Law expert included in probe body

The government Tuesday appointed a counsel to the stock scam probe committee for assisting the body in legal matters.

"The government has appointed Nihat Kabir as the fourth member of the committee," head of the share market scam probe committee, Khondaker Ibrahim Khaled said.

Meanwhile, Mr Khondaker Ibrahim Khaled has said that the body will be able to complete the investigation process within the stipulated time-frame.

He said this while visiting Dhaka Stock Exchange (DSE) Tuesday. Two other members of the probe committe Taufiq Ahmed Chowdhury and Mohammad Abdul Baree were present.

Mr Ibrahim Khaled said that they have made significant progress in the inquiry.

" To complete the inquiry report within two months we have fixed up some priority areas," he added.

"Most of the general people want to know the reasons behind the unusual fall in the market. Our investigation also gives thrust to unearth the reason behind the recent crash, said Mr Khaled, also the Chairman of the Bangladesh Krishi Bank.

The probe committee was formed on January 25 last to investigate the recent unusual fall in the stock market which prompted frequent agitation among the investors of stock market in recent times .The committee was given two months time to complete its probe report.

During the visit, President Shakil Rizvi of DSE showed and briefed the probe committee on operational aspect of the DSE. He assured all kinds of cooperation to them.

Mr Shakil also supported the Finance Minister's view on 'forced sell' of the shares. Recently the Finance Minister commented that forced selling is 'unethical' and it will be stopped.

Meanwhile, the probe committee members on Tuesday sat with the members of the Capital Market Journalists Forum (CMJF). The members shared their opinion on the recent share scam with the probe committee.

Read the original story on the Financial Express

Dhaka stocks slip after two days of big gains

Dhaka stocks plunged more than three per cent Tuesday after two consecutive days of heavy gains amid profit taking and signs that market volatility remains a cause of concern, dealers said.

The benchmark DSE General Index (DGEN) slipped 3.38 per cent or 216.24 points to end at 6,173.39 as investors booked profit, resulting in an across-the-board price correction in major sectors.

The broader DSE All Shares Price Index (DSI) ended at 5,119.72, shedding 3.32 per cent or 175.88 points. Blue chips making up the DSE-20 index plummeted 5.26 per cent or 227.19 points to 4,094.58.

The market gained 130 points in the opening ten minutes but declined steadily throughout the session on profit taking in all sectors except the non-banking financials which gained 0.86 per cent.

"After major spikes in the previous two sessions, it was expected that market will see some corrections in trading," said a fund manager, on condition of anonymity.

He said investors were very cautious, reflecting the sweet-sour experiences of the recent past. "It shows volatility is far from over and remains a major concern".

Given the jumpy mood of the investors, many traders opted for profit booking rather than hanging on for more profit, which led to the fall, he added.

"Profit taking by investors was the main reason behind the decline and it was normal price correction," said Ahmad Rashid Lali, managing director of the Rashid Investment Services.

He said turnover, which marked 67 per cent growth on the previous session, was the only positive element in Tuesday's trading, indicating broader participation in the market.

Total turnover stood at Tk 9.63 billion, still three and a half times lower than the record set on December 5 last year. Out of 252 issues traded on the day, only 28 issues advanced and 224 declined.

National Bank led the turnover list with shares worth Tk 684.20 million changing hands. It was followed by Peoples Leasing, Beximco Limited, Bay Leasing, Union Capital, Southeast Bank, International Leasing, Grameenphone, Prime Finance and UCBL.

A total of 80.49 million shares changed hands against 52.95 million on Sunday, the previous session. The number of trade deals also increased to 171,487, which was 93,814 a session back.

Market capitalisation stood at Tk 2,785.24 billion (US$39.22 billion) - still $12 billion less than the historic high set on December 5, 2010. The market cap was Tk 2871.49 billion in the previous session.

Major sectors including banks, telecommunications, pharmaceuticals and fuel and power lost 4.29 per cent, 4.42 per cent, 3.46 per cent and 4.75 per cent respectively.

Other sectors such as ceramics, mutual funds, cement and tannery lost 8.21 per cent, 6.08 per cent, 3.98 per cent and 1.01 per cent.

The day's top losers were Southeast Bank, City General Insurance, RAK Ceramics, Keya Detergent, Meghna Petroleum, Malek Spinning, Prime Bank, National Bank, All Textile and Rahima Food.

