Although there is an enormous liquidity in the capital market, investors, including the institutional and foreign ones, are centring on a limited shares due to absence of adequate shares with good fundamentals, according to the market operators.

They said the huge demand also pushes share prices and transactions up in terms of value and number that might result in a volatile situation in the market.

"The government can offload its stake in the state-run companies in the stock market, while the listed private companies aiming at expansion can also raise money from the stock market through issuing rights shares," said DSE Chief Executive Officer (CEO) Salahuddin Ahmed Khan talking to The Daily Star yesterday.

He said offloading of new shares or issuing of rights shares will help the market to remain stable. "Then the market regulator will not need to intervene," he observed.

The DSE CEO said investors, including the institutional ones who are the major market players, should maintain prudential norms, not to be driven by emotions or higher expectations.

Sources said the government has already initiated a move to offload shares of some state-run organisations that include Bangladesh Shilpa Rin Sangstha (BSRS), Bangladesh Shilpa Bank, Basic Bank and Bakhrabad Gas Field.

Following the recent abnormal hike in share prices, the Securities and Exchange Commission (SEC) on Sunday directed the Dhaka and Chittagong bourses to place the shares of five companies under spot trade until further order.

The shares of the companies, which are now being traded on the spot market without any money adjustment facility, are Power Grid Company of Bangladesh (PGCB), Dhaka Electric Supply Company (Desco), Brac Bank, AB Bank and Summit Power.

Considering the fluctuation share prices of the five companies very risky for retail investors, the SEC intervened to protect the investors' interests.

The market regulator also withdrew financial adjustment facility from trading of B, N and G categories' securities with effect from July 29 in order to contain the abnormal hike in share prices.

Under the financial adjustment or money netting facility, anyone is allowed to purchase shares of any category of one's choice immediately after completing a sale of any share.

On Sunday, the total turnover on the DSE also reached an all-time high at Tk 275.17 crore surpassing the previous high of Tk 239.54 crore on July 17.

Following the SEC directives, the market witnessed a sharp fall in share prices on Monday with the benchmark index, DSE General Index, dropped by 42.27 points, or 1.76 percent. The turnover also came down to Tk 178.5 crore.

Earlier, the SEC placed Brac Bank, PGCB, Desco, Summit Power and Eastern Cables under the spot market without money adjustment facility from February 12 to 14 to ease the volatility in the share prices of the companies.

Meanwhile, the DSE indices increased yesterday. The DSE General Index rose by 23.03 points, or 0.97 percent, to close at 2378.83 points, while the DSE All Share Price Index up by 18.11 points, or 0.94 percent, to end at 1931.54 points.

The turnover also increased to Tk 187.01 crore. Of the issues traded, 106 advanced and 74 declined with 24 unchanged.