FE Report (January 31, 2011)
The securities regulator and experts again expressed their concern over the continuous rise of the stock market after the recent unprecedented crash of the market.
They said it is time for all to be prudent by taking into account the lessons of the recent unprecedented fall of the share market.
Otherwise, another disaster will befall them due to the irrational behaviour of the stock market, they observed.
Their concern comes after the continuous rally of the DSE General Index (DGEN), which gained more than 1246 points in last four trading sessions.
An official of the Securities and Exchange Commission (SEC) said the present behaviour of the stock market is not something to feel delighted over by both the market and retailers.
"The continuous rally of the DGEN, which gained on an average 300 points in the last four days, is not comfortable to regulator," the official said.
"However, investors ought to be prudent in the interest of their investments," the official said.
Professor Salah Uddin Ahmed Khan, who teaches finance at Dhaka University, said the market is likely to experience another disaster if the investors do not become aware of the realities.
"The investors should remember their recent experience before going for aggressive investments," Mr. Khan said.
"Otherwise, another disaster is inevitable, in which the retailers will be far more affected," he added.
Mr. Khan said the liquidity supply should be tightened gradually to control the continuous rally of the stock market.
"The regulator should play a role so that neither the market goes up riding on excess liquidity supply, nor is the market affected by hard measures," he said.
Another market expert said, asking not to be named, "The market is likely to embrace another disaster if the investors forget their recent experience."
Meanwhile, a market expert and merchant banker said that in normal case investors should take some profits when the market continuously goes up for three or four days.
"Investors should use their proper knowledge to avert another catastrophe," he said.
The market re-opened on January 25, and on that day the shares prices at Dhaka Stock Exchange (DSE) went up sharply and DGEN soared 494 points from the previous session of January 20, when the DGEN was close to 6326.34 points.
On the re-opening day, all indices gained nearly eight per cent, despite an insignificant turnover of Tk 2.06 billion, which was more than two years' lower since December 22, 2008 as investors were not in a position to sell their shares.
On Wednesday, the DGEN gained 458 points and all indices gained more than six per cent with the majority of the shares hitting upper level of their respective circuit breakers once again.
On the following day, the DGEN gained 105 points with a significant turnover of Tk 10.30 billion and experts termed the behavior comparatively mature.
All sectors scored remarkable gains close to 10 per cent last week but on Sunday, the DGEN gained more than 2.52 per cent or 186.69 points to 7572.61 points, which prompted concern.
They said it is time for all to be prudent by taking into account the lessons of the recent unprecedented fall of the share market.
Otherwise, another disaster will befall them due to the irrational behaviour of the stock market, they observed.
Their concern comes after the continuous rally of the DSE General Index (DGEN), which gained more than 1246 points in last four trading sessions.
An official of the Securities and Exchange Commission (SEC) said the present behaviour of the stock market is not something to feel delighted over by both the market and retailers.
"The continuous rally of the DGEN, which gained on an average 300 points in the last four days, is not comfortable to regulator," the official said.
"However, investors ought to be prudent in the interest of their investments," the official said.
Professor Salah Uddin Ahmed Khan, who teaches finance at Dhaka University, said the market is likely to experience another disaster if the investors do not become aware of the realities.
"The investors should remember their recent experience before going for aggressive investments," Mr. Khan said.
"Otherwise, another disaster is inevitable, in which the retailers will be far more affected," he added.
Mr. Khan said the liquidity supply should be tightened gradually to control the continuous rally of the stock market.
"The regulator should play a role so that neither the market goes up riding on excess liquidity supply, nor is the market affected by hard measures," he said.
Another market expert said, asking not to be named, "The market is likely to embrace another disaster if the investors forget their recent experience."
Meanwhile, a market expert and merchant banker said that in normal case investors should take some profits when the market continuously goes up for three or four days.
"Investors should use their proper knowledge to avert another catastrophe," he said.
The market re-opened on January 25, and on that day the shares prices at Dhaka Stock Exchange (DSE) went up sharply and DGEN soared 494 points from the previous session of January 20, when the DGEN was close to 6326.34 points.
On the re-opening day, all indices gained nearly eight per cent, despite an insignificant turnover of Tk 2.06 billion, which was more than two years' lower since December 22, 2008 as investors were not in a position to sell their shares.
On Wednesday, the DGEN gained 458 points and all indices gained more than six per cent with the majority of the shares hitting upper level of their respective circuit breakers once again.
On the following day, the DGEN gained 105 points with a significant turnover of Tk 10.30 billion and experts termed the behavior comparatively mature.
All sectors scored remarkable gains close to 10 per cent last week but on Sunday, the DGEN gained more than 2.52 per cent or 186.69 points to 7572.61 points, which prompted concern.
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