Merchant banks to urge SEC to lift ban on loan disbursement
Thursday, 22 November 2007
Refayet Ullah Mirdha
The Association of Merchant Banks is going to request the Securities and Exchange Commission (SEC) to withdraw the decision of loan disbursement by the merchant banks and brokerage houses to their clients.
The association is likely to write to the regulatory body in the respect today (Thursday)
The Chief Executive Officer (CEO) of a merchant bank claimed that the stock market has not turned volatile for the loans given by the merchant banks and brokerage houses.
"But the amount of foreign investment in the market is higher than the amount of the loan disbursed by the merchant banks and brokerage houses," he said.
He said the merchant bankers have been passing the days in uncertainty as their operations have been suspended.
"We will uphold our logic in the letter to be submitted to the chairman of the SEC," the CEO said.
He said almost all merchant bankers have discussed the matter after the decision of the SEC Tuesday last.
Sources said an urgent meeting was held Tuesday evening among the merchant bankers, brokerage house owners, SEC and DSE officials and senior officials of the finance ministry to evaluate the latest decision of the SEC.
The share prices on the country's premier bourse DSE have been undergoing correction since the decision of the SEC Monday last.
Meanwhile, the SEC Monday last asked the merchant banks and brokerage houses to suspend portfolio loan disbursement with effect from today (Tuesday) until further order.
Market operators said the SEC action came in the backdrop of an over-heated market.
The loan facilities extended by the merchant banks and some of the brokerage houses to the retail investors have played an important role in setting a bullish trend in the market for the past few months.
The benchmark, DSE General Index, has climbed to nearly 3100-mark from 1656.93 in mid-January and the average daily turnover surged to nearly Tk 3.0 billion from that of Tk 260 million.
The Association of Merchant Banks is going to request the Securities and Exchange Commission (SEC) to withdraw the decision of loan disbursement by the merchant banks and brokerage houses to their clients.
The association is likely to write to the regulatory body in the respect today (Thursday)
The Chief Executive Officer (CEO) of a merchant bank claimed that the stock market has not turned volatile for the loans given by the merchant banks and brokerage houses.
"But the amount of foreign investment in the market is higher than the amount of the loan disbursed by the merchant banks and brokerage houses," he said.
He said the merchant bankers have been passing the days in uncertainty as their operations have been suspended.
"We will uphold our logic in the letter to be submitted to the chairman of the SEC," the CEO said.
He said almost all merchant bankers have discussed the matter after the decision of the SEC Tuesday last.
Sources said an urgent meeting was held Tuesday evening among the merchant bankers, brokerage house owners, SEC and DSE officials and senior officials of the finance ministry to evaluate the latest decision of the SEC.
The share prices on the country's premier bourse DSE have been undergoing correction since the decision of the SEC Monday last.
Meanwhile, the SEC Monday last asked the merchant banks and brokerage houses to suspend portfolio loan disbursement with effect from today (Tuesday) until further order.
Market operators said the SEC action came in the backdrop of an over-heated market.
The loan facilities extended by the merchant banks and some of the brokerage houses to the retail investors have played an important role in setting a bullish trend in the market for the past few months.
The benchmark, DSE General Index, has climbed to nearly 3100-mark from 1656.93 in mid-January and the average daily turnover surged to nearly Tk 3.0 billion from that of Tk 260 million.