SEC ups margin loan ratio to stabilise mkt

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FE Report
Securities regulator SEC has increased the ratio of margin loan to 1:1 from 1:0.5 for stock brokers and merchant banks to restore market stability.
The move has been taken just a day after a massive plunge, which occurred on December 12.
At the same time, the recent fall of the market has triggered panic among investors prompting the Securities and Exchange Commission (SEC) Monday morning to take the decision at an hurriedly called meeting of the market monitoring committee.
The SEC has so far revised the loan ratio four times in last 11 months in keeping with the market behaviour.
The regulator's Executive Director Anwarul Kabir Bhuiyan said the move came in line with the demand of market and investors.
"The regulator has increased the amount of margin loan by taking into account the present situation of the market," Mr. Bhuiyan said. On February 1, 2010, the SEC revised the loan ratio at 1:1.5 from previous ratio 1:2.
On July 8, the SEC revised the margin loan ratio at 1:1 from 1:1.5. On November 21, the SEC again revised loan ratio to 1:0.5 from 1:1.
The SEC Monday also approved the rights offer of Asia Insurance at a ratio of 1:1R, which means the company will offer one rights share against one existing share.
As per the SEC nod, Asia Insurance will offer 16.5 million rights shares with an offer-price of Tk 20, including a premium of Tk 10.