Dhaka bourse to brief govt on stockmarket

Dhaka Stock Exchange will place a set of observations to the government that the premier bourse gathered from a discussion with 30 brokerage firms on the current situation in the stockmarket.
Before submitting the findings to the government, the DSE board will give some additional observations on the present market situation and request the government to take measures to rejuvenate the market, which is now facing volatility.
“The turnover is declining abnormally and it made us concerned. We sat with the top brokerage houses to identify why the turnover is sliding,” DSE President Shakil Rizvi said after a meeting with the brokers yesterday.
“We will first submit the findings to the Securities and Exchange Commission and the central bank, and then to the finance ministry,” he said.
Rizvi said all who attended the discussion acknowledged that liquidity dearth is the major problem for the declining trend both in turnover and share price indices.
“The brokerage houses owned by financial institutions told us that they are facing a liquidity dearth, while their cost of doing business is increasing due to high interest rate and tax on brokerage commission,” he said.
Quoting some brokers, Rizvi said single party exposure to the stockmarket investment and the shorter period of time to adjust the overexposure created a sell pressure in the market.
“A fear also created among the institutional investors that what will have in the new Bank Company Act,” he said, adding that almost all the institutional investors take a go-slow policy.
The role of mutual funds in a bearish market was also discussed in the meeting.
“Mutual funds are launched especially to invest in the secondary market. But, we don't know whether their managers are utilising the funds in a bearish market like now. We will request the SEC to see the issue,” Rizvi said.
DSE Senior Vice-president Ahsanul Islam said the market lost its momentum that it witnessed after the January-February debacle in share prices. “We sat and discussed how we can overcome the situation and get back the momentum,” he said
The existing price level and price-earnings ratio of shares showed that the market is now attractive for investment, he said, adding that there is nothing to be worried.