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Bangladesh’s stock market index yesterday broke out of a fall lasting six days but investor participation fell to a seven-month low for apprehensions over today’s meeting between the central bank and the stock market regulator.
Stock investors hope for Bangladesh Bank and the Bangladesh Securities and Exchange Commission (BSEC) to reach consensus on decisions taken regarding two issues.
One is over the participation of banks and non-bank financial institutions (NBFIs) in a BSEC capital market stabilisation fund, according to a central bank invitation letter on the meeting.
The other is a BSEC order allowing dividends from profits of the recent financial year even if there are accumulated losses.
The BSEC passed a rule on the stabilisation fund in June, saying it would be formed using undistributed and unclaimed dividends of listed companies. It had ordered all listed companies to submit their unclaimed dividends.
The central bank, however, opposed the BSEC decision.
Listed banks and non-bank financial institutions cannot comply with the stock market regulator’s orders on the capital market stabilisation fund as it is inconsistent with the Bank Company Act, the BB officials said in a meeting with the BSEC last September.
In the same meeting, the central bank also opposed another BSEC direction.
The commission had allowed listed companies to declare cash dividends from profits made in the just-concluded financial year even if there were accumulated losses.
This is not consistent with the bank company act, the financial institutions act and international norms, according to the central bank.
Now, the issues would be discussed in a meeting where a deputy governor of the central bank, who is responsible for looking after the off-site supervision department, would chair the session.
A stock broker said the two regulators should give directions taken in consensus after discussions on the issues because investors’ confidence eroded with the news of their opposing stances.
“Now, investors are hopeful,” he said.
So they halted their sales which sent the index up. However, most were cautious, preferring to wait to see what is going to be said after the discussion meeting, he said.
Due to their lower participation, turnover of the Dhaka bourse dropped 15 per cent to Tk 708 crore, down from Tk 837 crore a day earlier.
It has not been this low since April 19 this year, when the turnover was Tk 697 crore.
The DSEX, the benchmark index of Dhaka Stock Exchange (DSE), edged up 21 points, or 0.39 per cent, to 6,795.
At the DSE today, 238 stocks advanced, 89 declined and 45 remained unchanged.
Acme Pesticides continued to top the gainers’ list, rising 9.96 per cent, followed by Sena Kalyan Insurance, Active Fine Chemicals, Familytex Bangladesh and Generation Next.
Desh Garments shed the most, dropping 4.97 per cent, followed by Emerald Oil, Beach Hatchery, Shurwid Industries and Aramit Cement.
Stocks of Beximco were traded the most, worth Tk 83 crore, followed by Genex Infosys, Beximco Pharmaceuticals, Brac Bank and Delta Life Insurance.
Chittagong Stock Exchange (CSE) also rose yesterday. The CASPI, the main index of the CSE, went up 39 points, or 0.19 per cent, to 19,877.
Among 285 stocks to undergo trade, 150 rose, 111 fell and 24 remained the same.
(TDS)
