Small-cap firms see rise in stock prices
Thanks to recent BSEC order to raise their paid-up capital
Although the domestic stock market has been lodged in a downward trend for the past few weeks, shares of small capital based companies saw a rise in value on most days.
This is thanks to a recent order from the Bangladesh Securities and Exchange Commission (BSEC) that requires those companies to increase their paid-up capital.
Still though, the DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), plummeted 46 points, or 0.68 per cent, to 6,736 yesterday.
With this, the index has shed a total of 132 points in the last two days.
In the two weeks since December 7, the DSEX nosedived 312 points despite making a slight recovery in the meantime.
"People are rushing towards low paid-up capital based companies as they hope the company sponsors will increase the paid-up capital," said a stock broker preferring anonymity.
The BSEC had directed 65 companies from both bourses in the country that have paid-up capital below the mandatory Tk 30-crore limit to increase their capital.
According to regulations of the DSE and Chittagong Stock Exchange (CSE), the paid-up capital of listed companies in the main market must be at least Tk 30 crore.
The companies with paid-up capital above Tk 20 crore have been given time until June 30 next year to meet this limit while firms with less than Tk 20 crore in paid-up capital have time until December 31, 2022.
"These stocks have low impact on the index, so the index is not affected by their rise. However sell-offs in large capital based companies did affect the index," the stockbroker added.
Turnover at the DSE, an important indicator of the stock market, stood at Tk 807 crore, up 2 per cent from Tk 786 crore the previous day.
At the premier bourse, 100 stocks advanced, 241 declined and 33 remained unchanged.
Bangladesh Monospool Paper Manufacturing topped the gainers, rising 9.78 per cent, followed by Paper Processing, Asia Insurance, National Tea, and ICB AMCL First Agrani Bank Mutual Fund.
Savar Refractories shed the most, dropping 7.70 per cent, followed by Khan Brothers PP Woven Bag Industries, Khulna Power, Beach Hatchery, and Fine Foods.
Stocks of Beximco Ltd traded the most, worth Tk 128 crore, followed by Genex Infosys, One Bank, Asia Insurance, and Sena Kalyan Insurance.
The CSE also dropped yesterday as the CASPI, the main index of the port city bourse, dropped 142 points, or 0.72 per cent, to 19,596.
Among the 289 traded stocks, 69 rose, 193 fell and 27 remained same.