DSE bounces back with thin turnover

Dhaka stocks bounced back to an upward trend on Thursday as institutional buyers, as per the directive of the government, kept the market afloat after five days of continuous slide, market operators said.

Officials of Securities and Exchange Commission said that institutional investors like Investment Corporation of Bangladesh and other brokerage houses and merchant banks were asked to buy shares on the day so that the market did not fall further.

The general index of Dhaka Stock Exchange, or DGEN, advanced by 60.05 points, or 0.97 percent, to close at 6,192.61 points amid a topsy-turvy trading on the day.

'The DGEN fluctuated heavily today and whenever the index took a slide, institutional investors bought shares in small volumes,' said a market operator.

As the jittery retail investors refrained from investing, the turnover on the day hit a seven week low to Tk 476.82 crore compared to Tk 611.65 crore on the previous day. On March 1 the daily turnover was Tk 431.71 crore.

Out of 253 traded issues on the day, 212 advanced slightly while 38 declined and three remained unchanged.

Retail investors remained panicked for the last few days following rumours about the government move on the probe report on January's stock market debacle.

Salahuddin Ahmed Khan, a Dhaka University finance teacher, said, 'The investors on the day continued with the wait and see policy as they were still wary about the government's move with regard to the probe report.'

Source: New Age

DSE rejects MJL listing

The board of directors of the Dhaka Stock Exchange on Sunday rejected the listing application of Mobil Jamuna Lubricants Ltd.

The board, headed by DSE president Shakil Rizvi, rejected the company's latest proposal that it would issue 30 per cent bonus share to all shareholders before listing.

A source in the meeting told New Age that even if the company issued 30 per cent bonus share, price earning ratio of a share would remain over 60, meaning the price was still too high.

He said that with the rejection of the DSE, the company might have to refund the initial public offering subscription fees to the shareholders as the deadline to settle the listing issue is April 14.

The company's IPO process and listing issue fell into controversy after the January's stock market debacle as stock market experts and general investors criticised the company for its over-priced shares, which was set by the controversial book-building method.

The MJL on January 2 went for initial public offering with a share price of Tk 152.40 under the book-building method with a condition set by SEC that the company would buy back its shares if the price of share comes down below the issue price.

After the government suspended book-building method on January 20, The SEC on March 22 asked DSE to list the company with a condition that it would compensate the shareholders from its premium account if the share price comes below the issue price in six months. There was legal complication to go for buy-back as the existing rules do not support such move.

The DSE board, however, on March 24 rejected the listing application of MJL Bangladesh under the SEC condition saying that the relevant rules do not support such compensation.

The SEC extended the MJL listing time by 15 days as per the company application as the original deadline was supposed to expire on March 31.

After holding some informal discussions with some DSE directors, the company informed DSE that it would issue 30 per cent bonus shares for shareholders to bring down the share price to around Tk 116.

'The board finally decided to reject the listing of the MJL today [Sunday] as the issue became very complicated,' said a director of the bourse.

The director also said that in the probe committee report there was heavy criticism of the book building method and recommendation to reform it. 'As the method is currently suspended so it would be wise not to enlist the company at this moment,' he said.

Source: New Age

Probe report to be published soon: Muhith

The finance minister, AMA Muhith, hoped that the probe report on the share market scam would be published very soon which he earlier said it would take 10 to 15 days.

He also said his ministry would 'edit' parts of the probe report on stock market scam that requires further investigation before making it public.

'The ministry has taken the responsibility for looking into the whole report, as it does not needlessly want to play any part in humiliating anybody,' he said.

The finance minister was speaking to reporters after a pre-budget meeting with the parliamentary standing committees on finance, planning, public accounts and government affairs at the NEC conference hall on Sunday.

Muhith made the comments apparently in a bid to appease the critics who expressed doubt that the government would deliberately delete the names of those widely suspected involved in the scam as they are MPs and pro-government businessmen.

Claiming that a section of the media misquoted him, Muhith categorically ruled out comments attributed to him that influential people of the stock market were mightier than the state.

'On the day the probe committee submitted its report, I just said the government, if necessary, might not publish unverified information.'

'But, without understanding my comments, it has been published and circulated that I would publish the report omitting the names, which is not correct and realistic,' added the finance minister.

Muhith said the finance ministry would evaluate the probe report and conduct further investigation according to the recommendations put forward.

'Before making public, the parts of the probe report on stock market scam that require further investigation will be edited. The ministry does not needlessly want to play any part in humiliating anybody's character,' he said.

