Investors defy regulator's moves to rein in market
Saturday, 2 October 2010
FE Report
The Dhaka Stock Exchange (DSE) continued to witness a buoyant mood for the second consecutive week that ended Thursday, defying the regulator's various moves to rein in the spiraling of stock prices.
Volatility, however, dominated the week, as investors awaited Supreme Court's rule on appeal filed by the Securities and Exchange Commission (SEC) challenging the High Court's stay order on its recent directive about credit facility.
The benchmark index DSE General Index (DGEN) crossed 7000-mark for the first time in the week, ending at 7097.38, which was a new high, with a gain of 2.80 per cent or 193.30 points.
The broader All Shares Price Index (DSI) was up by 2.49 per cent or 143.88 points to 5930.90. The DSE-20 comprising blue chip rose 1.00 per cent or 41.08 points to finish at 4137.93.
Turnover was up by 20.2 per cent to Tk 22.0 billion over the previous week. Out of 276 issues traded, 152 closed positive, 112 negative, one remained unchanged and 11 were not traded.
Among the week's positive performers, general insurances emerged as the leading gainers posting a rise of 10.82 per cent. Life insurances rose 5.48 per cent, fuel and power 3.01 per cent and cement 6.39 per cent.
Banks -- one fourth of the market's capitalisation and the market's bellweather -- closed 2.10 per cent higher, reversing the previous week's declining trend.
Non-banking financial institutions (NBFIs) rose 3.27 per cent, extending gains for two straight weeks.
Mutual funds, telecommunications and pharmaceuticals were the notable losing sectors, down by 6.36 per cent, 2.88 per cent and 0.57 per cent respectively.
"The market witnessed volatility largely due to regulatory uncertainty," said Reaz Islam, managing director of the LR Global Bangladesh.
Earlier, the SEC directed the merchant banks and brokerages to adjust their clients' portfolios by September 30, 2010 in line with its latest NAV-calculated margin loan.
Upon a writ petition from some investors, the High Court Monday issued a three-month stay order on the SEC's directive.
On Wednesday, the SEC appealed with the Supreme Court challenging the stay order. The hearing on SEC's appeal is likely to take place tomorrow (Sunday).
Under the new margin loan criteria, the merchant bankers and stockbrokers are allowed to provide margin loans considering NAV for the purpose of continuing the margin calculations of their customers at 1:1 ratio.
Peoples Leasing and Financial Services, Prime Finance, BSRM Steels, Lankabangla Finance Company, BEXIMCO, Titas Gas, DESCO, RN Spinning Mills and Meghna Cement were the week's leading turnover leaders.
The week's top gainers included Imam Button, Meghna Cement, Monno Ceramic, Ambee Pharma, Green Delta Insurance, R N Spinning Mills, Confidence Cement, BGIC, Monno Stafllers and Apex Spinning.
The prominent losers were Samata Leather, Quasem Silk, Shaympur Sugar, Renwick Jajneswar, Desh Garments, Zeal Bangla Sugar, 1st BSRS and HR Textile.
The Dhaka Stock Exchange (DSE) continued to witness a buoyant mood for the second consecutive week that ended Thursday, defying the regulator's various moves to rein in the spiraling of stock prices.
Volatility, however, dominated the week, as investors awaited Supreme Court's rule on appeal filed by the Securities and Exchange Commission (SEC) challenging the High Court's stay order on its recent directive about credit facility.
The benchmark index DSE General Index (DGEN) crossed 7000-mark for the first time in the week, ending at 7097.38, which was a new high, with a gain of 2.80 per cent or 193.30 points.
The broader All Shares Price Index (DSI) was up by 2.49 per cent or 143.88 points to 5930.90. The DSE-20 comprising blue chip rose 1.00 per cent or 41.08 points to finish at 4137.93.
Turnover was up by 20.2 per cent to Tk 22.0 billion over the previous week. Out of 276 issues traded, 152 closed positive, 112 negative, one remained unchanged and 11 were not traded.
Among the week's positive performers, general insurances emerged as the leading gainers posting a rise of 10.82 per cent. Life insurances rose 5.48 per cent, fuel and power 3.01 per cent and cement 6.39 per cent.
Banks -- one fourth of the market's capitalisation and the market's bellweather -- closed 2.10 per cent higher, reversing the previous week's declining trend.
Non-banking financial institutions (NBFIs) rose 3.27 per cent, extending gains for two straight weeks.
Mutual funds, telecommunications and pharmaceuticals were the notable losing sectors, down by 6.36 per cent, 2.88 per cent and 0.57 per cent respectively.
"The market witnessed volatility largely due to regulatory uncertainty," said Reaz Islam, managing director of the LR Global Bangladesh.
Earlier, the SEC directed the merchant banks and brokerages to adjust their clients' portfolios by September 30, 2010 in line with its latest NAV-calculated margin loan.
Upon a writ petition from some investors, the High Court Monday issued a three-month stay order on the SEC's directive.
On Wednesday, the SEC appealed with the Supreme Court challenging the stay order. The hearing on SEC's appeal is likely to take place tomorrow (Sunday).
Under the new margin loan criteria, the merchant bankers and stockbrokers are allowed to provide margin loans considering NAV for the purpose of continuing the margin calculations of their customers at 1:1 ratio.
Peoples Leasing and Financial Services, Prime Finance, BSRM Steels, Lankabangla Finance Company, BEXIMCO, Titas Gas, DESCO, RN Spinning Mills and Meghna Cement were the week's leading turnover leaders.
The week's top gainers included Imam Button, Meghna Cement, Monno Ceramic, Ambee Pharma, Green Delta Insurance, R N Spinning Mills, Confidence Cement, BGIC, Monno Stafllers and Apex Spinning.
The prominent losers were Samata Leather, Quasem Silk, Shaympur Sugar, Renwick Jajneswar, Desh Garments, Zeal Bangla Sugar, 1st BSRS and HR Textile.