DSE asks brokerage firms to exercise restraint in lending
Wednesday, 27 January 2010
FE Report
The Dhaka Stock Exchange (DSE) Tuesday urged brokerage houses to stop financing stock trading aggressively as it affects normalcy of the market.
Such a call came against the backdrop of current upswing of some overvalued scrips.
"Please, stop aggressive lending," said Rakibur Rahman, president of the DSE, after a meeting with representatives of the brokerage houses.
"Brokerage houses normally tend to offer loan margin higher than their counterparts to net client. But such practice might disturb the normal course of the market," he said.
He also said, "There is no need for intervention by the securities regulator to cool down the overheated market if we can restrain ourselves when it is necessary."
"Don't invest with borrowed money as it is very risky. This is not the place of emotion and please try to control greed," he said.
He also urged the stakeholders to gear up awareness programme to educate the inefficient investors.
On large daily turnover he said, "This is the sign of investors' confidence on the market. I am not concerned about such hefty turnover rather delighted."
In another development, Securities and Exchange Commission (SEC) sat with the Dhaka Stock Exchange and Chittagong Stock Exchange on Tuesday to discuss the current market situation.
"No decision was taken at the meeting. But all have been asked to remain watchful of the current market situation," said Anwarul Kabir Bhuiyan, executive director of the SEC.
The Dhaka Stock Exchange (DSE) Tuesday urged brokerage houses to stop financing stock trading aggressively as it affects normalcy of the market.
Such a call came against the backdrop of current upswing of some overvalued scrips.
"Please, stop aggressive lending," said Rakibur Rahman, president of the DSE, after a meeting with representatives of the brokerage houses.
"Brokerage houses normally tend to offer loan margin higher than their counterparts to net client. But such practice might disturb the normal course of the market," he said.
He also said, "There is no need for intervention by the securities regulator to cool down the overheated market if we can restrain ourselves when it is necessary."
"Don't invest with borrowed money as it is very risky. This is not the place of emotion and please try to control greed," he said.
He also urged the stakeholders to gear up awareness programme to educate the inefficient investors.
On large daily turnover he said, "This is the sign of investors' confidence on the market. I am not concerned about such hefty turnover rather delighted."
In another development, Securities and Exchange Commission (SEC) sat with the Dhaka Stock Exchange and Chittagong Stock Exchange on Tuesday to discuss the current market situation.
"No decision was taken at the meeting. But all have been asked to remain watchful of the current market situation," said Anwarul Kabir Bhuiyan, executive director of the SEC.