Source: New Age

Stock investors denied justice: BNP

The BNP standing committee member, Nazrul Islam Khan, on Sunday said the investors in the capital

market had been denied justice and alleged that ruling party men had been involved in the share market scam.

'The helpless small investors, who did not get justice from the government, are now seeking justice from Allah,' he said while addressing a discussion meeting marking at city's Bhasani auditorium.

Demanding disclosure of the names of the masterminds of the share market scam, the BNP leader said he dad doubt if the government would make public the names of the masterminds involved in the scandal as the ruling party leaders themselves had been involved in it.

The discussion was organised making the death anniversary of Jatiyatabadi Sramik Dal's Dhaka city unit leader Shahidul Islam Chowdhury.

Nazrul Islam Khan, also the president of Sramik Dal, BNP's front organization, vented his anger at the inertia of the party activists and announced that a new committee of the organisation would soon be named making room for dedicated leaders and activists.  

He lamented that the presence of Sramik Dal leaders and activists were hardly visible in any important programme of the BNP.

Nazrul accused the government of transferring pro-BNP workers to the offices outside Dhaka.

The BNP alleged that the government had failed to implement any of its election pledges causing resentment among the people.

He also accused the government of signing 'anti-state' agreements to serve the interests of its 'foreign masters' who, he said, had brought them to power.

Presided over by Dhaka city Sramik Dal president Rehan Ali, the meeting was also addressed, among others, by Sramik Dal general secretary Jafrul Hasan, senior vice-president Abul Kashem Chowdhury and organising secretary Nurul Islam Nasim.

Source: New Age

Stocks rise for second week shrugging off rumours

Dhaka Stock Exchange last week continued to rally for the second consecutive week as investors shrugged off the rumours of a possible market collapse once the probe committee on January's stock market debacle submitted its report.

The benchmark general index of the bourse, DGEN, had gained 188.50 points, or 2.97 per cent, in the last week to close at 6,540.60 points.

The average daily turnover of the bourse also increased by 26.46 per cent to Tk 1,052.69 crore from that of Tk 832.43 crore of the previous week.

'Rumours about the content of the probe committee report abounded throughout the week. Investors, however, waved aside the rumours and went for heavy buying, hoping that share prices would rise, once the committee submitted its report,' said a stockbroker.

The probe committee headed by Krishi Bank chairman Khondoker Ibrahim Khaled handed over the report to finance minister Abul Maal Abdul Muhith on Thursday morning.

The committee blamed the Securities and Exchange Commission and a number of big market players for the January's crash.

Share prices, however, advanced on Thursday after investors heard another rumour on the grapevine that the government would not make public the names of the big players involved in market manipulation.

The trading on the bourse began amid a positive mood on Sunday, the opening day of the week, as the investors expected that the market would rise, following a news report published in the previous week that the government might allow investment of undisclosed money in the capital market as proposed by the Investment Corporation of Bangladesh.

The general index rose by 94.90 points, or 1.49 per cent, on the day.

The upbeat mood continued on Monday, with the DGEN gaining 88.87 more points, or 1.38 per cent.

The index, however, lost 80.07 points, or 1.23 per cent, on Tuesday, after rumours spread that the probe committee would name big players in

the report for the market crash and the market would crash again as the big players would stop trading.

The downfall continued on Wednesday with the DGEN inching down by 1.76 points, or 0.03 per cent before rebounding strongly on Thursday.

Out of 262 issues traded during the week, 176 advanced, 79 declined and seven issues remained unchanged.

'Although many of the investors went for heavy buying, some remained cautious last week. We will have to wait few more days to find out the impact on the trading of the probe committee report and the finance minister's announcement on Thursday evening that the government would

delete the big players' names from the probe committee report,' said the stockbroker.

Source: New Age

Stocks fall on probe report rumours

Dhaka stocks fell on Tuesday after four-day gains as retail investors went for heavy sell-offs as romours about inclusion of names of some big market players in the investigation report on January's stock market debacle resurfaced on the day.

The benchmark general index of Dhaka Stock Exchange, or DGEN, slid by 80.06 points, or 1.22 per cent, to close at 6,455.80 points on Tuesday from 6,535.87 points on Monday.

Out of the 261 issues traded, 159 declined, 94 advanced and eight remained unchanged.

'Retail investors became nervous again today [Tuesday] after a number of newspapers carried out reports that a large number of big market players will be accused in the probe committee report on the January's share market debacle,' said a stockbroker.

He said throughout the trading session retail investors had discussed about the names who would be included in the probe committee report. 'As a result the DGEN fluctuated heavily throughout the trading session,' he said.

