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No Companies Transitioning to ‘Z’ Category yet, says DSE MD

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Recently, due to spreading rumors on social media platforms, the stock market has been adversely affected. There is a rumor circulating in a Facebook group that some companies listed on the Dhaka Stock Exchange (DSE) are transferring to the ‘Z’ category. However, according to Dr. A.T.M. Tariquzzaman, the Managing Director of the Dhaka Stock Exchange, no decision has been made yet to send any company to the ‘Z’ category. He also informed that without the permission of the Bangladesh Securities and Exchange Commission (BSEC), DSE cannot directly send any company to the ‘Z’ category. At the same time, the Managing Director of DSE, Md., stated that tough action will be taken against those involved in spreading baseless information and rumors through social media. He said efforts are underway to identify those who have tried to destabilize the market by spreading such rumors. Strict measures will be taken against the culprits legally so that no one can spread such rumors in the future. DSE is taking stringent steps in this regard.

Recent developments have once again stirred up a self-serving environment, aiming to destabilize the country’s stock market, primarily utilizing the tool of social media, particularly Facebook. A few days ago, rumors about floor prices had created instability in the market, sparking a cycle of speculation. Subsequently, a rift between the regulatory body, BSEC, and DSE, led to the dissemination of various baseless rumors, further destabilizing the situation. Amidst this ongoing turmoil, new rumors have surfaced, alleging that several companies listed on the primary stock exchange, DSE, are being downgraded to the ‘Z’ category. The significant impact of such rumors on market stability is already evident. However, stakeholders have affirmed that these rumors, like previous ones, are baseless.

Dr. A.T.M. Tariquzzaman, the Managing Director of the Dhaka Stock Exchange (DSE), stated on Sunday (March 17th) to Orthosongbad that the information circulating regarding several companies being shifted to the ‘Z’ category by DSE is baseless and mere rumor. No decision has been made by DSE to downgrade any company to the ‘Z’ category at this moment. There is currently no company newly categorized as ‘Z’. Additionally, according to BSEC’s directive, DSE would require commission approval to directly downgrade any company to the ‘Z’ category. However, in the future, DSE may have the authority to directly transfer companies to the ‘Z’ category. Previously, any company transferred to the ‘Z’ category was done so in accordance with the law and after informing BSEC. Dr. Tariquzzaman advised investors not to be alarmed by baseless information and rumors. DSE is working to identify those spreading rumors. Individuals involved in spreading baseless rumors will be identified and brought within the purview of the law to prevent such actions in the future.

On February 15th, initially, 22 companies, and subsequently, on March 4th, an additional 6 companies sent to the ‘Z’ category. However, new rumors have emerged suggesting that several more companies are heading towards the ‘Z’ category, and for those companies whose shares are still trading at floor prices, their floor prices are increasing. Several companies’ lists are being circulated on social media platform Facebook, spreading rumors. Among these lists, several companies have already been categorized under the ‘Z’ category. Despite this, ordinary investors are becoming anxious, believing in these baseless rumors. Market participants believe that such rumors are creating an unstable situation in the stock market. However, as of now, the Bangladesh Securities and Exchange Commission (BSEC) has not taken any decision regarding this matter.

Prior to this, on March 10th, in a press release, BSEC informed about their position regarding the ‘Z’ category and floor prices. Cautioning against rumors, BSEC stated in the press release that baseless rumors about floor prices and the ‘Z’ category are being spread intentionally through social media to incite a particular agenda in the stock market. Currently, the commission has no intention of making any such decision. BSEC has urged everyone to be vigilant against such rumors and has requested cooperation from all parties, including DSE, to counteract those who create such rumors.

