FE Report-January 31,2012 Tuesday
The securities regulator sits today (Tuesday) with the key stakeholders to discuss the overall market situation and find out the ways for restoration of confidence by containing the malpractices prevaied in the market, sources said.
The Securities and Exchange Commission (SEC) Monday informed the representatives of both the stock exchanges, top five brokers, Bangladesh Association of Banks (BAB), Association of Bankers, Bangladesh (ABB), Bangladesh Merchant Bankers Association (BMBA) and Central Depository Bangladesh Limited (CBDL) to attend Tuesday's meeting, which will be held at 11.30 am at the SEC office.
Meanwhile, before going to arrange the Tuesday's meeting, the policy makers of the SEC called on the finance minister AMA Muhith at his residence on Monday evening to inform him the market situation.
A confidential source said the regulator called the meeting due to its concern over the continuous flagging trend of the market where a group of opportunists is allegedly playing a role behind the declining trend of the market.
He said the regulator is likely to form an audit committee after Tuesday's meeting in a move to contain the artificial touches in the companies' un-audited financial statements.
"Different market related persons raised an allegation that some companies artificially reduced their profits in the un-audited financial statements so that the market prices of these companies go down due to investors' reluctance," the source said.
Many investors also raised similar allegation that the market price of some companies recently went down following the poor profits displayed in the un-audited balance sheets.
Normally, the listed companies submit their financial statements of the first, second and third quarter without any auditing to the securities regulator and the stock exchanges. Only the annual report has to be audited as per the existing rules.
The source said the regulator thinks that the companies' financial statements of the first, second and third quarter should also be audited like the practices used in other countries.
He said the regulator is likely to go tough to find out the market players who are playing a negative role to purchase the shares in lower prices.
The SEC last week formed an investigation committee to look into the aggressive sell pressure made by some institutional investors through own portfolios.
On January 22, the some institutional investors made a sell pressure worth Tk 150 million within eight minutes after the market starts its session and consequently the DSE general index (DGEN) followed a sharp fall.
The DSE official said on that day the greater amount of sell pressure came from a top broker and a unit fund, managed by a state-run organisation.
However, the DSE is also conducting an investigation over the aggressive sale executed by the alleged firms.
"At today's meeting the role of different stakeholders will also be discussed along with the malpractices, played by some opportunists, in a bid to take a joint move for the sake of market's restoration," the source added.
When asked the SEC Spokesman and Executive Director Mohammad Saifur Rahman said the regulator has called all the key stakeholders to discuss the overall market situation.
"The regulator has called the meeting in a positive sense to restore market's stability through the discussion," Rahman told the FE.
The securities regulator sits today (Tuesday) with the key stakeholders to discuss the overall market situation and find out the ways for restoration of confidence by containing the malpractices prevaied in the market, sources said.
The Securities and Exchange Commission (SEC) Monday informed the representatives of both the stock exchanges, top five brokers, Bangladesh Association of Banks (BAB), Association of Bankers, Bangladesh (ABB), Bangladesh Merchant Bankers Association (BMBA) and Central Depository Bangladesh Limited (CBDL) to attend Tuesday's meeting, which will be held at 11.30 am at the SEC office.
Meanwhile, before going to arrange the Tuesday's meeting, the policy makers of the SEC called on the finance minister AMA Muhith at his residence on Monday evening to inform him the market situation.
A confidential source said the regulator called the meeting due to its concern over the continuous flagging trend of the market where a group of opportunists is allegedly playing a role behind the declining trend of the market.
He said the regulator is likely to form an audit committee after Tuesday's meeting in a move to contain the artificial touches in the companies' un-audited financial statements.
"Different market related persons raised an allegation that some companies artificially reduced their profits in the un-audited financial statements so that the market prices of these companies go down due to investors' reluctance," the source said.
Many investors also raised similar allegation that the market price of some companies recently went down following the poor profits displayed in the un-audited balance sheets.
Normally, the listed companies submit their financial statements of the first, second and third quarter without any auditing to the securities regulator and the stock exchanges. Only the annual report has to be audited as per the existing rules.
The source said the regulator thinks that the companies' financial statements of the first, second and third quarter should also be audited like the practices used in other countries.
He said the regulator is likely to go tough to find out the market players who are playing a negative role to purchase the shares in lower prices.
The SEC last week formed an investigation committee to look into the aggressive sell pressure made by some institutional investors through own portfolios.
On January 22, the some institutional investors made a sell pressure worth Tk 150 million within eight minutes after the market starts its session and consequently the DSE general index (DGEN) followed a sharp fall.
The DSE official said on that day the greater amount of sell pressure came from a top broker and a unit fund, managed by a state-run organisation.
However, the DSE is also conducting an investigation over the aggressive sale executed by the alleged firms.
"At today's meeting the role of different stakeholders will also be discussed along with the malpractices, played by some opportunists, in a bid to take a joint move for the sake of market's restoration," the source added.
When asked the SEC Spokesman and Executive Director Mohammad Saifur Rahman said the regulator has called all the key stakeholders to discuss the overall market situation.
"The regulator has called the meeting in a positive sense to restore market's stability through the discussion," Rahman told the FE.
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