Welcome to Business Outlook
Related Articles
The Dhaka Stock Exchange has initiated a move to restructure the daily limit on buying shares by the brokerage houses without providing bank guarantee or keeping security money.
Currently, the limit is Tk 10 crore and a stockbroker must provide bank guarantee or keep security money to buy shares worth over Tk 10 crore.
The bourse has sent a proposal to the Bangladesh Securities and Exchange Commission regarding the issue, DSE officials said.
They said that leading brokerage houses had recently requested the DSE to increase the limit to Tk 20 crore as their daily share buying often crossed Tk 10 crore.
The DSE, however, is unwilling to increase the margin for all brokerage houses as many houses do not trade more than Tk 5 crore daily, the officials said.
The brokerage houses said that the market had remained stagnant for a long period and it became difficult for them to keep additional money as security deposit with the DSE.
Besides, the additional cost became distressing for the houses, the brokerage houses said.
So, the limit should be raised by at least 100 per cent, the firms suggested.
The DSE has decided to restructure the limit as per the stockbrokers’ performance and net asset.
‘The limit would be two times of daily average turnover or 50 per cent of the TREC holder company’s net worth, whichever is lower,’ a senior DSE official said.
UCB Capital Management chief executive officer Mohammad Rahamat Pasha said that the bourse should increase the limit as trading volume had been rising day by day.
Bonds worth Tk 50,000 to Tk 1 lakh per unit would also be traded in the coming days, he said.
The DSE does not need to raise the limit for all brokerage houses, rather it can raise the limit considering net worth and daily performance of the brokerage houses, Rahamat said.
DSE officials said that the bourse for the purpose had grouped the brokerage houses in five categories — A, B, C, D, and E — in accordance with their performance.
The ‘A’ category brokerage houses, whose average daily turnover is more than Tk 10 crore, would get Tk 30-crore limit, the ‘B’ category brokerage houses with average daily turnover Tk 5-10 crore would get Tk 20-crore limit while the ‘C’ category brokerage houses with average daily turnover Tk 2-5 crore, would get Tk 15-crore limit.
The ‘D’ category brokerage houses with Tk 1-2 crore average daily turnover would get Tk 5-crore limit and the ‘E’ category brokerage houses with less than Tk 1 crore average daily turnover would get Tk 1-crore limit.
