Jump In Number Of Trades
DSE likely to review howla charge as trading cost rises
The Dhaka Stock Exchange is likely to review its charges on share trading following a jump in the number of trades for share transaction after the introduction of the lot-free trading system on Thursday, DSE officials said. They said the increase in the number of trades resulted in sharp rise in the cost of share transaction and the bourse was thinking to waive howla charge (charge for each transaction) to reduce trading cost burden on investors.
On Wednesday, it required on an average 225 trades for transaction of shares worth Tk 1 crore, while it took 478 trades for transaction of shares worth Tk 1 crore on Thursday with the introduction of the new trading system.
Some 94,904 trades were executed to transact 11,37,55,260 shares worth Tk 421.59 crore On Wednesday, while it took 65,102 trades to transact 3,39,97,970 shares worth Tk 136.89 crore on Thursday.
As per the DSE rules, an investor has to pay Tk 2 to the bourse and Tk 10 as howla charge to stockbroker for each transaction irrespective of the number of shares traded — 100 or 1.
The bourse at the same time collects charge on turnover known as laga charge at 0.02 per cent. Stockbrokers on behalf of the bourse collect the charge from investors on their (investors’) total turnover.
The DSE on Thursday introduced the new trading system, replacing its 16-year old system, allowing investors single-share trading instead of lot-based one.
The composition of lot differs from company to company as 10 shares of some companies make a lot while it takes 500 shares for others.
Sometimes dividends given by companies make fraction of a lot and it was a hassle for investors to sell such shares at the odd-lot market at relatively lower prices under the old system.
The new system has brought a number of benefits for investors.
Single-share trading facility, however, has increased the number of share trades and consequently investors’ share trading cost.
‘It took almost 60 trades to purchase 15,000 shares of certain scrip under
the new trading system, but under the old trading system the number of trades could be highest 30 considering the scrip’s 500-share market lot,’ Md Shakhawat Hossen Chowdhury, a DSE stockbroker, told New Age on Thursday.
In that case, charges on share trading almost doubled, he said.
He said that though the bourse offered the single-share trading facility, it would not be feasible for the investors to purchase or sales of small number of shares considering trading fee (howla charge).
Asked, DSE managing director Swapan Kumar Bala on Thursday told New Age,
‘We are aware of the problem as some of our TREC holders have already raised their concern over the matter.’
‘We will try to find a solution to the problem,’ he said.
A board meeting of the bourse will be held on December 15 that may review the existing charges on share trading, said Swapan.
Another DSE official told New Age that the board, based on an assumption that the number of trades would rise sharply after the launch of the new trading system, in its latest meeting discussed probable solutions to the problem.
Among the probable solutions discussed, waiver of howla charge was one of them, he said.
The official said the waiver might reduce trading cost burden on investors.
In that case, laga charge (charge on turnover) might be increased to adjust DSE’s earning from share transaction, he added.
-With New Age input
