Govt sits with merchant bankers today
The government sits today with merchant bankers to find ways to bring stability to the troubled stockmarket. The officials of the market regulator will also be present during the talks.
The last week went through chaos, as the general index of the prime bourse plunged 9.21 percent amid credit crisis. However, the government initiative on Tuesday, the closing trade session, to buy stocks through state entities such as Investment Corporation of Bangladesh (ICB) halted the fall.
There was no trade on the Dhaka Stock Exchange on Wednesday and Thursday.
The DSE general index went down 600 points to 5,926 points on the last trading day.
When the government steps to offload shares of some state enterprises came under fire from analysts and investors went berserk on streets on Monday, the latest move was put on hold.
The credit crunch and inactiveness by institutional investors, analysts say, have helped fade out investor confidence.
Experts were in favour of raising credit supply to stop the market debacle rather than SoE shares offloading.
Besides ICB, the four other state-run organisations that came forward to buy shares were Sonali, Janata, Agrani and Rupali banks.
ICB received a Tk 200 crore financial assistance from the central bank for the purpose.
The DSE general index gained 346 points on the day the government stepped into the stockmarket to buy shares.
In this context, Professor Mahmud Osman Imam, who teaches finance at Dhaka University, said: “The government should increase funds for the SoEs to buy shares to boost investor confidence in the current market situation.”
Osman also pointed to the price manipulation in the case of low-profile companies even after the debacle.
Akter H Sannamat, a market analyst, said a positive feeling is needed that the government is very serious to make the stockmarket stable.
He also said the Securities and Exchange Commission should approve more mutual funds to increase liquidity flow in the market.
The DSE’s daily average turnover stood at Tk 689 crore, up from Tk 667 crore in the previous week.
Of the total 253 issues traded in the week, 253 declined and eight advanced.
National Bank topped the turnover leaders of the week with Tk 93.62 crore.
The other leaders were Beximco, United Commercial Bank, Peoples Leasing and Financial Services, Titas Gas, Grameenphone, Southeast Bank, Bay Leasing and Investment, Prime Bank and AB Bank.
International Leasing and Financial Services was the biggest gainer of the week, posting a 15.87 percent rise in its share price, while Dutch-Bangla Bank was the worst loser.