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DSE to launch new index to attract foreign investment

  • Published at 09:32 pm December 26th, 2019
DSE Tower at Nikunja o
A view of the new Dhaka Stock Exchange building at Nikunja in Dhaka Dhaka Tribune

Stock investors will be able to trade on the new index from January 1, 2020

The country’s prime bourse, Dhaka Stock Exchange (DSE), is going to launch a new index named-CNI-DSE Select Index (CDSET) on Monday to attract foreign portfolio investment in the country.

Stock investors will be able to trade on the new index from January 1, 2020, according to a DSE disclosure.

The base year of the index will be counted from 31 December 2015 and the base value will be 1,000 points with 40 companies. 

The index is jointly designed and developed by Shenzhen Securities Information Company Limited and Dhaka Stock Exchange as a part of technical collaboration plan between Dhaka bourse and Chinese strategic partner. 

The Chinese consortium of Shenzhen Stock Exchange and Shanghai Stock Exchange has been the strategic partner of DSE since May, 2018.

Currently, DSE has three indices-DSE broad index, DSE30 index and DSE Shairah Index.

According to the disclosure, as part of technical collaboration plan between DSE and Strategic Investors of DSE, one new Index namely, CNI-DSE Select Index ("CDSET") will be launched by DSE, designed and developed by Shenzhen Securities Information Co., Ltd. and Dhaka Stock Exchange Limited. 

The Index will go-live on Thursday and Index values will start displaying at homepage of DSE Website on 1 January 2020. The base date of the Index is December 31, 2015 with base value of 1,000 points, it says.

Meanwhile, DSE in an official statement said the index would be used as an identification tool for the large, medium and small companies and their price movements. 

The DSE would promote trading based on the new index, expected DSE authorities.

Earlier on November 9, this year, Liu Fuzhong, a director of the Shenzhen Stock Exchange, said they were  going to introduce a new index at the DSE to attract Chinese and others foreign investors to the secondary market of Dhaka bourse. 

He also said “We are working with the DSE to improve the technology of a platform which will reduce information asymmetry on the listed companies. If information asymmetry does not prevail, manipulation reduces.”

DSE officials said that in recent times the DSE index plunged with the price fall of a few large cap companies, as being a major reason.

“The huge impacts of the companies regularly affects the entire index and overall market situation gets volatile. In the long run, the large cap companies will be shifted to the new index to avoid overall market impact for the movement of a few large cap companies,” a top DSE official said.

He also said as the new index would be displayed in the Shenzhen Stock Exchange, foreign investors would be more informed about the country’s stock market.