Prime Finance and Investment Ltd was the highest gainer posting a rise of 8.37 per cent. It was followed by First Lease Finance and Investment Ltd, ACI Limited, Union Capital, Uttara Finance, IDLC Finance, UCBL, Eastern Lubricant United Leasing and Bay Leasing.

Read the original story on the Financial Express

SEC finds lacking in margin loan guideline

Mohammad Mufazzal

The securities regulator sent back the merchant banks' guideline on margin loans, terming it "incomplete and unclear" and demanding incorporation of individual client's limit in the modus operandi, an official said Tuesday.

The Securities and Exchange Commission made the observation when the merchant bankers association submitted its guideline on margin loans to the regulator at its office in Motijheel.

SEC officials discussed the draft with the association members and sought some changes in the planned guideline, pointing out some gaps and recommending a few suggestions so as to make it investor-friendly.

"We told them to make the guideline clear with specific examples for each of the points. We also ask them to incorporate two new points to make the guideline complete," an SEC official said.

"We have asked them to add individual client's lending limit and specify clearly as to how much shares a merchant bank can purchase for its own portfolio," he said.

The association has been advised to submit the guideline again after making the necessary changes and incorporating the points suggested by the regulator, he added.

"We just have done our job. It is now up to the merchant banks whether they are going to add these points or not," the official said, adding other points in the guideline were up to mark and protected investors' interest.

The association prepared the guideline after the regulator declared last month that it would not fix the margin loan limit for investors any longer and would now allow merchant banks to set the cap on their own.

The association which represents 37 merchant banks now operating in Dhaka and Chittagong has been tasked with drafting a guideline based on which they can set margin loan limits.

The regulator has said it would not intervene in margin loan-related issues any more once the guideline is finalised and approved by the SEC.

"After the guideline is approved, the merchant bankers can revise margin loan ratio once in a quarter or six months," the official said.

In the guideline that the association has prepared, the banks have suggested setting the ratio at 1:2 -- in line with the existing limit fixed by the regulator last month.

A merchant banker said they had a threadbare discussion on the guideline with the SEC officials.

"The regulator has made some specific suggestions on single client's limit and other issues. Personally, I don't think it would be wise on our part to set such limit for an individual investor," the banker said.

"There are big and small investors. We should not impose any barrier for our clients who are big and confident," he added.

Read the original story on the Financial Express

SEC recommends 6-member committee to execute money market decisions

Asif Showkat Kallol

The probe body on stock market scam has got a legal expert as its new member who will recommend legal actions against alleged unscrupulous stock traders involved in recent share market scam.

Banking division of Finance Ministry in a circular issued on Tuesday announced appointment of lawyer Nihad Kabir as the legal expert of the committee.

On January 25, the government formed a three-member committee headed by Krishi Bank Chairman Khondkar Ibrahim Khaled to probe into the massive ups and downs in the stock market in the last two years.

Besides, the Securities and Exchange Commission (SEC) on February 20 gave its consent to the banking division on formation of a new committee for making country's stock market stabilised for protecting the interests of the share investors.

The SEC suggested for a six member committee in this regard, sources said.

As per the SEC proposal, the members include – deputy secretary of finance division, executive directors of the SEC and the Bangladesh Bank, general manger of the Investment Corporation of Bangladesh, and a representative from the Insurance Development and Regulatory Authority (IDRA) and a member of the Association of Bankers.

The proposed six-member committee will executive the decisions of the money market regulators –Bangladesh Bank, SEC, IDRA, and Register of Joint Stock Companies, source said.

Commenting on co-opting a lawyer in the probe committee, Ibrahim Khaled, chairman of the committee, said a lawyer in the committee was needed since it already got economists and bankers.

After visiting the DSE on Tuesday, he said "The probe committee has now become a balanced one."

"We are doing our job in full swing and we've also made some progress," Ibrahim Khaled said.

"We'll be able to finish the investigation and submit the report within stipulated time," he added.

Earlier, the finance ministry in an observation said that share prices of many companies were going down, but the companies were not buying back their shares.

The proposed committee will execute the buy back method as directed by the finance ministry.

The proposed committee will also execute commercial bank's exposure limit in the country's two bourses.

As per the Bank Company Act 1991, the commercial banks require to expose only 10 per cent of their capital in the country's share market.

