The Securities and Exchange Commission is likely to bring some changes in the share trading process including a decrease in the transaction cycle and a permit for the netting facilities for all securities in the backdrop of a very low turnover and fall in share prices in recent days.
The suggestions came at an emergency meeting between the stock market regulators, Dhaka Stock Exchange, Chittagong Stock Exchange and the Central Depository of Bangladesh.
The SEC called the emergency meeting as investors on Monday took to the streets near DSE building at Motijheel protesting at the continuous fall in share prices amid severe liquidity crisis.
In the meeting, the DSE also conveyed the outcome of a meeting between the premier bourse and its leading brokers held on Sunday. Some 30 top brokers identified six major reasons for the latest fall in transaction volume including Bangladesh Bank’s change in interest rate for the commercial banks, ‘tight deadline’ to adjust single party exposure limit, and uncertainty about amendment of Bank Companies Act.
‘We informed the SEC the reasons for the low turnover identified by the leading brokerage houses,’ said Shakil Rizvi, president of the DSE.
He said, ‘In Monday’s meeting we discussed over possible extension of the deadline of adjusting the single party exposure limit of the banks and a cut in interest rate on brokers’ income.’
‘We will discuss the issues in a board meeting Wednesday (tomorrow) to finalise a proposal of the bourse to be placed in the SEC.’
Ahsanul Islam, senior vice-president of DSE said, ‘We discussed over possible reduction in the transaction cycle to three days which is currently four days.’
‘In the meeting, we also suggested to allow netting facilities for all securities,’ he said. Currently the netting facilities are allowed only for trading ‘A’ category shares.
About single party exposure limit, Ahsanul said, the bourse suggested that there should not be a fixed deadline for all. ‘Rather, based on the exposure of each bank, timeline should be rescheduled to avoid any adverse impact on the market.’
Meanwhile, Bangladesh Merchant Bankers Association at a meeting on Monday decided to raise more funds to play an active role in the stock market.
‘We will sit with the SEC Tuesday (today) to discuss over the fund raising and possible extension of the deadline of the single party exposure limit,’ said Mohammad A Hafiz, vice-president of the BMBA.
Source: New Age
No comments:
Post a Comment