It is known that except for six companies, the Securities and Exchange Commission (BSEC) has revoked the floor prices of all other companies’ shares. After the revocation of floor prices, the stock market has gradually regained momentum. From January 29th to February 11th, the Dhaka Stock Exchange (DSE) witnessed a continuous rise for ten consecutive trading days, during which the index gained 368 points. Moreover, from February 1st to February 15th, daily transactions exceeded one billion taka. Between February 4th and February 13th, transactions surpassed four billion taka for eight consecutive trading days. However, the trend of the market’s upward movement has been disrupted by false information and rumors, resulting in a decline in both transactions and indices.

As a result of the rumors, the market has remained in decline for the past few days. Due to the continuous downward trend, on Wednesday (March 13th), the main index of DSE, ‘DSE X’, returned to its previous position before the floor price imposition. On that day, the main index ‘DSEX’ of DSE dropped by 32.76 points to stand at 5,974 points. Previously, on July 28, 2022, the DSE Broad Index ‘DSEX’ fell below 6,000 points. The index stood at 5,980 points. On that day, in the afternoon, BSEC imposed the floor price or the lower limit for shares in the market.

Earlier, on March 7th, the main index of the exchange, ‘DSEX’, lost 53.37 points. The index stood at 6,112 points on that day. Additionally, the index of selected companies, ‘DS30’, decreased by 12 points. And the index of Shariah-based companies, ‘DSES’, dropped by 7.12 points. Since then, the market has been bearish.

Recently, the impactful effects of the rumors surrounding the ‘Z’ category have been observed during the farewell week. During the last week (March 10th to March 14th), the market capitalization at DSE decreased by over 49 billion taka. Moreover, trading at DSE declined by 31.07%. During the week, the main index of the Dhaka Stock Exchange, ‘DSEX’, dropped by 144.72 points

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Bearish Trend on DSE

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Dhaka Stock Market DSE, Bourse on the last working day of the week, 18th July, ended with a drop in Indices and Turnover from the previous working session. This information is known from DSE sources.

391 crore 52 lakh taka shares were traded on this day. 192 crore 89 lakh less tradings were done in DSE today compared to the previous workday, July 16th, Shares worth Tk 662 crores 24 lakh shares were traded last time, Tuesday.

The benchmark DSEX decreased 36.64 points or 5,446 The Shariah-based index DSES dropped 10.43 points or 1,191 and the blue-chip index DS30 lost by 8.10 points or 1,953.

Of the issues traded, 38 advanced, 311 declined and 46 remained unchanged.

Techno Drugs Limited ranked top gainer on DSE, the share price increased by Tk 3.10 paisa or 9.72 percent. On this day, the share was last traded at Tk 35.00 paisa.

BD Thai Aluminium Limited ranked top loser on the DSE, the share price dropped by Tk 0.60 paisa or 3.00 percent. On this day, the share was last traded at Tk 19.40 paisa.

DSE topped on trade is Sea Pearl Beach Resort & Spa Limited 15 crore 86 lakh takas of company shares have been traded.

A total of 31 companies’ shares were traded in the Block on Dhaka Stock Exchange. A total of 1 crore 6 lakh 61 thousand 203 shares of the companies were traded. The financial value of which is 31 crore 82 lakh taka

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Asian markets drop with Wall St as Biden sparks fresh chip fears

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Asian markets sank with Wall Street on Thursday after a warning from the White House that it would target firms supplying China with key semiconductor technology, and Donald Trump’s comments on crucial chip supplier Taiwan.

The dollar remained subdued following its latest retreat caused by growing expectations that the Federal Reserve will cut interest rates at least once this year.

Firms linked to artificial intelligence have led a surge in equities this year as investors see the sector as the next major growth area, with market darling Nvidia piling on more than 140 percent since the start of the year.

The industry has helped push the S&P 500 and Nasdaq to multiple records in the past seven months, helped by the prospect of lower borrowing costs.

But the rally took a blow Wednesday when Bloomberg News reported that Joe Biden was looking at imposing strict curbs on firms such as Tokyo Electron and ASML if they continue allowing Beijing access to their chip tech.