He said some of the investors also went for profit-taking sell-offs after the market had advanced for previous four days.

Share prices increased for four days on rumours that the investigation committee, which might submit its report on Thursday, would not name any individual. Before the four-day bull-run, market was in damp mood for few days after some newspapers

had reported that a large number of big players would be named.

'The rumours surrounding the investigation report has heavily influenced the trading at the bourse in the last two weeks. The fluctuating trend of DGEN will continue until the report is made public,' said another stockbroker.

The turnover of the bourse on Tuesday increased to Tk 1,148.10 crore from that of Tk 1,060.19 crore traded on Monday.

Aftab Auto topped the list of turnover leaders

with 15,74,750 shares worth Tk 48.43 crore traded on the day.

The other top-10 turnover leaders were Confidence Cement, Beximco, Bextex, Union Capital, Bay Leasing and Investment Ltd, Peoples Leasing and Financial Services Ltd, Golden

Son, Titas Gas and Bangladesh Finance and Investment Ltd.

Source: New Age

DSE decides not to accept conditions of SEC

Ahmed Shawki

The Dhaka Stock Exchange at a board meeting on Thursday decided not to list Mobil Jamuna Lubricants Bangladesh Ltd with the compensation condition given by the Securities and Exchange Commission.

'The DSE board took the decision as it found the condition is impractical,' DSE senior vice-president Ahasanul Islam told New Age after the meeting.

The SEC on Tuesday asked the DSE to take necessary actions according to the bourse's listing regulations for enlistment of MJL Bangladesh with a condition that the company would compensate its primary share holders from company's premium account if the market price of shares drops below the issue price within six months of its listing.

'Analysing the Companies Act thoroughly we have found that the relevant clause of 57-2c does not allow any company to compensate on such ground,' he said.

'We will send a letter to the commission conveying our decision,' he added.  

MJL Bangladesh on January 2 went for an initial public offering with a share price of Tk 152.40 each under the book-building method. As the SEC had suspended the book-building method on January 20 as per a government directive, the company has been facing complications in listing its shares with the bourses.

The company had collected Tk 400 crore from the public offering under a condition given by the SEC that it would buy back its shares if the price falls below its issue price in one month after its listing with the bourses.

The commission, to avoid the legal complications due to the suspension of the book-building method, proposed MJL Bangladesh Ltd to give compensation for the IPO holders for a time frame of six months.

MJL Bangladesh Ltd on last week sent a letter of undertaking on this regard to the SEC where it agreed to the condition given by the commission.

The SEC, meanwhile, sent a letter to the DSE on Thursday allowing the bourse 15 days more for listing of MJL Bangladesh.

As per the existing rules, the MJL Bangladesh's listing is supposed to be completed by March 31.

Read the original story on the daily New Age

DSE continues to fall as investors’ worry about economy intensifies

Dhaka stocks plunged for the third consecutive day on Thursday, with the general index of Dhaka Stock Exchange, the DGEN, losing 176.09 points, or 2.77 per cent as investors' worry about the country's overall economic condition intensified further.

The DGEN closed the day at 6,164.81 points, posting a loss of around 362 points over the last three trading days.

The turnover of the bourse on Thursday was Tk 867 crore, marking a decline of Tk 197 crore from the Tk 1,064-crore turnover on Tuesday.

Out of the 250 issues traded on Thursday, only 30 advanced, while 217 suffered price falls and two remained unchanged.

Market operators said the alarming economic indicators and the discouraging statement about the Bangladesh Fund made by the International Monitory Fund recently made a huge negative impact on the investors, making them more nervous about their investment.

A news report run by a major vernacular daily on Thursday also deepened the panic among the investors, prompting them to go for heavy sell-offs on the day, they said.

A senior official of a brokerage house said, 'The retail investors have been banking a great deal on the Tk 5,000-crore Bangladesh Fund. But, after the IMF had forecast that it would add a new degree of volatility to the market, their hopes were shattered.'

'Following a news report run by a Bangla daily that the country may be approaching a great economic crisis, the investors went for blanket sell-out, fearing another market debacle,' he observed.

Trading on the DSE started downbeat on Thursday, with the DGEN losing 101 points in the first five minutes. The DGEN curve had continued to nosedive for the next one hour, losing 233 points by 12.10 pm.

At this point, two institutions became active and went for buying shares to support the market.

An insider, however, said, excepting those two, the rest of the institutional investors on Thursday went for heavy sell-offs.

Experts guess the Libyan crisis will also make an adverse impact on the country's economy in the long run.

