More securities brought in under credit facility

The securities regulator has expanded the listed securities against which margin loans will be allowed in an effort to enhance liquidity flow in the market.
In a directive issued on Wednesday, the Bangladesh Securities and Exchange Commission (BSEC) said margin loans would be available for investments in securities having paid-up capital not less than Tk 300 million.
An earlier directive by the BSEC allowed credit facility for investing in equity-backed securities with paid-up capital not less than Tk 500 million.
Mohammad Rezaul Karim, a BSEC executive director, said there are many good companies which meet the requirement.
Asked, why the regulator is emphasising on margin loans discouraged by experts, he said, "Those who have capacity should be provided with the facility."
As per the previous directive, credit facility was not allowed against the securities with P/E (price-earnings) ratio above 40.
Now, equity-backed securities with P/E ratio not more than 50 will be treated as marginable if instruments have been in the category A for the last 3 years. And their paid-up capital should not be less than Tk 300 million.

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