BSEC tightens noose on capital market gamblers

A stock’s price soaring, one fine day, for no good reason, has become a common occurrence at the bourse. 

What usually transpires is gamblers targeting a particular stock and making a quick buck, leaving the simple retail investors with a mountain of losses.

And it is this nuisance that the new commission captained by Shibli Rubayet ul Islam has targeted to eliminate from the market.

On Tuesday, the Bangladesh Securities and Exchange Commission (BSEC) asked the managing directors of both the stock exchanges to investigate any unusual price movement and deviation in earnings per share of listed companies from now onwards.

If any company’s share price rises or falls by more than 50 per cent in a month, an investigation must be carried out, said the directive.

The bourses will consider market manipulation, insider trading and other market abuses during the investigation, it said.

An investigation must also be carried out if the company’s earnings per share, annual or periodic, changes by 50 per cent or more compared with the previous year or period.

The bourses were also asked to inquire into price and volume changes by 30 per cent or more in 10 working days before the publication of any price-sensitive information.

The BSEC also asked the stock exchanges to probe if the average turnover of one month changes five or more times compared with the average turnover of the previous six months.

The bourses were asked to submit an investigation report on the issues within 45 working days of the incidents.

The development comes after the commission observed that the share prices of many companies were shooting up without any price-sensitive information, said BSEC officials.

And in the majority of the cases, the retail investors were hurt.

Moreover, many companies suddenly declare a huge profit or loss devoid of any logic, the officials said.

“The initiative has been taken to protect the interest of retail investors.  We will take action after getting a report from bourses,” Mohammad Rezaul Karim, spokesperson of BSEC, told Dhaka Tribune.