akter H Sannamat, said, 'The Bangladesh Fund is welcome but proper utilization of the fund should be ensured to get the expected result from it.'

'  Source: New Age

Another SEC member asked to resign

Dhaka, May 5: The finance ministry on Wednesday asked another member of the Securities and Exchange Commission to resign from the commission.

The Banking Division secretary, Shafiqur Rahman Patwari, asked SEC member Md Anisuzzaman to resign when the latter called on the former at the division on Wednesday morning. Patwari had asked SEC member Yasin Ali to resign on Tuesday.

The ministry asked the two members to resign, but it is yet to take any action against three top officials, including SEC chairman Ziaul Haque Khondoker, against whom the probe committee on January's stock market debacle recommended for taking actions.

Sources in the ministry said although the probe committee did not find any involvement of Yasin and Anisuzzaman in the scam, a section of government high-ups was creating pressure on them to resign immediately.

The finance minister, AMA Muhith, on Saturday told reporters that the government would restructure the whole commission and replace the chairman within two to four days. But the government is yet to appoint a new chairman till Wednesday.

Newly-appointed member of SEC Helaluddin Nizami, meanwhile, took office on Wednesday. Helaluddin, a former professor of accounting at Chittagong University, said, 'I have joined the commission with an aim to protect the interest of the general investors and I hope it can be achieved by stakeholders' combined effort.'

Source: New Age

SEC member Yasin Ali asked to resign

The finance ministry on Tuesday asked a member of the Securities and Exchange Commission, Muhammad Yasin Ali, to resign from the commission within a day or two.

The other SEC member Anisuzzaman would also be asked to resign while he will meet the banking division secretary, Shafiqur Rahman Patwari, today [Wednesday] at 10am, said sources in the ministry.

The division, however, is yet to take any action against three officials including the chairman of the commission, Ziaul Haque Khandkar, against whom the probe committee on January's stock market debacle, recommended for taking action.

The probe committee found no involvement of Yasin Ali and Anisuzzaman in the share scam.

The finance minister, AMA Muhith, on Saturday announced that the government would restructure the whole commission by appointing a new chairman and members.

The government on Monday appointed Helaluddin Nizami, a professor of accounting at Chittagong University, as a member of the commission.

Sources in the division said a chartered accountant was selected initially for the post of chairman after Muhith declared that the chairman would also be changed, but some quarters raised allegations against him saying he was involved in irregularities during his career at a private non-banking financial institute.

A number of high ups in the government are now lobbying so that Ziaul Haque Khandkar could continue as the chairman of the commission.

The decision on appointing a new chairman would be taken after Muhith returns to the country from Manila where he is attending the annual meeting of the Asian Development Bank.

Source: New Age

MJL Bangladesh makes fresh listing proposal to SEC

The MJL Bangladesh Limited on Tuesday submitted a fresh listing proposal to the Securities and Exchange Commission, mentioning that the company would give 200 per cent cash dividend to its shareholders before listing and compensate from the directors' account of the company if its share prices are traded below the IPO issue price within the six months of listing.  

'We have received a proposal from MJL Bangladesh and we will place it in the next commission's meeting,' an SEC official told New Age.

'The company has proposed that to be listed it will give 200 per cent cash dividend to its IPO shareholders. It has also agreed to compensate upto Tk 10 for each shares from the directors' account if the prices of the IPO shares fall below the issue prices within the six months after listing,' he said.

He said, 'The directors of the company have to deposit in a bank account Tk 40 crore to be used for compensation.'

'We have submitted a fresh proposal to the SEC and we are hopeful that the company will get regulator's nod to be listed this time.' MJL Bangladesh chairman Azam J Chowdhury told New Age.

MJL Bangladesh has been facing a listing deadlock after it went for initial public offering with a share price of Tk 152.40 under the controversial and currently suspended book-building method.

The company was trapped between the regulators' face off over its listing issue. The SEC twice extended listing deadline of the company.

Source: New Age

DSE plunges on panic selling

Dhaka stocks plunged on Tuesday as nervous investors went for heavy sell-offs as uncertainty about the government move to restructure the Securities and Exchange Commission intensified.

Besides, confusion among the investors also deepened over the rumours about possible delay in floating the Tk 5,000 crore Bangladesh Fund and introduction of tax on capital gain, said market operators.

The benchmark general index of Dhaka Stock Exchange, or DGEN, shed 125.67 points, or 2.09 per cent, to close at 5,865.70 points in volatile trading on Tuesday.

After the finance minister made public the probe report on January's stock market debacle and announced that the SEC would be restructured on Saturday, the DGEN lost 184 points in two days.

