Unusual price surge leads DSE to halt Rupali share trading
Wednesday, 17 October 2007
FE Report
The Dhaka Stock Exchange (DSE) Tuesday halted the trading of Rupali Bank, a 'Z' category share on the bourse after the stock propelled an unusual surge of the share price on the news that the Saudi bidder was going to take over the bank's ownership.
The trading on the DSE resumed Tuesday after six-days of Eid-ul Fitr holiday.
Market operators said that over-enthusiasm of a section of retail investors to buy the bank share following a media report pushed its price to Tk 3124.50, a whopping 57.26 per cent rise over the previous day.
The trading of the share on the DSE will resume after the completion of the investigation on the abnormal price hike of the shares, a DSE source said.
Following the abnormal surge of the shares of the Rupali Bank the DSE All Shares Price Index (DSI) crossed 115.499 points to close at 2447.842, marking 4.952 per cent higher, the all time record high of the DSE.
"We were very careful when the prices of the Rupali Bank shares started going higher and higher on the basis of news report that was published in a well circulated Bengali daily. We advised the investors to be very cautious while buying Rupali Bank shares as the cherished final deal in this regard is yet to be completed," said a chief executive officer (CEO) of a brokerage house.
Talking to the FE, chief executive officer (CEO) of the DSE Salahuddin Ahmed Khan said the DSE halted the trading of the Rupali Bank share at 1.00pm when its share price registered such unusual hike.
A section of the media published news on the handing over of the ownership of the Rupali Bank to the Saudi prince on October 10 last.
"DSE has inquired both Privatisation Commission (PC) and Rupali Bank authorities when the prices of the shares of the bank started rising abnormally. But both the authorities could not confirm the news of Rupali Bank hand-over. And ultimately, the DSE halted the trading of the share one hour before the closing of the trading session for further investigation," Salauddin Ahmed Khan said.
Market operators said most of the transactions of the issues were traded among the retail investors, not the institutional investors.
When asked PC chairman Abu Solaiman Chowdhury said although the representative of the Saudi prince gave assurance on signing of the final deal on handing over of the Rupali Bank to the Saudi prince by November next, he did not give the assurance in writing.
He said if the Saudi prince does not take the ownership of the bank by November next, the PC will look for alternative arrangement.
He said the PC will not wait further for the Saudi prince after the expiry of the November deadline.
However, the prices of the shares of other banks and insurance companies also increased substantially on the day because of a government decision on enhancement of paid-up capital for both bank and insurance companies.
However, DSE General Index (DGEN) and DSE-20 Index (DS20) gained 68.502 points and 39.463 points to close at 2871.108 and 2195.903 respectively.
The total turnover rose to Tk 2.580 billion from its previous Tk 2.257 billion October 9, the last trading session before the announcement of the Eid vacation. The total market capitalisation also increased to Tk 692.534 billion from its previous Tk 665.208 billion.
Out of 202 traded issues prices of 130 increased, 64 declined and eight remained unchanged.
The Dhaka Stock Exchange (DSE) Tuesday halted the trading of Rupali Bank, a 'Z' category share on the bourse after the stock propelled an unusual surge of the share price on the news that the Saudi bidder was going to take over the bank's ownership.
The trading on the DSE resumed Tuesday after six-days of Eid-ul Fitr holiday.
Market operators said that over-enthusiasm of a section of retail investors to buy the bank share following a media report pushed its price to Tk 3124.50, a whopping 57.26 per cent rise over the previous day.
The trading of the share on the DSE will resume after the completion of the investigation on the abnormal price hike of the shares, a DSE source said.
Following the abnormal surge of the shares of the Rupali Bank the DSE All Shares Price Index (DSI) crossed 115.499 points to close at 2447.842, marking 4.952 per cent higher, the all time record high of the DSE.
"We were very careful when the prices of the Rupali Bank shares started going higher and higher on the basis of news report that was published in a well circulated Bengali daily. We advised the investors to be very cautious while buying Rupali Bank shares as the cherished final deal in this regard is yet to be completed," said a chief executive officer (CEO) of a brokerage house.
Talking to the FE, chief executive officer (CEO) of the DSE Salahuddin Ahmed Khan said the DSE halted the trading of the Rupali Bank share at 1.00pm when its share price registered such unusual hike.
A section of the media published news on the handing over of the ownership of the Rupali Bank to the Saudi prince on October 10 last.
"DSE has inquired both Privatisation Commission (PC) and Rupali Bank authorities when the prices of the shares of the bank started rising abnormally. But both the authorities could not confirm the news of Rupali Bank hand-over. And ultimately, the DSE halted the trading of the share one hour before the closing of the trading session for further investigation," Salauddin Ahmed Khan said.
Market operators said most of the transactions of the issues were traded among the retail investors, not the institutional investors.
When asked PC chairman Abu Solaiman Chowdhury said although the representative of the Saudi prince gave assurance on signing of the final deal on handing over of the Rupali Bank to the Saudi prince by November next, he did not give the assurance in writing.
He said if the Saudi prince does not take the ownership of the bank by November next, the PC will look for alternative arrangement.
He said the PC will not wait further for the Saudi prince after the expiry of the November deadline.
However, the prices of the shares of other banks and insurance companies also increased substantially on the day because of a government decision on enhancement of paid-up capital for both bank and insurance companies.
However, DSE General Index (DGEN) and DSE-20 Index (DS20) gained 68.502 points and 39.463 points to close at 2871.108 and 2195.903 respectively.
The total turnover rose to Tk 2.580 billion from its previous Tk 2.257 billion October 9, the last trading session before the announcement of the Eid vacation. The total market capitalisation also increased to Tk 692.534 billion from its previous Tk 665.208 billion.
Out of 202 traded issues prices of 130 increased, 64 declined and eight remained unchanged.