The Dhaka Stock Exchange (DSE) was in the dark about the recent “unusual” rise of share prices of low cap companies.
“We did not look into the matter so far because we remained busy with the important tasks like demutualisation process,” Ahsanul Islam Titu told a press briefing at the DSE office yesterday.
Shares of some small and medium cap companies, including Modern Dyeing, CVO Petro Chemical, Bangas, Anawar Galvanising, Tallu Spinning and Mithun Knitting have increased abnormally in recent times, brokers said.
Some retail investors have already burnt their fingers as the market remained volatile over the price hike of poorly performing stocks, traders said.
Replying to a question, Titu said: “We cannot investigate spontaneously unless anybody lodged allegation against those companies. Everybody has rights to make profits. This is nothing wrong.”
However, he said they can easily detect unusual trading through the surveillance system. “DSE surveillance department is now working to find out the reasons behind such unusual price rise of low cap companies,” he said.
The listing department has also a power to suspend share trading of any company, but it remained ineffective, he said. “If we go for action, it will give negative signal to the market,” he added.
About alleged anomalies on space allotment in its under construction 13-storied building among the 250 members, the DSE president categorically denied the allegation. “The space has neither been allotted nor leased out among the members,” he said.
“Members are only permitted to use the space in stock trading activities. They have to surrender the space when they would leave the stock business,” he said.
Replying to a question, he said the demutualisation scheme as proposed by the bourses is expected to be finalised by the regulator by September 26. Before giving approval to the proposed scheme, a hearing will be held tomorrow, he said
Describing his experience about OIC summit in Turkey he took part recently, the DSE president said financial products are popular in the Islamic countries. “We are working on introducing an Islamic Shariah Index to increase investment of Islamic Shariah-based banks in the stock market,” he said.
About the refinancing scheme fund for the small investors, who have lost money in the market downswings in 2010-2011, he said the merchant banks and stock brokers are yet to apply for the fund. “The Investment Corporation of Bangladesh (ICB) is ready to distribute the fund,” he said.
DSE Senior Vice President Md Shajahan, Vice President Md Mizanur Rahman Khan, Directors Shahed Abdul Khaleque, Khugesta Nur-E-Naharin and Chief Executive Officer Dr Swapan Kumar Bala were present.