Turnover of the DSE also dropped by Tk 56 crore to Tk 453.04 crore on Tuesday.

Market operators said the general investors on Tuesday became nervous as a news spread that the appointment of the new SEC chairman would be delayed as the high ups in the government are in a disagreement about recruiting the new SEC chairman, replacing Ziaul Haque Khandakar.

The probe report recommended for ousting Ziaul and the finance minister on Saturday announced that the new SEC chairman would be appointed within two to four days.

'There is a lot of speculation in the market as to who will be the new chairman of the SEC. Besides, there is rumour that Ziaul might continue as SEC chairman as some government high ups want him to stay,' said an official of a brokerage house.

Market operators said the delay over submitting the registered trust deed of Bangladesh Fund by the Investment Corporation of Bangladesh also made the investors pessimistic about the future growth of the market.

Market insiders, however, said that the institutional investors on the day were inactive and some of them went for sell-offs. 

A stock broker said that some investors were also jittery over the rumour that the government would introduce tax on capital gain in the share market and make the use of tax identification number mandatory while opening beneficiary owner's account. 

Out of 248 traded issues, only 30 advanced while 207 declined heavily and 11 remained unchanged on Tuesday.

Salahuddin Ahmed Khan, a finance teacher of Dhaka University, said, 'Today's fall was in continuation of the previous day.'

'As there is a possible government move about restricting its officials of the concerned agencies it may have an impact on the market.'

'Liquidity crunch of the institutions and CPD's [Centre for Policy Dialogue ] recommendations on introducing tax on capital gain and TIN for BO accounts also de-motivated the institutional investors,' he said.

Source: New Age

Banks not to increase capital market exposure

Dhaka, May 3: Senior officials of the private and state-owned banks which have merchant banking and brokerage operations on Monday said that the banks would not increase their stock market exposure due to liquidity crisis they are facing currently.

They admitted of liquidity crisis at a meeting with the board of directors of the Dhaka Stock Exchange.

'We wanted to know the condition of the liquidity of the banks and whether they have any plan to increase their participation in the stock market,' said a director of the bourse present in the meeting.

 He said the bankers informed the bourse that the price hike of food items and raw materials in the international market put the banks in a liquidity shortage.

'For an instance, as the price of cotton has increased in the international market, banks have to provide their clients with more funds for buying cotton,' he said.

'The bankers said they would go with a wait-and-see policy about the capital market because of the shortage of liquidity and uncertainty about the future course of the capital market,' the director added.

Source: New Age

Dhaka stocks down on poor corporate disclosers

Dhaka, May 3: Dhaka stocks on Monday dropped for the third consequent day on a mild selling pressure triggered by poor corporate disclosers by a number of companies on the day, market operators said.

They said investors also remained uncertain about the market trend after the government on Thursday had made public the probe report on the January's stock market scam.

The general index of Dhaka Stock Exchange, or DGEN, lost 59.46 points, or 0.98 per cent, to close the day at 5,991.38 points.

Turnover on the bourse on Monday also declined to Tk 509.49 crore from Thursday's Tk 666.45 crore. 

Of the 248 issues traded on the day, 58 advanced, 183 declined, and seven remained unchanged.

An official of a brokerage house said dividends declared by 27 companies failed to stimulate the general investors.

'Investors considered the dividends poor and went for sell-offs on the day,' he said.

Investors are still waiting to see the impacts of the government decisions on the market after the finance minister made the probe report public on Thursday and announced a list of actions the government plans to take, a DSE stockbroker said.

'A section of general and institutional investors remained inactive on the day,' he added. 

Trading on the DSE started on a positive note on the day, with the index gaining 23 points in the first five minutes of the trading. But the DGEN had fluctuated frequently for the next one hour, before ending the day in the negative zone.

The companies which declared dividends on Monday were Renata, Aramit Cement, Information Services Network, Kay & Que, Ibn Sina, Golden Son, Rangpur Foundry, BD-Thai Aluminum, Monno Jute Stafflers, CMC Kamal, Aramit, Ambee Pharma, KPCL, Beach Hatchery, Sonar Bangla Insurance, Provati Insurance, Global Insurance, Phoenix Insurance, Beximco Synthetic, Bextex, Shinepukur Ceramics, Rupali Insurance, Beximco, and Standard Insurance.

Salahuddin Ahmed Khan, a Dhaka University finance teacher, said, 'Although it was expected that the market would gain after the government's move on the probe report but it seemed investors were cautious about the impacts of the move.'

Stock market analyst Akter H Sannamat said, 'It seems investors were unhappy with a number of corporate results, resulting in a fall in the share prices on Monday.'

Source: New Age