Margin loan change jolts stock market
Monday, 12 July 2010
FE Report
Dhaka stocks went down sharply Sunday as the Securities and Exchange Commission (SEC) lowered the margin loan ratio for stock brokers and merchant banks.
On Thursday last, the securities regulator revised the margin loan ratio at 1:1 from 1:1.5 for stock brokers and merchant banks.
The benchmark DSE General Index (DGEN) ended Sunday at 6303.54 shedding 128.95 points or 2.0 per cent.
The broader All Shares Price Index (DSI) lost 1.87 per cent or 100.04 points to 5246.21. The DSE 20 index comprising blue chip shares ended at 3741.77, shedding 1.33 per cent or 50.55 points.
At the end of the session 44 advanced, 199 declined and three remained unchanged, out of 246 traded securities while the turnover stood at Tk. 16.04 billion on the day.
IDLC Deputy Managing Director Arif Khan said the market went down just because of the revised order of the SEC on margin loans.
"Most of the merchant banks and brokers lowered their amount of margin loans. We also do not exceed the ratio of 1:0.9 in giving margin loans," he said.
Green Delta Financial Services Managing Director Waqar A. Choudhury said the market went through a correction due to the revised margin loan ratio and some barriers of merchant banks in terms of their investment.
"But the market will choose its own course," he said.
The four sectors, which mostly dipped, are banking, non-banking financial institutions (NBFIs), power and fuel and telecommunication with a contribution of 0.63, 0.37, 0.24 and 0.22 per cent respectively.
Islami Bank, AB Bank and Pubali Bank were down by 4.38 per cent, 3.60 per cent and 3.14 per cent respectively.
NBFI index declined due to major decrease in prices of ICB and LankaBangla which lost 3.27 per cent and 3.25 per cent respectively.
Khulna Power, Summit Power and Titas Gas were mainly responsible for pushing the power and energy sector in red.
The above three companies lost 3.59, 2.87 and 1.11 per cent respectively.
On the other hand, the giant telecommunication Grameenphone alone lost 1.63 per cent.
On Sunday the top gainers were Glaxo Smith, Delta Spinners, Purabi General Insurance, GQ Ball Pen, Northern insurance, Renata limited, Dhaka Insurance and Global Insurance Limited.
The prominent losers of the session included Meghna Life Insurance, AIMS First Mutual Fund, Fine Foods, Pragati Life Insurance, Progressive Life Insurance, BD Welding.
Dhaka stocks went down sharply Sunday as the Securities and Exchange Commission (SEC) lowered the margin loan ratio for stock brokers and merchant banks.
On Thursday last, the securities regulator revised the margin loan ratio at 1:1 from 1:1.5 for stock brokers and merchant banks.
The benchmark DSE General Index (DGEN) ended Sunday at 6303.54 shedding 128.95 points or 2.0 per cent.
The broader All Shares Price Index (DSI) lost 1.87 per cent or 100.04 points to 5246.21. The DSE 20 index comprising blue chip shares ended at 3741.77, shedding 1.33 per cent or 50.55 points.
At the end of the session 44 advanced, 199 declined and three remained unchanged, out of 246 traded securities while the turnover stood at Tk. 16.04 billion on the day.
IDLC Deputy Managing Director Arif Khan said the market went down just because of the revised order of the SEC on margin loans.
"Most of the merchant banks and brokers lowered their amount of margin loans. We also do not exceed the ratio of 1:0.9 in giving margin loans," he said.
Green Delta Financial Services Managing Director Waqar A. Choudhury said the market went through a correction due to the revised margin loan ratio and some barriers of merchant banks in terms of their investment.
"But the market will choose its own course," he said.
The four sectors, which mostly dipped, are banking, non-banking financial institutions (NBFIs), power and fuel and telecommunication with a contribution of 0.63, 0.37, 0.24 and 0.22 per cent respectively.
Islami Bank, AB Bank and Pubali Bank were down by 4.38 per cent, 3.60 per cent and 3.14 per cent respectively.
NBFI index declined due to major decrease in prices of ICB and LankaBangla which lost 3.27 per cent and 3.25 per cent respectively.
Khulna Power, Summit Power and Titas Gas were mainly responsible for pushing the power and energy sector in red.
The above three companies lost 3.59, 2.87 and 1.11 per cent respectively.
On the other hand, the giant telecommunication Grameenphone alone lost 1.63 per cent.
On Sunday the top gainers were Glaxo Smith, Delta Spinners, Purabi General Insurance, GQ Ball Pen, Northern insurance, Renata limited, Dhaka Insurance and Global Insurance Limited.
The prominent losers of the session included Meghna Life Insurance, AIMS First Mutual Fund, Fine Foods, Pragati Life Insurance, Progressive Life Insurance, BD Welding.