DSE to send proposals to BB on banks' stock market exposure
Wednesday, 23 June 2010
FE Report
Dhaka Stock Exchange (DSE) will send a set of proposals to the central bank regarding the commercial banks' exposure to the stock market.
The decision was taken in a meeting at the DSE Tuesday. The meeting was called against the backdrop of Bangladesh Bank's (BB) order limiting the banks' exposure to the market.
The BB in a circular last week asked the banks not to invest more than 10 per cent of their total liabilities in the capital market. Some commercial banks are investing heavily in the country's capital market, resulting in massive surge in share prices, as no limit is applicable.
The banks' exposure limit to the stock market was supposed to be calculated on current market prices in line with the BB's order. However, the brokers will propose to calculate the exposure limit on the basis of sale prices.
The bourse will make the proposals after taking opinions from different stakeholders, including merchant banks, leasing companies and stockbrokers.
DSE senior vice-president Nasir Uddin Chowdhury said, "We will sit with the stakeholders to prepare the proposals for sending to the central bank."
Dhaka Stock Exchange (DSE) will send a set of proposals to the central bank regarding the commercial banks' exposure to the stock market.
The decision was taken in a meeting at the DSE Tuesday. The meeting was called against the backdrop of Bangladesh Bank's (BB) order limiting the banks' exposure to the market.
The BB in a circular last week asked the banks not to invest more than 10 per cent of their total liabilities in the capital market. Some commercial banks are investing heavily in the country's capital market, resulting in massive surge in share prices, as no limit is applicable.
The banks' exposure limit to the stock market was supposed to be calculated on current market prices in line with the BB's order. However, the brokers will propose to calculate the exposure limit on the basis of sale prices.
The bourse will make the proposals after taking opinions from different stakeholders, including merchant banks, leasing companies and stockbrokers.
DSE senior vice-president Nasir Uddin Chowdhury said, "We will sit with the stakeholders to prepare the proposals for sending to the central bank."