Stocks nosedive on BB-BSEC tension
Dhaka stocks took a steep dive
yesterday as investors continue to suffer from a confidence crisis amid growing
tension between Bangladesh Bank and the Bangladesh Securities and Exchange
Commission (BSEC).
The DSEX, the benchmark index of the
Dhaka Stock Exchange (DSE), nosedived 84 points, or 1.23 per cent, to 6,873.
Turnover, an important indicator of
the market, stood at Tk 786 crore, down 2 per cent from Tk 807 crore the day
before.
"Investors are suffering from a
confidence crisis due to the deteriorating situation between two regulators
regarding some issues," said a top official of a merchant bank preferring
anonymity.
A few weeks back, the BSEC ordered
all listed companies, including banks and non-bank financial institutions
(NBFIs), to deposit their undistributed dividends to the stock market
stabilisation fund.
It also allowed banks and NBFIs to
declare dividends from the current year's profits despite having cumulative
losses. However, the central bank ordered them to disregard BSEC's orders.
The dispute arose when, after a
meeting with Bangladesh Bank, the BSEC said the central bank would change its
bank exposure policy by allowing cost-based exposure instead of market value.
However, the central bank refuted
this, saying no such decision was not taken at the meeting.
In such a situation, the fight took
a new turn as the BSEC curtailed banks' power to cancel payments to perpetual
bond holders.
In protest, Bangladesh Bank a sent
letter to lenders in the country, saying the BSEC's condition is at odds with
central bank guidelines on risk-based capital adequacy.
Such a tussle between the two
regulators is badly affecting the market, the merchant banker added.
Eastern Insurance topped the gainers
list yesterday, rising 10 per cent, followed by Asia Insurance, Bangladesh
National Insurance, Khan Brothers PP Woven Bag, and Shurwid Industries.
Stocks of Beximco Ltd traded the
most, worth Tk 73 crore, followed by One Bank, Sonali Paper, Fortune Shoes, and
Active Fine Chemicals.
SS Steel shed the most, dropping
8.84 per cent, followed by Aramit Cement, Fortune Shoes, Beach Hatchery, and
Aziz Pipes.
At the DSE, 87 stocks advanced, 266
fell and 25 remained same.
The prime bourse suffered yet
another setback as investors' mounted sell-offs in all major sectors, including
banks and financial institutions, International Leasing Securities said in its
daily market review.
The DSEX plummeted 85 points as the
current market scenario failed to offer any clear indication of recovery for
investors.
However, several small-caps from
various sectors and the general insurance sector remain in the investors' good
grace, it added.
Among major sectors, based on market
capitalization, financial institutions the dropped most followed by food and
allied, and bank.
Investor activity was mostly
concentrated on the bank, general insurance and miscellaneous sectors.
The Chittagong Stock Exchange (CSE)
also fell yesterday as the CASPI, the main index of the port city bourse,
dropped 336 points, or 1.67 per cent, to 19,738.
Among 285 traded stocks, 63 rose,
204 fell and 18 remained unchanged.
Source: The Daily Star