The report, which comes as he looks to buttress his credentials as strong on China ahead of November’s presidential election against Trump, sent shivers across trading floors, sending the Philadelphia Semiconductor Index plunging nearly seven percent — its heaviest loss since 2020.

Nvidia dived more than six percent and Dutch firm ASML collapsed more than 12 percent.

Tokyo Electron fell 7.5 percent on Wednesday and a further 9.5 percent Thursday. TSMC shed more than three percent in Taipei.

Meanwhile, Trump’s comments that Taiwan — home of the key chip-maker TSMC and other major producers — should pay the US for its defence caused some geopolitical unease.

The fear fuelled a sell-off across Asian equities, with Tokyo and Taipei down at least two percent, while there were also hefty losses in Hong Kong, Shanghai, Sydney, Seoul, Singapore and Manila.

Analysts warned that the imposition of more chip restrictions could fuel further selling and lead to a correction in markets, which some warn have become overbought.

– ‘A big currency problem’ –

Worries over tech have offset the feel-good mood that has been sparked by recent data and comments from Fed officials indicating they are ready to cut interest rates as soon as September, and possibly again before January.

The latest boost for doves came in the central bank’s Beige Book summary of the economy, which said there were signs it was slowing.

“Expectations for the future of the economy were for slower growth over the next six months due to uncertainty around the upcoming election, domestic policy, geopolitical conflict, and inflation,” the report said.

The prospect of lower rates has weighed on the dollar, while the yen — which has been battered against the greenback this year — has won support from bets on a Bank of Japan hike in coming months.

“Markets are pricing in the Fed to start cutting rates in September, and risks of yen carry trade — the practice of borrowing low yielding currencies to invest in high yielding currencies — unwinding are building as yield gap narrows,” Saxo researchers said in a note.

“Recent comments from Trump have also hinted at concerns from US dollar strength.”

Trump, in Milwaukee for the Republican National Convention, has also weighed in on the dollar’s relative strength against the yen and yuan, telling Bloomberg Businessweek “we have a big currency problem” and “I would always notice they fought very hard to keep their currency low”.

Taylor Nugent, at National Australia Bank, said: “The comments play to the view (that) bilateral trade deficits and currency valuations are a key focus, and tariffs would be a key negotiating tool.”

Investors are keeping tabs on Beijing, where China’s leaders are expected to wrap up a key gathering, with hopes President Xi Jinping will unveil fresh measures to boost the world’s number two economy.

– Key figures around 0300 GMT –

Tokyo – Nikkei 225: DOWN 2.0 percent at 40,277.86 (break)

Hong Kong – Hang Seng Index: DOWN 0.5 percent at 17,652.42

Shanghai – Composite: DOWN 0.6 percent at 2,944.67

Pound/dollar: DOWN at $1.3007 from $1.3012 on Wednesday

Euro/dollar: DOWN at $1.0938 from $1.0941

Dollar/yen: DOWN at 155.92 yen from 156.33 yen

Euro/pound: UP at 84.09 pence at 84.07 pence

West Texas Intermediate: UP 0.7 percent at $83.39 per barrel

Brent North Sea Crude: UP 0.5 percent at $85.49 per barrel

New York – Dow: UP 0.6 percent at 41,198.08 (close)

London – FTSE 100: UP 0.3 percent at 8,187.46 (close)

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LafargeHolcim reveals their Q2 Financials

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One of the listed companies, LafargeHolcim Bangladesh Limited discloses its financial reports for the second quarter, (April – June 24).

The company’s Consolidated earnings per share (EPS) Tk 1.14 paisa in Q2 of the current financial year (April – June 24). Consolidated EPS was Tk. 0.69 for January-June 2024 as against Tk. 1.47 for the same period last year. EPS  was Tk 0.80 paisa during the same period last year. Consolidated NAV per share was Tk. 16.60 as of June 30, 2024.

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