Volatility and downtrend on the Dhaka Stock Exchange (DSE) continued for a third consecutive session yesterday as worried investors were in a ‘wait-and-see’ mood about the court decision on minimum share-holding rule.

The High Court hearing on the minimum two percent share-holding by company sponsor-directors, which was scheduled to be held on Wednesday, is now set to take place today.

“As the political outlook clouded today (Wednesday), investors preferred safe territory rather than fresh investment and followed wait-and-see policy,” said IDLC in its regular market analysis.

The session started with a positive note with the key market index advancing 66 points in the first 90 minutes on the expectation of a positive outcome of the court hearing.

But news of jail sentence of top leaders of main opposition BNP and its allies adversely affected the market, ebbing the early gains.

The benchmark DGEN General Index, the main yardstick of DSE, ended at 5,010 points, after shedding 10 points or 0.19 per cent.

The broader All Shares Price Index, DSI, also declined 5 points or 0.10 per cent to 4,224 points while the DSE-20 index comprising blue-chip shares plunged 29 points or 0.76 per cent to 3,816.

Out of 260 issues traded, 135 gained, 100 declined and the rest 25 remained unchanged.

Thanks to the session’s flat movement, all the major sectors made negligible change with general insurance gaining 2.32 percent, non-bank financial institutions 0.73 percent and power 0.25 percent. Telecommunication remained almost flat.

Banks lost 0.66 percent, while pharmaceuticals witnessed negligible fall.

Day’s total turnover value stood at Tk 3.5 billion, which was 19.4 percent lower than that of the previous session.

Khulna Power Company Limited topped the turnover chart yesterday with a total turnover value of Tk 165.4 million.

Pioneering Insurance was the top gainer of the day while Standard Insurance was the worst loser.

The Daily Sun/ Bangladesh/ 17th May 2012

Maj Gen Ashraf Abdullah Yussuf, Adjutant General, Bangladesh Army, and Vice Chairman, Trust Bank Limited, hands over the key of an ambulance to Colonel Md Farid Uddin, Station Commander, Comilla Cantonment in Dhaka.

Trust Bank Limited handed over an ambulance to Mainamati Cantonment General Hospital, Comilla at its Principal Branch, Dhaka on Wednesday as a part of the CSR activities of the Bank.

Maj Gen Ashraf Abdullah Yussuf, rcds, afwc, psc, Adjutant General, Bangladesh Army and Vice Chairman, Trust Bank Limited, handed over the ambulance as the chief guest.

Directors Brig Gen KARM Mostafa Kamal, ndc, psc, Brig Gen Tushar Kanti Chakma, ndc, psc, Begum Rokeya Din and Managing Director and CEO of the Bank Shah A Sarwar were present on the occasion.

Colonel Md Farid Uddin, Station Commander, Comilla Cantonment received the ambulance.

The Daily Sun/ Bangladesh/ 17th May 2012

WASHINGTON: The World Bank yesterday announced it was ready to provide Indonesia with a $2 billion loan, a backstop against a potential debt crisis in one of Asia’s fastest growing economies.

The World Bank said the loan, requested by the Indonesian government, would be held as a contingency against “possible future shocks and volatility.”

While Indonesia has long seen growth rates that would be the envy of the United States or European nations, the economy has slowed recently thanks to a drop in export demand.

The Daily Sun/ Bangladesh/ 17th May 2012

STOCKHOLM: The International Monetary Fund (IMF) warned that due to the stronger Swedish kronor, Swedish economy could face a brake this year with weak export demand and economic growth of somewhere between zero and 1 percent, local media reported yesterday.

According to the Swedish daily Dagens Nyheter (DN), the IMF commented the banking system of Sweden as vulnerable in that it was five times bigger than the country’s GDP, which together with the reliance on dollar financing and the exposure to the economic situation of other European countries, could be a problem for the Swedish economy.

Meanwhile the Swedish authorities were planning to introduce higher capital criteria in the bank responding to the weak development of housing market and the high proportion of loan that reached 170 percent of the income of Swedish families.

According to the IMF, there was further room for Sweden to lower its housing prices until they reached a stable level and the fall in prices, however, would not cause big problems for banks and the financial system.

The Daily Sun/ Bangladesh/ 17th May 2012

Presidents of the bourses and experts have expressed their concern over investors' 'over dependency' on the issue of holding minimum two per cent shares by sponsor-directors, as at present, it seems to surpass all other fundamentals issues.

They said there are other important fundamental issues, which should be considered for the market's growth and stability.

Their comments came Monday, as the market has recently faced volatility due to rumours regarding the upcoming verdict on the writ petitions filed with the High Court (HC), challenging the directive of holding minimum two per cent shares by sponsor-directors.

"What's the necessity of such a market where the investors mainly depend on the issue of holding 'two per cent' or 'thirty per cent' shares?" said the Dhaka Stock Exchange (DSE) president Rakibur Rahman.

He said in a stock market the dependency on rumours may be twenty to thirty per cent. "But how is it possible that the investors fully depend on rumours?"

He said a group of unscrupulous people are spreading rumours regarding the writ petitions.

"Some people are saying a lawyer is not related with the petition. On the other hand, others are saying that such lawyer is related with the petition. As a result, the market is experiencing a volatile situation," Rahman said.

He said rumours were also created while the monetary policy was unveiled.

"The central bank fixes its monetary policy considering the national economy. So, why will the investors depend on rumours without depending on the companies' fundamentals?"

He said the securities regulator and both the stock exchanges are trying to win the writ petitions. "But the natural growth of the market will be affected, if other fundamental issues are not prioritised."

Akter H Sannamat, a market expert and former managing director of Prime Finance and Investment, said other issues, which should be addressed at this moment, are becoming invisible due to the recurrent discussion on holding minimum two per cent shares by the sponsor-directors.

"The issue of purchasing shares by sponsor-directors is a short-term measure. What will happen after the issue is over?"

He said it is necessary to put light on other important long-term issues besides minimum shareholding by sponsor-directors.

"Now we should think about the upcoming budgetary measures, which will have a long-term impact on the market," Sannamat said.

He stressed on bringing more foreign investors by offering them facilities for the sake of long-term development of the market.

"Other important issues will remain unaddressed, if the authorities concerned and the investors mainly focus on minimum shareholding by sponsor-directors," Sannamat added.

However, the Chittagong Stock Exchange (CSE) president Al-Maruf Khan expressed different opinions regarding the issue of holding minimum two per cent shares by sponsor-directors.

"Minimum holding of shares by sponsor-directors was an important issue in the stock market rejuvenation package. Other issues were suggestive. That's why, the investors' expectation regarding the compliance of purchasing two per cent shares was triggered," Khan told the FE.

However, the market will face more volatility, if it takes more time to settle the issue. The investors should not depend on only one issue to purchase or sell their shares, he added.

Professor Dr. Mahmood Osman Imam of finance department of Dhaka University said other issues should also be prioritised for the sake of the market.

"The issue of holding minimum portion of shares should have been solved earlier through relaxed way," Imam told the FE.

Financial Express/ Bangladesh/ 15th May 2012