Dhaka, Nov 24 —Just a day after the Securities and Exchanges Commission (SEC) declared a raft of measures to stabilise the market, the benchmark index of the Dhaka Stock Exchange fluctuated in the first hour of trading.
The general index stood at 5352.96 points around 12.03am on Thursday, a 19.69-point or 0.37 percent loss from the day's opening. Shares worth a total of Tk 2.02 billion changed hands by then with losers outnumbering gainers by 137 to 84 and nine issues at their opening price.
The general index reached the day's high until then, 5483.9 points, in the first five minutes. Only 15 minutes later, it reached the day's low, 5288.74 points, a fall of around 195 points. Smaller vacillations continued afterwards.
On Wednesday, the SEC rolled out stock market incentives package, with provisions for increased commercial bank, merchant bank and foreign investments.
The package includes allowing merchant banks to collect up to 49 percent capital from sources other than their parent banks, making compulsory for sponsor directors of listed companies to have 30 percent stake of their firms, or buy shares to reach the level within six months, brokerage houses to appoint professional, skilled and experienced investment managers, and strengthening laws to stop insider trading, modernising the Small Investor Protection Act and demutualisation of stock exchanges.
The market regulators also said that the central bank will extend the deadline for commercial banks to adjust their single-party exposure relating to share market to Dec 31, 2013 by one year, in a major move to inject more cash into the market. The Bangladesh Bank will also redefine "exposure" when the commercial banks will invest through subsidiaries such as merchant banking.
To entice funds from abroad, the National Board of Revenue will withdraw the 10 percent capital gains tax on investment in capital market by foreign institutions or non-resident Bangladeshis
On Wednesday, even though the general index shed 224.3 points at close, the turnover crossed Tk 10-billion mark for the first time in nearly four months. The DSE general index shot up 194 points in the first five minutes of trading on the news that an 'incentive package' would be announced in the afternoon.
It started losing afterwards and closed with a fall after five days of uptrend followed by a prime minister Sheikh Hasina-led meeting with stakeholders on Nov 16. She said all that needs be done for the stock market will be done.
The NBR on Monday sent a clarification to the SEC confirming that investors will face no question while investing undisclosed income in the capital market.
On Tuesday, the bourse registered an exchange of shares worth Tk 8.03 billion. On Monday, the turnover stood at Tk 5.19 billion, exceeding that of Sunday by nearly Tk 440 million.
On Monday, the DSE decided in a meeting that the sponsor directors of all listed companies have to hold at least 30 percent stakes, and those below the level must buy back their shares within six months. It also decided to dissolve all but audit and demutualisation committees.
The NBR sent a clarification to the SEC that confirmed the decision taken at the Nov 16 meeting with the prime minister about not questioning source of funds invested in the market and that untaxed money can be freely invested.
The decisions came after the indices plunged to new lows over the past week leading to streets protests and then intervention from the prime minister. On Wednesday night, Sheikh Hasina chaired a high-profile meeting that resulted in decisions to prop up the prices.
On Monday, turnover at the Dhaka Stock Exchange crossed the Tk 5 billion-mark with the general index gaining slightly on a selling spree, apparently buoyed by the news of the incoming capital market stimulus package. At closing, the turnover stood at Tk 5.19 billion exceeding last day's high by Tk 440 million and hitting the highest since trading resumed after the nine-day recess for Eid-ul-Azha.
bdnews24.com
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