Free-Fall In Bourses
SEC identifies 12 cos as market manipulators
No action taken yet
Published : Friday, 13 September, 2019 at 12:00 AM Count : 829
In the wake of continuous fall in share prices the Securities and Exchange Commission (SEC) has finally come out of its slumber and detected 12 listed companies engaged in market manipulation on Thursday.
It was not known what action the SEC has taken against the market manipulators.
Due to continuous market fall the SEC formed a committee as per Securities and Exchange Ordinance 1996-clause 21 and Securities and Exchange Act 1993-clause 17(A) that submitted its report on which the SEC identified the 12 listed companies for market manipulation.
The companies are United Power Generation and Distribution, VFS Thread Dyeing, IPDC Finance, SS Steel, Intek Limited, Sayham Cotton Mills, Ruplai Life Insurance, Munnu Ceramics Industries, Munnu Jute Staflers, ICB and Dutch-Bangla Bank Limited.
The report says the listed companies' sensitive manipulations were detected earlier and for detailed information their transactions were being monitored for a few days and finally it was found that the companies bypassed the rules of trading and were engaged in providing excess loans, auto client trade, irregularities in financial statement, short selling and in circular trading.
On Wednesday, Dhaka Stock Exchange (DSE) core index slumped to a 32-month low. The free fall in share prices raised concern among the investors who dumped their holdings to escape further loses.
The DSEX index eroded 75.78 points or 1.51 percent to dump at 32-month low to 4,933 points. It has lost a cumulative 1,017 points in the past seven months since January 24.
The market capitalization eroded Tk 503 billion to Tk 3,696 billion on Wednesday.
The slide began since the new budget was passed on June 30 without significant incentive for stock market. The market failed to rebound since then.
Analysts pointed out lack of investor confidence, market manipulation and uncertainty as the main causes for this free-fall in the share prices.
The government decision to use 'idle funds' of public sector entities for development work also caused the slump in the share market. Falling foreign investment and export earnings during last month also eroded confidence of local investors that triggered panic sell-off leading to depressed market portfolio.
The liquidity crunch of banks also caused erosion in the investors' confidence.
It is time to undertake joint and coordinated efforts by SEC, DSE, CSE and investors to recover confidence and rejuvenate the stock market. Market analysts also stressed on inducting good and reputed companies and also to punish the manipulators to restore investors' confidence.
In the wake of a free-fall of stock market in the last few months the local jittery investors took to the street and demanded resignation of SEC chairman and revitalization of the regulatory body.