Read the original story on the Daily Sun

Shares fall as institutional investors remain sidelined

Share price, on the Dhaka Stock Exchange (DSE) fell yesterday as small investor went on a selling spree to cash in on the gains of last two sessions.

The market opened with an upbeat mood and the key DSE General Index (DGEN) jumped 128 points in the first six minutes. But subsequent steep fall ate up the early gains of the session.

The DGEN index declined 216 points, or 3.38 percent, to close at 6,173 points at the end of the session.

The market went up in pervious two sessions following a government announcement of extending fund support to stabilise the market.

But the market plunged yesterday as institutional investors were less active while the fund support was also inadequate, said Salahuddin Ahmed Khan, a former chief executive officer of the DSE. He suggested that the market get continuous fund support.

All the sectors reflected the market trend of the day but non-banking financial institutions which gained 0.86 per cent on the hope of dividend declaration.

Among the major sectors, bank, telecom, pharmaceuticals and fuel and power lost 4.29 per cent, 4.42 per cent, 3.46 per cent and 4.75 per cent respectively.

The broader DSE All Share Price Index (DSI) shed 176 points, or 3.32 per cent, to finish at 5,120 while the DSE-20 index of blue-chip shares dropped 227 points, or 5.25 per cent, to 4,094.

Day's turnover amounted, however increased by 66.7 per cent to Tk 9.7 billion compared to previous session's turnover.

A total of 252 issues traded on the day of which 224 declined and the rest 28 advanced.

National Bank topped the turnover leaders of the day with shares valued Tk 684.20 million changing hands.

The other turnover leaders were Peoples Leasing and Finance Services, Beximco, Bay Leasing, Union Capital, Southeast Bank, International Leasing and Finance Service, Grameenphone, Prime Finance and United Commercial Bank.

Prime Finance was the top gainer of the day followed by First Lease Finance and Investment Ltd, ACI, Union Capital, IDLC, United Commercial Bank, Eastern Lubricant, United Leasing and Bay Leasing.

The worst losers were Southeast Bank, City General Insurance, RAK Ceramics, Keya Detergent, Meghna Petroleum, Malek Spinning, Prime Bank, National Bank, All text and Rahima Foods.

Read the original story on the Daily Sun

Stock probe body expanded

The government has appointed another new member to the stock crash probe body to assist it in legal matters, said its head on Tuesday.

The number of the committee members now stood at four, headed by Khandker Ibrahim Khaled.  "Nihat Kabir has been made the fourth member of the body," said Ibrahim Khaled, at a views-exchange meeting with stock market reporters.

He said, "Earlier I had requested the finance minister to induct a legal expert in the committee as there are many things in the investigation which need legal attention."

"A gazette has been issued in this regard," he added.

About the progress of investigation, Khaled said the committee will submit its report within the stipulated time frame as investigation is in full swing.

Earlier in the day, the probe body visited to the Dhaka Stock Exchange (DSE) and met the DSE directors and representatives of Merchant Bank Association, Bangladesh Association of Publicly Listed Companies and asset management organisations.

In response to a question on infiltration of black money in the stock market, the body chief said, "We'll try to get information in this regard from the NBR (National Board of Revenue)."

On January 25, the government formed a body to probe the recent stock market crash that triggered violent protests by angry investors and forced a freeze on trading.

The government has asked the committee to submit its investigative reports within two months.

Other two members on the committee are director general of Bangladesh Institute of Bank Management (BIBM) Dr. Toufic Ahmad Choudhury and ex-president of Institute of Chartered Accounts of Bangladesh (ICAB) Abdul Bari.

Read the original story on The Independent

Stocks down on profit booking

Stocks fell on profit booking on Tuesday after sharp rally in last two days.

Benchmark index DGEN dropped by 216 points or 3.38 per cent to 6173.38, after touching the day's high at 6518.41 in morning session and lowest at 6150.21 in the closing session. Market opened with a positive tone in early trading sessions, but profit-booking and selling pressure in mid-session pulled the marker down significantly, said dealers.

Some, however, said, investors are still in doubt about the market's stability as confidence is yet to be gained fully despite the government's efforts to prop up the market.

Turnover rose to Tk. 8.90 billion, up by 66.7 per cent over the previous session. Out of the 252 issues traded, 28 gained and 224 lost.

All sectors closed in the negative territory except non-banking financial institutions which gained 0.86 per cent on expectations of dividend declaration.

