Only a day after its issuance, the securities regulator on Wednesday deferred the execution of its order to investigate the reasons for the “abnormal” hike in share prices, trade volumes, and earnings per share of listed companies in recent days.
The latest directive came following a sharp correction of the broad index of the stock exchanges on Wednesday.
On Tuesday, the BSEC directed both bourses to investigate whether market manipulation, insider trading and other market abuses were responsible for the abnormal price spike in some listed securities.
When asked, the BSEC spokesperson Mohammad Rezaul Karim said the Tuesday’s order has been deferred considering the ‘ interests of the investors and the market’. He, however, did not explain the reasons behind the issuance of the first directive.
During the past few weeks, the prices of some shares recorded a notable rise though there had been no disclosure of price-sensitive information by the relevant companies.
In the Tuesday’s order both the bourses were asked to conduct investigations if the closing price changes (increase or decrease) by more than 50 per cent in fewer than 30 working days or above.
The BSEC also asked the exchanges to probe the reasons behind changes up to 50 per cent or above observed in the annual or periodic EPS (earnings per share) of listed securities.
The BSEC warned of investigations if a company’s one month’s turnover become five times or above compared to the average transactions of the previous six months.
The exchanges were also asked to carry out investigations if the companies’ share prices and trade volumes change 30 per cent or above within 10 working days before any price sensitive information (PSI) is made public.
On Wednesday, the commission also set the highest interest rate on margin loan at 12 per cent.
The broad index of the Dhaka Stock Exchange (DSE) on Wednesday slumped 1.55 per cent or 91.01 points as the majority of listed firms, including some market leaders, lost prices.
The BSEC sent another letter to both the stock exchanges ‘deferring’ the effectiveness of its Tuesday’s directive.
At Wednesday’s meeting, the securities regulator fixed the highest interest rate at 12 per cent on margin loan disbursed against listed securities.
It said the highest spread on the cost of margin loans will be 3.0 per cent.
The BSEC also approved the proposal of a Tk 5.0 billion zero coupon bond to be issued by IDLC Finance. The fund will be used for meeting the company’s current expenditures.
The tenure of the bond will be four years and characteristics are unsecured and non-convertible.
The bond will be issued to local financial institutions, insurers, different types of funds and corporate entities through private placement.
The offer price of the bond will be Tk 5.0 million per unit.