Monitoring more urgent than frequent intervention BMBA team tells new DSE
Friday, 2 April 2010
FE Report
Gearing up monitoring activities in the market rather than frequent interventions by the securities regulator is a better tool for getting fruitful results, sources at a meeting said.
The observation came when Bangladesh Merchant Banks Association (BMBA) made a courtesy call on the newly elected executive body of the Dhaka Stock Exchange (DSE) on Wednesday.
They said frequent intervention by the Securities and Exchange Commission (SEC) has often made the market jittery, boding ill for the market's development.
It is better to make monitoring system stronger instead of intervention to get the fruitful results, they opined. They also underscored the need for increasing supply to make the market stable and buoyant.
DSE president Shakil Rizvi, senior vice president Nasir Uddin Chowdhury, vice president Rofiqul Islam and immediate-past DSE president Rakibur Rahman, and president of BMBA Fazlur Rahman were present, among others, at the meeting.
The meeting also urged the SEC to remove confusion over loan margin ratio provided by merchant banks and stockbrokers as they failed to provide credits to their clients.
Last week, the SEC directed stock brokers to calculate the market price of portfolio or securities to determine the margin requirement for their clients using the formula -- closing price of the securities plus net asset value divided by two.
Gearing up monitoring activities in the market rather than frequent interventions by the securities regulator is a better tool for getting fruitful results, sources at a meeting said.
The observation came when Bangladesh Merchant Banks Association (BMBA) made a courtesy call on the newly elected executive body of the Dhaka Stock Exchange (DSE) on Wednesday.
They said frequent intervention by the Securities and Exchange Commission (SEC) has often made the market jittery, boding ill for the market's development.
It is better to make monitoring system stronger instead of intervention to get the fruitful results, they opined. They also underscored the need for increasing supply to make the market stable and buoyant.
DSE president Shakil Rizvi, senior vice president Nasir Uddin Chowdhury, vice president Rofiqul Islam and immediate-past DSE president Rakibur Rahman, and president of BMBA Fazlur Rahman were present, among others, at the meeting.
The meeting also urged the SEC to remove confusion over loan margin ratio provided by merchant banks and stockbrokers as they failed to provide credits to their clients.
Last week, the SEC directed stock brokers to calculate the market price of portfolio or securities to determine the margin requirement for their clients using the formula -- closing price of the securities plus net asset value divided by two.