But the major sectors such as banking, telecommunications, pharmaceuticals and energy declined 4.29 per cent, 4.42 per cent, 3.46 per cent and 4.75 per cent respectively.

Southeast Bank topped the losers' list with a drop of 10.57 per cent as its corporate declarations failed to satisfy investors' appetite.

The bank announced a 20 per cent stock dividend and a 10 per cent cash dividend for the year 2010.

Other top losers include City General Insurance, RAK Ceramics, Keya Detergent, Meghna Petroleum, Malek Spinning, Prime Bank and NBL.

National Bank Ltd (NBL) was the top turnover leader with shares worth Tk. 684.19 million changing hands, followed by Peoples Leasing, Beximco Ltd, Bay Leasing, Union Capital, Southeast Bank, ILFSL, Grameenphone, Prime Bank and United Commercial Bank.

Prime Finance, First Lease International, ACI, Union Capital, Uttara Finance and IDLC were the prominent gainers.

Read the original story on The Independent

Stocks tank on profit-taking

Share prices declined yet again after a rise for a couple of days, as profit-taking sales by investors caused a downslide Tuesday.

The benchmark general index of Dhaka Stock Exchange (DGEN) slumped 216 points, or 3.4 percent, to 6,173.38 points, while the selective price index of Chittagong Stock Exchange dropped 347 points, or 2.9 percent, to close at 11,227.

The market got off to a flying start, gaining more than 130 points within the first five minutes of trading but went downward after that and continued until the close of trading on the DSE.

Share prices of the major sectors such as banks declined 4.3 percent, pharmaceuticals 3.4 percent, fuel and power 4.7 percent and the telecommunication 4.4 percent, while non-bank financial institutes gained 0.8 percent.

Finance Minister AMA Muhith asked the merchant banks on Friday not to go for 'forced sales' when the market is volatile. His declaration resulted in massive gains in share prices of most sectors.

Saiful Islam, managing director of BRAC EPL Stock Brokerage Ltd and vice chairman of BRAC EPL Investments Ltd, said: "It is very much expected and the price correction was unavoidable because most of the investors pocketed 20 percent profit today."

Investors' gained confidence after observing the current market situation because trade volume increased compared to the previous day of trading, he added.

The daily turnover stood at Tk 962 crore, up Tk 385 crore from the previous day. Islam said it was a positive sign that the daily turnover has increased.

Shakil Rizvi, president of DSE, said: "Investors went into profit-taking sales."

The government initiatives are restoring normalcy in the market, he added.

Rizvi also said the government and the merchant banks should decide upon guidelines on 'forced sales' for investors as soon as possible.

A total of 80.48 million shares were traded against 52.95 million in the previous trading session. The number of trade deals came down to 1,71,487, which was 93,814 in the previous session.

The total market capital increased to Tk 2,87,524 million against Tk 2,87,149 million of the previous session.

Of the total 252 issues traded on the DSE floor, 28 advanced and 224 declined. National Bank was the top turnover leader with 41.54 lakh shares worth Tk 68.41 crore.

The other turnover leaders were People's Leasing and Financial Services, Beximco, Bay Leasing and Investment, Union Capital, Southeast Bank, International Leasing and Financial Services, Grameenphone, Prime Finance and Investment and United Commercial Bank.

Read the original story on The Daily Star

Lack of regulation blamed for share market crash

Economists and left-leaning political activists in a view-exchange meeting on Tuesday blamed a lack of regulation and allowing the share market manipulators of 1996 to get off scot-free for the recent capital market debacle.

Investors took to streets and staged demonstrations because they lost money, not for any political reasons, they told the meeting on 'share market crash and the economics of looting' organised by Ganasanghati Andolan at the National Press Club.

A huge amount of money has been siphoned off the market, even smuggled out of the country, by the market manipulators, the speakers alleged and demanded meting out punishment to them and immediate compensation for retail investors.

When the indices of the country's stock exchanges had been soaring abnormally, the regulators and the government expressed satisfaction at the market trend; but it was the time when they should have taken measures to bring the overheating market under control, said Abu Ahmed, a Dhaka University economics professor and a leading equities market analyst.

Economist Anu Muhammad said the probe committee report on 1996 share market crash was yet to be made public, which paved the way for market manipulation again this year.

