5-day free fall of share prices to be probed

Bangladesh Securities and Exchange Commission (BSEC) has decided to investigate the recent free fall of share prices in consecutive five sessions at the country’s twin bourses.    The decision came at a meeting of the commission on Wednesday, presided over by Professor M Khairul Hossain, chairman of the stock market regulator.    The surveillance department has already started probing the incident, said a statement.    In the sessions, DGEN lost 11.53% or 551 points to close at 4,224 points on Tuesday while DSEX, the newly introduced broader index based on free float shares also shed 366 points.   Punitive actions will be taken soon based on the investigation if anybody is proved to have been involved in breaching the securities laws, it added.   Meanwhile, the BSEC has formed panels to investigate unusual price hike of some companies as it noticed prices of some companies soared abnormally.    The commission on July 2 formed a committee to investigate unusual price movement of JMI Syringe and Medical Devices Limited. The stock rose by 276% or Tk98 in first 15 days of trading at the DSE.   The BSEC also formed two committees to investigate abnormal price movement of Al-Haj Textile Mills, Bangas, CVO Petrochemical Refinery and Summit Purbanchol Power Company Limited.    The stock market watchdog took steps to stop short sale and, as a part of this initiative, the enforcement department of the BSEC started taking action against 18 stock brokers and dealers as the commission found short sale by them.   The BSEC held hearing on five short-sale incidents and served show cause notices to 13 other short-sale cases.      “I personally want to term the fall as price correction as the market posted a substantial gain in last few weeks and there is nothing to be worried,” said a merchant banker, requesting anonymity. The market should let to run on its own feet rather than through regulatory intervention, he added.    He also said regulatory measures create panic among the investors and that’s why the BSEC should be more cautious in taking steps for the market.   “The BSEC is beating around the bush in the name of investigation as we did not see any action against the manipulator,” said Azhar Uddin a stock investor.    He urged the regulator publish investigative report on website and to bring culprits under laws.   “The market regulator should remain more cautious about the market manipulation. Otherwise, it would be volatile again,” said an investor.   A former DSE president urged the listed firms to ensure corporate governance as he thinks information leakage is mainly responsible for insider trading, which creates volatility in the market.    He urged the stock market regulator to take stern action against insider trading.