Most vibrant since '96 bubble burst

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Raihan M Chowdhury
The year 2007 that ends today (Monday) was the most eventful one for the country's stock market since the 1996 'bubble burst'.
The market picked up steam following the changeover of the January 11 last.
The market capitalisation and benchmark DSE General Index saw a record 139 per cent and 91 per cent growth respectively in 2007 against those of the previous year.
There will be no trading today (Monday) due to year-end bank holiday.
"The stock market's brisk operation was the most positive phenomenon during the year, also the first ever since the market crash of 1996," said Yawer Sayeed, managing director of AIMS of Bangladesh.
All the market indicators recorded a rise during the year pushing up the benchmark DSE General Index to close at 3017.21 points from 1609.51 points, daily average turnover to Tk 1.36 billion from Tk 285.43 million and market capitalisation to Tk 742.19 billion from Tk 315.44 billion of December 30,2006.
There were 14 initial public offerings (IPO) worth Tk 4.63 billion in 2007 against 7 worth Tk 1.43 billion of 2006 ( general public portion).
The market, however, witnessed rowdy demonstration by small investors in late-November when prices of many issues dipped following the intervention of the regulatory body-the Securities and Exchange Commission (SEC).
"The SEC was compelled to intervene when some of the issues marked unusual rise," said an SEC source.
The market, however, bounced back when the SEC withdrew its directive on banning the margin loan disbursement by merchant banks and brokerage houses.
The price of Padma Oil jumped to Tk 1402.60 per share as on December 30 from Tk 632 of January 31 this year.
Similarly the share prices of Eastern Lubricant, IFIC, UCBL, BRAC Bank, NBL, Prime Bank, Islami Bank, AB Bank, Renata and Rupali Bank surged abnormally during the year.
Eastern Lubricant surged to Tk 776.80 from Tk 127, IFIC Tk 2321 from Tk 836, UCBL Tk 4203 from Tk 1723.75, BRAC Bank Tk 1612 from Tk 531.50, Rupali Bank Tk 3100 from Tk 1883 during the 11 month period in the year.
The trading of Rupali Bank shares, however remained suspended since November 5 when there was an uncertainty over the transfer of ownership of the bank to the Saudi Prince, the highest bidder.
The price of UCBL, however surged to Tk 6325 per share on November 28 last when investors anticipated that they will be entitled to get three years' accumulated dividends.
Later, the price of the bank share dipped when the UCBL management said the registered shareholders of the banks record book are only entitled to get the arrear dividends.
"The market is suffering from crisis of quality shares and this is the main reason for unusual rise of many issues during the year," said Moin Al Kashem, an expert on stock market operation.
He said the year 2008 will also be a rosy year if, at least, one telecom company floats its shares in the market.
"Investors will also keep their eye on the general elections scheduled for latter part of 2008," Yawer Sayeed said.
Operation of Citigroup Global Markets Bangladesh Private Ltd, country's first foreign merchant bank from September 26, 2007 was another milestone in the history of the year's stock market.
"We hope to represent Bangladesh stock market in the global market with the launching of the operation," Mark Renton, head of Asia Pacific Investment Banking Division of Citibank NA had said during the opening ceremony.
The legal wing of the SEC over recasting the Z-category issues was another development in the year.
A division bench of the High Court (HC) vacated the stay order on November 29,2007 against a directive of the SEC on recasting the board of Z-category companies, the worst performing issues in the stock market to improve their financial health.
Most of the Z-category issue prices continued to rally following the development.
Market operators hoped the stock market will remain stable in the new year, if supply of quality shares from telecommunication, gas, oil and energy sectors are ensured.
Jamuna Oil and Meghna Petroleum will float shares worth Tk 135 million and Tk 120 million respectively.
"Trading of both the companies under Direct Listing Regulations will begin on the stock exchanges very soon," a DSE source said.
Besides, shares worth Tk 1.22 billion of some 10 companies are in the pipeline to be floated in the country's stock market within next few months.
The companies -- Titas Gas, Rupali Life Insurance, Delta Brac Housing, National Housing and Bangladesh Shilpa Rin Sangstha (BSRS) - will float the shares subject to the final approval from the SEC.
Market operators said the IPOs are being floated in an effort to mop up domestic investors' liquidity in the stock market.
Second ICB NRB Mutual Fund, First Security Bank, Lab Aid, GSP Finance, Industrial and Infrastructure Development Fund, Fareast Finance and Oman-Bangladesh Leasing will also go public by the end of June, 2008.
Telecom companies-Grameenphone, Aktel and Banglalink- have already shown their interest to go public.