Stock prices nose-dive despite partial lifting of ban on lending
Monday, 3 December 2007
FE Report
Stock prices nose-dived Sunday on the Dhaka Stock Exchange (DSE) despite partial withdrawal of ban on lending by merchant banks to retail investors early last week.
The prime bourse witnessed a record fall of its general index by over 92 points in a single day this year due mainly to selling pressure from the retail investors following the recent move by the capital market regulatory body to cool down the market, according to brokers.
The Securities and Exchange Commission (SEC), however, said that there is nothing to be worried over, as the market would be stable quickly.
On November 20, the commission suspended the loan support by the merchant banks and brokerage hoses completely. Later on November 26, the SEC relaxed loan disbursement facility for only the merchant banks allowing them to provide loans to retail investors in the ratio of 1:05 instead of the previous 1:1 basis. But the regulatory body kept the loan facilities of brokerage houses suspended for their clients.
Stock prices made a record gain following the partial restoration of loan facility on November 25 last. But a strong warning by the SEC against 'illogical' behaviour of the market on the same day put a damper on investors' enthusiasm.
All the market barometers dropped sharply on the day. DSE General Index (DGEN), All Shares Price Index (DSI) and DSE-20 Index (DS20) shed 92.37 points, 77.40 points and 68.95 points to close at 2878.74, 2433.92 and 2263.52.
At one point the general index plunged by 120 points to 2848. However, it recovered towards closing of the day's trading.
Total turnover of trade also came down to Tk 1.35 billion from the previous day's Tk 1.40 billion. Also total market capitalisation declined to Tk 717.27 billion from Tk 736.17 billion.
Out of 208 traded issues, prices of only 16 advanced, 181 declined and 11 remained unchanged.
When contacted, a high SEC official admitted that the investors were a bit of nervous about the market behaviour. "There is nothing to be worried and the market will be stable within a very short time," he said adding that the investors need to keep in mind excessive heat in the market.
Investors drew little discomfort from a sharp drop in the indices for the fourth consecutive day following the SEC's move, said a broker.
The downward trend in capital market was viewed by analysts as a correction.
Share prices of the United Commercial Bank (UCB) continued to decline by 8.35 per cent to Tk 4716.75 from opening price at Tk 5147.
The Aims First Mutual Fund was the top turnover leader with its shares worth Tk 21.73 million changing hands, followed by Bextext with 12.41 million, Grameen One with Tk40.68 million, Bxpharma with Tk22.91 million, Lanka Bangla Finance with Tk 31.37 million.
The share price of the Grameen One was affected by the report that Grameen Bank, one of the corporate Sponsors of the Fund, would be divesting 10,00,000 shares out of its total holdings of 16,50,000 shares of the Fund at the prevailing market price through Stock Exchange within next 30 working days.
Gulfoods was the top loser with its share prices dipping by 18.71 per cent followed by Zeal Bangla declining 12.21 per cent, Azizpipes by 11.66 per cent, Eastern Lubricant, 9.40 per cent, IBBLP Bond by 8.98 per cent, ICBAMCLIST, 8.69 per cent, PRAGATIIST, 8.52 per cent, Monno Ceramic, 7.44 per cent, Beximco, 6.74 per cent and UCBL with 6.68 per cent.
Stock prices nose-dived Sunday on the Dhaka Stock Exchange (DSE) despite partial withdrawal of ban on lending by merchant banks to retail investors early last week.
The prime bourse witnessed a record fall of its general index by over 92 points in a single day this year due mainly to selling pressure from the retail investors following the recent move by the capital market regulatory body to cool down the market, according to brokers.
The Securities and Exchange Commission (SEC), however, said that there is nothing to be worried over, as the market would be stable quickly.
On November 20, the commission suspended the loan support by the merchant banks and brokerage hoses completely. Later on November 26, the SEC relaxed loan disbursement facility for only the merchant banks allowing them to provide loans to retail investors in the ratio of 1:05 instead of the previous 1:1 basis. But the regulatory body kept the loan facilities of brokerage houses suspended for their clients.
Stock prices made a record gain following the partial restoration of loan facility on November 25 last. But a strong warning by the SEC against 'illogical' behaviour of the market on the same day put a damper on investors' enthusiasm.
All the market barometers dropped sharply on the day. DSE General Index (DGEN), All Shares Price Index (DSI) and DSE-20 Index (DS20) shed 92.37 points, 77.40 points and 68.95 points to close at 2878.74, 2433.92 and 2263.52.
At one point the general index plunged by 120 points to 2848. However, it recovered towards closing of the day's trading.
Total turnover of trade also came down to Tk 1.35 billion from the previous day's Tk 1.40 billion. Also total market capitalisation declined to Tk 717.27 billion from Tk 736.17 billion.
Out of 208 traded issues, prices of only 16 advanced, 181 declined and 11 remained unchanged.
When contacted, a high SEC official admitted that the investors were a bit of nervous about the market behaviour. "There is nothing to be worried and the market will be stable within a very short time," he said adding that the investors need to keep in mind excessive heat in the market.
Investors drew little discomfort from a sharp drop in the indices for the fourth consecutive day following the SEC's move, said a broker.
The downward trend in capital market was viewed by analysts as a correction.
Share prices of the United Commercial Bank (UCB) continued to decline by 8.35 per cent to Tk 4716.75 from opening price at Tk 5147.
The Aims First Mutual Fund was the top turnover leader with its shares worth Tk 21.73 million changing hands, followed by Bextext with 12.41 million, Grameen One with Tk40.68 million, Bxpharma with Tk22.91 million, Lanka Bangla Finance with Tk 31.37 million.
The share price of the Grameen One was affected by the report that Grameen Bank, one of the corporate Sponsors of the Fund, would be divesting 10,00,000 shares out of its total holdings of 16,50,000 shares of the Fund at the prevailing market price through Stock Exchange within next 30 working days.
Gulfoods was the top loser with its share prices dipping by 18.71 per cent followed by Zeal Bangla declining 12.21 per cent, Azizpipes by 11.66 per cent, Eastern Lubricant, 9.40 per cent, IBBLP Bond by 8.98 per cent, ICBAMCLIST, 8.69 per cent, PRAGATIIST, 8.52 per cent, Monno Ceramic, 7.44 per cent, Beximco, 6.74 per cent and UCBL with 6.68 per cent.