One of them said, 'As the Bangladeshi expatriate workers are returning from Libya, the country will not only face a shortage of remittance inflow but will also have to support them and their families using domestic resources.'

'The continued price hike of US dollar against taka and the possibility of an intensified credit crunch in the money market would also affect the securities market,' he added.

Read the original story on the daily New Age

Probe body stock market debacle to submit report by this month

The probe committee on the stock market debacle in January will submit its report by the end of this month, the committee chief, Khondokar Ibrahim Khaled, told New Age on Monday.
The committee had conducted investigations for the past three months, while it had talked to at least 100 people of different professions, including members of Dhaka and Chittagong stock exchanges, leaders of the Association of Bankers, Bangladesh, journalists, and other people related to the stock market.
Committee sources said the investigation had been completed and the committee was now drafting the report.
Although Ibrahim Khaled, who is also the chairman of Krishi Bank, declined to make any comment on the outcome of the probe, committee sources said they detected incidents of unusual trading, which had led to the stock market crash, by a number of known and unknown figures, including politicians belonging to both the ruling Awami league and the main opposition Bangladesh Nationalist Party, businessmen, government officials, and bankers.
Following massive plunges in share prices on Dhaka and Chittagong bourses, the government on January 26 formed the 3-member investigation committee headed by Ibrahim Khaled and with Bangladesh Institute of Bank Management director general Toufic Ahmad Choudhury and Institute of Chartered Accountants of Bangladesh former president Abdul Bari as its members.
The committee was asked to submit its report within two months but later the time was extended for one more month. Nihat Kabir, a Supreme Court lawyer, was also included in the committee.
The committee was asked to find the causes of the massive overpricing of share as well as frequent ups and downs of share prices in the previous two years.
It was also tasked with identifying the people and institutions that had withdrawn large amounts of money in unusual ways by taking advantage of the overheated market through direct listing, book-building, and fixed price methods of initial public offering.
Read the original story on the daily New Age

Volatile trading sends Dhaka stocks into red again

Ahmed Shawki
Dhaka stocks went back into negative zone in the past week amid volatile trading marked by huge fluctuation in share prices as retail investors were confused about the fate of the government’s ‘bail-out fund’ for and long-standing stability of the market. The general index of the Dhaka Stock Exchange, or DGEN, had lost 227.27 points, or
3.42 per cent, in the past week to close at 6,411.91 points after gaining 1,210.78 points the week before.
Before the previous week, the DGEN had shed 1,957.50 points as panic-stricken retail investors went for heavy sell-off in five weeks in one of the severe market debacles in the country.
In the past week’s topsy-turvy trading, the DGEN went up and then down on every alternate day.
‘Share trading on the DSE in the past week remained choppy as the DGEN had sharp fluctuations. The trend shows that the investors were still confused about the long-standing stability of the market and went for heavy-sell off whenever they got any amount of profit,’ an analyst said.
‘The news of uncertainty over the formation of Tk 5,000 crore Bangladesh Fund by 10 state-run financial institutions for investment in the money and capital market, the DSE’s president election and a host of news of liquidity crisis in banking sector contributed to the return of nervousness among the investors,’ he said.
He, however, observed that the rise in the turnover in the past week showed glimpses of a stable market.
Out of the total 160 issues traded, 101 advanced, 158 declined and 1 remained unchanged.
The average daily turnover in four trading days increased by 18 per cent to Tk 1,204.88 crore from Tk 1,017.56 crore in the previous week.
Trading on the DSE was closed on Thursday on the occasion of the birth anniversary of the Bangladesh’s founding president Sheikh Mujibur Rahman.
The trading on the DSE began on Sunday in the negative zone with the DGEN plunging by 459.65 points, or 6.92 per cent, after a news of uncertainty over the Bangladesh Fund spread.
The stocks bounced back on Monday with the DGEN gaining by 278.45 points, or 4.50 per cent, following an announcement by the Investment Corporation of Bangladesh that there was no uncertainty about the fund and it would be formed in the shortest possible time.
The DGEN shed 139.83 points, or 2.16 per cent, on Tuesday because of profit-booking sell-off by big investors. Witnessing the declining curve of the index, some retail investors also went for panic-driven sell-off on the day.
Rumours among the investors once again marked the trading on Wednesday as the index gained 93.76 points, or 1.48 per cent.
Prices of all the 44 insurance issues gained heavily after a rumour had spread that a newly-elected DSE director,
who is also the managing director of an insurance company, would become the new president of the bourse.
The incumbent DSE president Shakil Rizvi, however, was re-elected at the DSE’s annual general meeting on Wednesday evening.
Read the original story on the daily New Age