SEC seeks 'internal guideline' on merchant bank lending | The Daily Star
12:00 AM, February 05, 2008 / LAST MODIFIED: 12:00 AM, February 05, 2008

SEC seeks 'internal guideline' on merchant bank lending

DSE turnover hits Tk 343cr

The stock market regulator has asked merchant banks to prepare 'internal guideline' on sanctioning loans to investors for purchasing shares.
This guideline will set a criterion for the amount and ratio of such lending, according to sources in the Securities and Exchange Commission (SEC).
The merchant banks, however, cannot cross the loan ratio set by the commission. It re-fixed Sunday the ratio at 1:1 for merchant banks' lending. This ratio comes into effect from February 10.
The directive on the guideline came at a meeting between the regulator and merchant bankers in Dhaka yesterday.
The merchant banks are also required to submit statements on margin loans with the ratio every month to the SEC.
The merchant banks' loan activities will also be brought under SEC monitoring.
“The decisions were taken to bring transparency and accountability in merchant banking,” said an SEC high official.
Meanwhile, huge trading of shares in heavyweights like energy and power, mutual funds and banking on the Dhaka Stock Exchange (DSE) pushed the turnover to its highest level at Tk 343 crore yesterday, surpassing the previous highest of Tk 316.83 crore on August 21 last year.
Share trading of 10 companies alone reached around Tk 185 crore, an amount that accounts for more than 50 percent of the total turnover, on the premier bourse.
State-run Jamuna Oil Company topped the day's turnover list with Tk 66.64 crore followed by Grameen Mutual Fund One with Tk 18.88 crore, AIMS First Mutual Fund with Tk 17.23 crore, Meghna Petroleum Company with Tk 15.23 crore and AB Bank with Tk 13.39 crore.
The five other turnover leader were Brac Bank with Tk 12.44 crore, Summit Power with Tk 12.17 crore, LankaBangla Finance with Tk 10.99 crore, IFIC Bank with Tk 9.05 crore and National Bank with Tk 8.15 crore.
Market experts said investors were in a positive mood following the regulator's declaration that it would raise the ratio of merchant bank loans.
Investors now get encouraged at re-fixation of such lending ratio and restoration of netting facilities, they said.
Yawer Sayeed, managing director and chief executive officer of AIMS Bangladesh, said: “The investors are in a fresh mood with re-managing their portfolios. However, the market behaviour is normal.”
All the indices also rose yesterday with the gainers outnumbering the losers.
The DSE General Index increased by 49.67 points, or 1.71 percent, closing at 2939.92 points, while the DSE All Share Price Index rose by 40.09 points, or 1.64 percent, finishing at 2476.92 points.
A total of 34478815 shares worth Tk 343.77 crore changed hands on the bourse. Of the issues traded, 159 advanced and 64 declined with 13 unchanged.
Like DSE, price indices on the Chittagong Stock Exchange (CSE) also rose.
The CSE Selective Categories Index increased by 66.35 points, or 1.39 percent, to close at 4810.56 points, while the CSE All Share Price Index rose by 98.89 points, or 1.33 percent, to finish at 7485.82 points.
A total of 7651917 shares worth Tk 63.12 crore changed hands on the port city bourse. Of the issues traded, 102 advanced and 24 declined with eight unchanged.

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