Dhaka stocks drop on rumour of netting facility suspension

FE Report
Dhaka stocks dropped Sunday after three consecutive sessions of gain amid rumour that the netting facility might be suspended.
The market opened positively, but after one hour it began to decline amid widespread rumour that the securities regulator might suspend netting or financial adjustment facility. The Securities and Exchange Commission (SEC), however, ruled out such possibility.
The benchmark DSE General Index (DGEN) was down by 0.71 per cent or 62.22 points to end at 8658.86 from the previous session's all time high of 8721.08.
The broader DSE All Shares Price Index (DSI) ended at 7181.44, shedding 0.76 per cent or 54.98 points. The DSE-20 including blue chips index fell 0.39 per cent or 20.21 points to 5135.41.
"The market went into the red because of the rumour of suspension of netting facility," said a leading stockbroker. When contacted an SEC official said, "No such decision has been taken."
Under the financial adjustment or netting facility, the investors are permitted to purchase stocks with the sale proceeds immediately after completing a deal.
All the major sectors, except banks, mutual funds and general insurances, went down. The banks saw the highest volume of trade, as nine banks were among the top 10 turnover table.
Banking issues, the market's bellwether, experienced slow movement after heavy gain in the last three sessions, as the sector gained slightly by 0.50 per cent.
Mutual funds soared 4.65 per cent to emerge as the top gainers, but AIMS First Mutual Fund was the highest loser with a fall of 41.16 per cent, following its record date for dividend and rights adjustment. General insurance soared 1.21 per cent.
Non-banking financial institutions, fuel and power, and pharmaceuticals slipped 1.56 per cent, 1.96 per cent and 1.84 per cent respectively.
Grameenphone, the most weighted share in the DSE, declined 2.25 per cent, contributing to the fall of the market.
The rumour of suspension of netting facility also took the turnover to Tk 25.80 billion, down by 10.10 per cent over the previous session. The losers trounced the gainers, as out of 231 issues traded, 83 gained, 145 lost, and three remained unchanged.
Southeast Bank topped the turnover leader with shares worth Tk 1.01 billion changing hands. Others turnover leaders were Shahjalal Bank, Prime Bank, Standard Bank, AB Bank, Beximco Limited, NCC Bank, One Bank, UCBL and Uttara Bank Limited.
Paramount Insurance was the largest gainer, posting a rise of 12.82 per cent. It was followed by First Lease Finance and Investment, Mercantile Insurance, Sonar Bangla Insurance, City General Insurance, Asia Insurance, Fu-Wang Food, Standard Bank, Shahjalal Bank and Central Insurance.
After AIMS First Mutual Fund, the other prominent losers included Olympic, Meghna Pet, AMCL (Pran), Imam Button, Daffodil Computer and Monno Jute Stafflers.
Another FE Report adds: The securities regulator said the new margin deposit requirement for bourse members will come into effect in early next month.
The Securities and Exchange Commission (SEC), in a meeting held Thursday, increased the earnest money of members to protect investors from being hoodwinked by brokerage firms.
"The fresh requirement will be effective from December 05," an SEC official said.
The official said members of the stock exchanges will have to deposit 40 per cent instead of the previous 20 per cent if their transaction exceeds the limit of Tk 50 million.
The members will also need to deposit 60 per cent instead of 30 per cent when the transaction is above Tk 10 million but less than Tk 20 million.
The SEC hiked the deposit limit to 80 per cent, from 50 per cent, if the transaction goes more than Tk 20 million, but below Tk 40 million.
The SEC asked members to deposit 100 per cent of the transaction amount if it is more than Tk 40 million.