New SEC instructions for bourses

The Securities and Exchange Commission (SEC) yesterday formally instructed both Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) authorities to calculate the index point of a debutant company from the second day of trading on the bourses to put the practice on international standard.
Recently, SEC, DSE and CSE were criticised by different quarters and stock market experts for counting the index points, the market barometer, in a wrong method.
The fresh decision came after a meeting of SEC Chairman Ziaul Haque Khandker with the chief executive officers (CEOs) of the two bourses at its office to explain the complexities arisen with regard to index counting.
According to the new rules, the bourses will count the index point on the basis of first day's last trading price of the debutant company with the average index points of the second day to remove any complexities in such counting, said SEC Executive Director Farhad Ahmed.
He said both CSE and DSE will follow the rules from now on, meaning the next debutant company's index counting will be brought under the new method.
In a recent interview with The Daily Star, Ziaul Haque Khandker said the first day of a company's trade on stock market does not provide a benchmark from where the points could be counted for the next day.
The SEC chief said if the bourses count a company's trading debut with the previous day's average benchmark points, the index rises "very high", which is a wrong calculation.
The result is, the investors -- especially the new comers -- feel tempted to invest, influenced by the higher position of the index.
On the debut day of Grameenphone, the DSE counted in the face value of Tk 10 instead of Tk 70 per share. As a result, the index point increased manifold.
DSE General Index (DGEN), the benchmark index, skyrocketed by more than 764 points, or more than 22 percent on Grameenphone's debut. The lone telecom company on stock market added more than 700 points alone.
With the landmark jump in the key indices, the DGEN crossed the 4,000-mark for the first time and finally closed at 4,148.11 points.
In another development, the SEC yesterday formed an enquiry team to trace out the persons who are spreading rumour about stock market and price influencing opinions by using such social network services as Facebook.
The team headed by SEC Executive Director ATM Tariquzzaman has been asked to submit its findings and recommendations by January 25.