SEC move to restrict credit facilities halts bull-run
Thursday, 17 June 2010
FE Report
Dhaka stocks witnessed sharp fall Wednesday, triggered by securities regulator latest move on restricting credit facilities, with turnover hitting a new high on huge selling pressure.
The benchmark DSE General Index (DGEN) closed at 6249.91, down 1.29 per cent or 82.29 points, halting the bull-run over the four weeks.
The broader All Shares Price Index (DSI) lost 1.18 per cent or 62.18 points to 5164.77. The DSE 20 index comprising the blue chip shares was up by 1.05 per cent or 38 points to 3644.59.
"The market's rally paused on regulator's move that gave investors an excuse to book profits after shares hit a fresh high," said Ahsan Ullah, head of merchant banking wing of Trust Bank.
He said, fresh buying on banking issues by both instructional and retail investors supported the index to minimise the losses.
The Securities and Exchange Commission (SEC), in a directive issued Tuesday, ordered merchant bankers and stock brokers not to provide any credit facilities to their clients to purchase the equity securities with price-earning (P/E) ratio of above 40 until further order. The directive will be effective from Sunday.
Banking sector, which makes up one-fourth of DSE's market capitalisation, was the only sector to close in positive territory, as its P/E ratio was considered lower than the other sectors.
Companies having lower P/E ratio declined.
Islami Bank and United Commercial Bank gained by more than 10 per cent each while another seven banks gained more than three per cent and nine banks were the day's top gainers.
Across the board selling was seen as out of 251 issues traded, only 36 closed positive, 209 negative and six remained unchanged.
Dhaka stocks witnessed sharp fall Wednesday, triggered by securities regulator latest move on restricting credit facilities, with turnover hitting a new high on huge selling pressure.
The benchmark DSE General Index (DGEN) closed at 6249.91, down 1.29 per cent or 82.29 points, halting the bull-run over the four weeks.
The broader All Shares Price Index (DSI) lost 1.18 per cent or 62.18 points to 5164.77. The DSE 20 index comprising the blue chip shares was up by 1.05 per cent or 38 points to 3644.59.
"The market's rally paused on regulator's move that gave investors an excuse to book profits after shares hit a fresh high," said Ahsan Ullah, head of merchant banking wing of Trust Bank.
He said, fresh buying on banking issues by both instructional and retail investors supported the index to minimise the losses.
The Securities and Exchange Commission (SEC), in a directive issued Tuesday, ordered merchant bankers and stock brokers not to provide any credit facilities to their clients to purchase the equity securities with price-earning (P/E) ratio of above 40 until further order. The directive will be effective from Sunday.
Banking sector, which makes up one-fourth of DSE's market capitalisation, was the only sector to close in positive territory, as its P/E ratio was considered lower than the other sectors.
Companies having lower P/E ratio declined.
Islami Bank and United Commercial Bank gained by more than 10 per cent each while another seven banks gained more than three per cent and nine banks were the day's top gainers.
Across the board selling was seen as out of 251 issues traded, only 36 closed positive, 209 negative and six remained unchanged.