He said, 'The manipulation was done by a powerful syndicate of a few people belonging to the Awami League, BNP, and other political parties and the contradictory comments made by the prime minister and a ruling party lawmaker prove how powerful the syndicate is.'

If the regulators remain subservient to the very people who have to be kept on a tight rein, they practically act as the manipulators' helping hands, he said, adding that the manipulators had always remained sheltered under the umbrella of power and no one could touch them.

Anu Muhammad demanded immediate publication of the probe committee reports on both 1996 and 2011 share market crashes to ensure punishment of the manipulators.

Columnist Syed Abul Maqsud said accusing the BNP of share market manipulation by the prime minister and the finance minister was nothing but rubbing salt into the wound.

He heavily came down on the government for physically assaulting the investors traumatised by heavy losses, instead of standing by their side, and recalled that a number of investors had committed suicide after the 1996 capital market crash.

[On the other hand,] 'If a few of the millionaires and ruling party leaders would have lost every thing, the government would surely have come to their aid,' he said with heavy sarcasm.

Ganasanghati Andolan central leader Abul Hasan Rubel also spoke in the meeting chaired by chief coordinator of the organisation Zonayed Saki.

Read the original story on the daily New Age

Stocks make a U-turn

Dhaka stocks reversed into a decline on Tuesday after a two-day gaining streak as many investors went for selling shares, some to take profits and others to get out of the market.

The turnover of the Dhaka Stock Exchange on the day advanced by around Tk 385.20 crore due to the increased volume of trading after thin trading in the last two days.

The DSE general index, DGEN, lost 216.23 points, or 3.38 per cent, on the day with the turnover standing at Tk 962.95 core.

The index had gained around 810 points on the past two trading days after suffering a massive loss in the past few weeks. The turnovers on the past two days were Tk 577.71 crore and Tk 689.30 crore respectively.

Out of the 252 issues traded on Tuesday only 28 advanced and 224 declined.

Salahuddin Ahmed khan, a Dhaka University finance teacher, termed the declining trend on Tuesday's market as a 'downtrend syndrome'.

'The trend of the market on Tuesday is alarming as it indicates a downtrend syndrome,' Salahuddin told New Age.

'When the investors go for blanket sales of their portfolios for a marginal profit or bearing a minor loss, it may lead the market to another debacle, if continues,' he warned.

Salahuddin said, 'The general investors are yet to get back their confidence in the market.'

'The retail investors also need to shake off the tendency to earn profit from low-profile shares and go for shares with strong fundamentals to keep the market in the black,' he explained.

The general index of the Dhaka bourse that started the day on an upbeat mood had gained 128 points in the first 10 minutes but failed to keep up the momentum as the day advanced. After wavering for about one hour, the index started to fall from 12:00 noon due to a heavy selling pressure of the retail investors.

The pulse of the general investors was jumbled on the day as many investors went for selling off their portfolios to leave the market for good after recovering as much as they could of their losses, while some others bought shares on the hope that the market would rise further.

Harun Jamil, a retail investor who sold out his portfolio, said, 'I don't want to take any more risk as the market has been behaving so erratically in recent times.'

He said, 'In the past two weeks I had lost more than 60 per cent of my investment. As I recovered some of my losses in the last two days' sharp rise, I have decided to sell off all my shares.'  'I am still in loss but I prefer to leave with it,' he added.

The retail investors had gone on rampages on the streets of Motijheel as the DSE general index had lost 1,198 points over the previous two weeks. Waking up to the reality, the government took a number of measurers, including injecting fresh funds, to stabilise the market.

National Bank topped the turnover leaders with shares worth Tk 68.41 crore traded on Tuesday.

Read the original story on the daily New Age

Stocks probe panel expanded

The government has appointed a counsel to the stocks probe committee to assist it in legal matters, says the committee chief.

Ibrahim Khaled, at a views-exchange meeting with stock market reporters on Tuesday, said Nihat Kabir had been made the fourth member of the committee.

Khaled, also chairman of the Bangladesh Krishi Bank, said, 'I had requested the finance minister to include a counsel to the committee as there are many things in the investigation which need legal attention.'

Finance minister A M A Muhith approved the proposal to appoint Nihat, the committee chief said. 'A gazette has been issued in this regard.'

Expressing satisfaction over the progress in the investigation, he said, 'The probe report will be submitted to the finance minister in due time.'

'The minister will decide whether the report will be made public or not,' he added.

Read the original story on the daily New Age