Dhaka stocks opened sharply lower on Thursday after the Bangladesh Bank clarified about its position on the capital market related laws.
In the first 40 minutes into the trade, the benchmark DSEX index shed 69 points or 1.02 per cent to 6,777.
Shariah-based DSES index dropped 12 points or 0.88 per cent to 1,425 while the blue-chip index DS30 lost 29 points or 1.15 per cent to 2,559.
Meanwhile, the central bank has clarified some issues related to the capital market discussed with the securities regulator in a meeting held on Tuesday.
The Bangladesh Securities and Exchange Commission (BSEC) delegation raised the legal complexities about the bank and financial institution’s exposures to the stock market in the Banking Companies Act, 1991 and the Financial Institutions Act, 1993 at the meeting.
“No decision has been taken yet about the issues but some media outlets reported about the outcome of the meeting by quoting the BSEC delegation, which was not accurate,” said the BB in a statement on Wednesday.
The unclaimed fund transfer by the banks and NBFIs to the capital market stabilisation fund (CMSF), and dividend disbursements by the loss-making banks and NBFIs were contradictory to the laws, which was told by the BSEC delegation during the meeting, it said.
After the meeting, the BSEC said that the BB would also allow banks to transfer unclaimed dividends to the market stabilisation fund bringing some amendments to the capital market stabilisation rules.
The Bangladesh Bank also agreed to relax the rules on banks’ investment in stocks in a move to shore up the capital market and settle the differences between the bank and securities regulators.
The banks’ investments in stocks will be calculated based on cost price instead of the market price, it said. The stock market exposure ceiling for a bank is 25 per cent of their capital, according to the banking company law.
The news left a positive impact on the market as stocks rebounded sharply on Wednesday, with the benchmark DSEX index surging the largest single-day gain in 19 months.
The DSEX index registered rapid gains, soaring by more than 143 points or 2 per cent to settle at 6,847.
