FE Report (January 11, 2011)
Securities regulator has once again bumped up margin loan ratio in a frantic attempt to reverse the slide in stocks that dropped a record 9.0 per cent in an hour.
The Securities and Exchange Commission (SEC) said investors would be now eligible for margin loan at 1:2 instead of the current 1: 1.5 and lifted restrictions on 14 companies being traded at the spot market.
He also said netting facilities have been opened for all non-marginable securities.
The SEC chairman Ziaul Haque Khondker said the stock market would bounce back again as the watchdog took a series of steps with the support from the central bank.
He also denied that the regulatory agency was responsible for the continued fall in the stock market.
Trading on the Dhaka Stock Exchange (DSE) was halted when stocks plunged 9.25 per cent soon after opening, prompting street protests by thousands of investors.
"Our steps will pay off: the stock market will bounce back following a normal and logical way. The normal trading will start at 11 am from Tuesday (tomorrow)," Mr. Khondker told newsmen at his office.
His insistence came Monday at a press briefing after an emergency meeting with leaders of bourses and merchant bankers' association.
The SEC top boss also disclosed two decisions of Bangladesh Bank (BB) taken Monday in the face of investors' demand and strong protest.
"The BB has further delayed the deadline set on January 30 for adjusting the industrial loans, which were invested in the stock market," he said.
The BB also expanded the single borrower's exposure limit from 10 per cent to 15 per cent of the paid-up capital of merchant banks.
SEC chairman said his agency's latest move is intended to increase the purchase power of investors.
He also said from now on, the market would not face liquidity crisis.
The SEC boss defended the frequent regulatory decisions, saying these happen in other countries, too.
Muhammad Yasin Ali, a member of SEC, said the regulator is passing through "a very critical time" owing to the continuous fall of the stock market.
"In such a situation, we want to convey the positive message to the investors," Mr. Ali said.
The DSE president Shakil Rizvi, DSE chief executive officer Satipati Moitra, CSE president Fakhor Uddin Ali Ahmed were also present at the press briefing.
The SEC chairman said the transaction done on Monday would remain valid and no merchant bank will carry out trigger sale.
Securities regulator has once again bumped up margin loan ratio in a frantic attempt to reverse the slide in stocks that dropped a record 9.0 per cent in an hour.
The Securities and Exchange Commission (SEC) said investors would be now eligible for margin loan at 1:2 instead of the current 1: 1.5 and lifted restrictions on 14 companies being traded at the spot market.
He also said netting facilities have been opened for all non-marginable securities.
The SEC chairman Ziaul Haque Khondker said the stock market would bounce back again as the watchdog took a series of steps with the support from the central bank.
He also denied that the regulatory agency was responsible for the continued fall in the stock market.
Trading on the Dhaka Stock Exchange (DSE) was halted when stocks plunged 9.25 per cent soon after opening, prompting street protests by thousands of investors.
"Our steps will pay off: the stock market will bounce back following a normal and logical way. The normal trading will start at 11 am from Tuesday (tomorrow)," Mr. Khondker told newsmen at his office.
His insistence came Monday at a press briefing after an emergency meeting with leaders of bourses and merchant bankers' association.
The SEC top boss also disclosed two decisions of Bangladesh Bank (BB) taken Monday in the face of investors' demand and strong protest.
"The BB has further delayed the deadline set on January 30 for adjusting the industrial loans, which were invested in the stock market," he said.
The BB also expanded the single borrower's exposure limit from 10 per cent to 15 per cent of the paid-up capital of merchant banks.
SEC chairman said his agency's latest move is intended to increase the purchase power of investors.
He also said from now on, the market would not face liquidity crisis.
The SEC boss defended the frequent regulatory decisions, saying these happen in other countries, too.
Muhammad Yasin Ali, a member of SEC, said the regulator is passing through "a very critical time" owing to the continuous fall of the stock market.
"In such a situation, we want to convey the positive message to the investors," Mr. Ali said.
The DSE president Shakil Rizvi, DSE chief executive officer Satipati Moitra, CSE president Fakhor Uddin Ali Ahmed were also present at the press briefing.
The SEC chairman said the transaction done on Monday would remain valid and no merchant bank will carry out trigger sale.
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