DHAKA NEWS
Dhaka, Feb 29 Brokerage houses have been urged not to go for 'forced-selling' option, prime minister Sheikh Hasina told parliament on Wednesday.
Reply to a question from Noakhali-1 MP Mahbubuddin Khokan over stability of the share market, she also mentioned that commercial banks have agreed to invest 'more' in the capital market.
When a brokerage house or a merchant bank sells shares of clients in apprehension that total price of his/her shares could go below the margin loan taken from the broker, it is called 'forced selling'.
"Fluctuation in share prices is a normal phenomenon in share markets all over the world," she said.
The prime minister said the government is alert to safeguard the interests of capital market investors, and went on to enumerate the short-, mid- and long-term steps taken by her government in this regard.
"The market was overvalued in 2010. A committee, headed by [Khondkar] Ibrahim Khaled, was formed for this," she said.
Following the report of the committee, cases have been filed against five people, and 14 other issues are under investigation, she said.
"The process of giving tax exemption benefit on the shares bought from secondary market is underway," the prime minister informed.
She said current insider trading rule is weak and steps have been taken to make it more effective.
"Besides, they [brokers] have been urged to decrease the time taken to adjust trading to two days from three days, ease financial co-ordination and not to go for forced-sale," she added.
Fall in share prices since December 2010 caused the Dhaka Stock Exchange general index to shed 60 percent until the first week of last month.
Most of the small stock market investors, who had invested after getting loans from brokers, have fallen prey to forced-sale and lost their capitals.
Analysts say the pressure on selling created by forced-sale is the reason behind the fall.
On Nov 16 last year, the prime minister had met share market stakeholders and announced that the investors, who lost their money due to the continuous fall in share prices, will be compensated and a committee in this regard was formed later.
An incentives package was also announced to stabilise the sagging market.
The Securities and Exchange Commission (SEC) announced the package on Nov 23. Though the market saw stable trading in December, share prices once again fell abruptly in January.
Prices of shares have, however, been increasing since the second week of February.
After the committee to compensate the investors submitted its report on Feb 22, finance minister A M A Muhith said the government will announce the final modalities within 10 days.
Reply to a question from Noakhali-1 MP Mahbubuddin Khokan over stability of the share market, she also mentioned that commercial banks have agreed to invest 'more' in the capital market.
When a brokerage house or a merchant bank sells shares of clients in apprehension that total price of his/her shares could go below the margin loan taken from the broker, it is called 'forced selling'.
"Fluctuation in share prices is a normal phenomenon in share markets all over the world," she said.
The prime minister said the government is alert to safeguard the interests of capital market investors, and went on to enumerate the short-, mid- and long-term steps taken by her government in this regard.
"The market was overvalued in 2010. A committee, headed by [Khondkar] Ibrahim Khaled, was formed for this," she said.
Following the report of the committee, cases have been filed against five people, and 14 other issues are under investigation, she said.
"The process of giving tax exemption benefit on the shares bought from secondary market is underway," the prime minister informed.
She said current insider trading rule is weak and steps have been taken to make it more effective.
"Besides, they [brokers] have been urged to decrease the time taken to adjust trading to two days from three days, ease financial co-ordination and not to go for forced-sale," she added.
Fall in share prices since December 2010 caused the Dhaka Stock Exchange general index to shed 60 percent until the first week of last month.
Most of the small stock market investors, who had invested after getting loans from brokers, have fallen prey to forced-sale and lost their capitals.
Analysts say the pressure on selling created by forced-sale is the reason behind the fall.
On Nov 16 last year, the prime minister had met share market stakeholders and announced that the investors, who lost their money due to the continuous fall in share prices, will be compensated and a committee in this regard was formed later.
An incentives package was also announced to stabilise the sagging market.
The Securities and Exchange Commission (SEC) announced the package on Nov 23. Though the market saw stable trading in December, share prices once again fell abruptly in January.
Prices of shares have, however, been increasing since the second week of February.
After the committee to compensate the investors submitted its report on Feb 22, finance minister A M A Muhith said the government will announce the final modalities within 10 days.
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