Stocks
Despite Dividends Declarations, DSE-SME stocks dropping since Oct
DSE: Dhaka Stock Exchange SME board (Small & Medium Enterprises) dropped since the first week of October, driving down the index by 23 percent or 373 points to 1,277.
The decline coincided with the corporate disclosures informing investors of the companies’ remarkable growth in earnings that inspired good dividends.
12 of the 15 companies listed with the board declared 5-15 per cent cash dividend for the year ended in June this year. The disclosures came from early October but they largely failed to bring any positive outcome for stocks.
Except for Yousuf Flour Mills and Star Adhesives, 10 companies have seen their share price fall by 15-42 percent.
Star Adhesives inched up while Yousuf Flour shot up by 110 times to close at Tk 2,884 on Sunday (18 December) The latter jumped 22 times on November 13 alone after the dividend declaration when the circuit breaker was not applicable for the particular listed company.
Market insiders said the persisting downward trend of the main market and frequent policy changes by the Bangladesh Securities and Exchange Commission (BSEC) for the SME board were the reasons behind the bearish trend of the board.
The stock market overall has been going through a tough time due to adversities on the macroeconomic front, said Mostaque Ahmed Sadeque, former president of the DSE Brokers Association of Bangladesh. “The SME market is not an exception.”
Moreover, policy changes by the regulator confused investors, bringing down their participation in the SME market, he added.
The index soared 1042 points or 172 percent in the 10 months through October 2 before the disclosures.
The SME market was introduced to facilitate the growth of small companies that face hurdles while trying to avail bank loans.
Trading on the prime bourse’s SME board started on September 30 last year to open up opportunities for SMEs to raise capital from the stock market. The free-float base index was 1000 points.
Prior, the BSEC did not allow general investors to trade on the SME platform without prior permission considering the high ‘risk’ posed by small-cap firms. An investment of at least Tk 5 million was needed at the time to be a qualified investor (QI) to trade on the SME platform.
Due to low response from investors, stocks sank pushing the index down below 600 points within five months from early February this year.
A complex registration process and the high minimum investment requirement kept investors away.
To overcome the roadblock, the securities regulator on February 17 cut down the investment requirement to Tk 2 million in listed securities on the SME board. The BSEC also removed the mandatory registration requirement, saying registration would complete automatically if an investor met the criterion.
All these developments triggered a turnaround of the index and it soared by 304 percent, or 1689 points, to 2,244 points, the highest, between March 3 and August 11.
Hence, the regulator did not stick to its stance for criticisms by market analysts that easy access had led to the overpricing of SME stocks.
In September, the BSEC revised the minimum investment to Tk 3 million from Tk 2 million for trading on the SME board.
The regulator in its September 21 directive also said that if the minimum criterion was not met, investors would have to leave the board by selling off their securities. But a High Court stay order on November 16 kept the matter hanging.
in the meantime, Yousuf Flour has been flying high abnormally, sounding an alarm. The DSE served a show-cause notice to the company, seeking an explanation.
The company returned a knee-jerk response last week, saying there was no undisclosed price-sensitive information.
Another listed company, Bengal Biscuits declared a 5 percent stock dividend for the year ended in June, but that was rejected by the BSEC on the ground that the regulator’s approval was mandatory before issuing stock dividends in the first three years after the listing.
Apex Weaving and Finishing Mills declared no dividend while Wonderland Toys is yet to make any disclosure.
Bengal Biscuits’ share price dropped 15 percent, Wonderland Toys fell 14 percent and Apex Weaving 1.70 percent since October 2.
Trading of Himadri Ltd has remained suspended since June 29 this year.
Asif Mahmood, Chairman of ADN Telecom Ltd., extends a warm welcome to Shibli Rubayat-Ul-Islam, Chairman of the Bangladesh Securities and Exchange Commission (BSEC), on his reappointment.
Md. Maruf, serving as an Independent Director at ADN Telecom Ltd., and Md. Mostafijur Rahman, Assistant Manager at ADN Telecom Ltd., were also in attendance at the event. This occasion served as an opportunity for industry leaders to express their support for Shibli Rubayat-Ul-Islam’s continued leadership at the BSEC, highlighting his contributions to the regulatory landscape of Bangladesh’s securities market.
Furthermore, Asif Mahmood emphasized the importance of stability and continuity in regulatory leadership for fostering investor confidence and promoting sustainable growth in the securities sector. He expressed optimism about the future initiatives under Shibli Rubayat-Ul-Islam’s guidance, aimed at further strengthening the country’s capital markets.
The reappointment of Shibli Rubayat Ul Islam as Chairman of BSEC comes at a critical juncture, as Bangladesh’s securities market continues to evolve and expand, with increasing participation from domestic and international investors.
Dhaka Stock Exchange DSE, Bourse on the first working day of the week, 12th May, ended with a drop in Indices and hike in Turnover from the previous working session. This information is known from DSE sources.
985 crore 88 lakh taka shares were traded on this day. 74 crore 50 lakh more tradings were done in DSE today compared to the previous workday, 9th May , Shares worth Tk 911 crores 37 lakh shares were traded last time, Thursday.
The benchmark DSEX added 35.67 points or 5,696 The Shariah-based index DSES gained 7.89 points or 1,250, and the blue-chip index DS30 increased by 11.36 points or 2,026.
Of the issues traded, 93 advanced, 258 declined and 41 remained unchanged.
Padma Life Insurance Limited ranked top gainer on DSE, the share price increased by Tk 2.50 paisa or 10 percent. On this day, the share was last traded at Tk 27.50 paisa. Also Trust Islami Life Insurance ranked top gainer on DSE, the share price increased by Tk 4.40 paisa or 10 percent. On this day, the share was last traded at Tk 48.40 paisa
GQ Ballpen Industries Limited ranked top loser on the DSE, the share price dropped by Tk 4.3 paisa or 2.99 percent. On this day, the share was last traded at Tk 139.20 paisa.
DSE topped on trade is Asiatic Laboratories Limited 47 crore 6 lakh takas of company shares have been traded.
A total of 47 companies’ shares were traded in the Block on Dhaka Stock Exchange. A total of 66 lakh 66 thousand 55 shares of the companies were traded. The financial value of which is 41 crore 29 lakh taka
The Dhaka Stock Exchange (DSE) and the DSE Brokers Association (DBA) have expressed gratitude towards Prime Minister Sheikh Hasina for her directive to list government companies in the capital market, a move hailed as timely and positive.
The directive was issued during the recent meeting of the Executive Committee of the National Economic Council (Ecnec) last Thursday.
Dr. Hafiz Muhammad Hasan Babu, Chairman of DSE, described the directive as a significant step towards enhancing the dynamics of the capital market. He emphasized that besides invigorating the capital market, this move would also attract foreign investment and promote sustainable development.
Despite previous efforts, government institutions had not been listed in the stock exchange, according to a notification issued by the DSE. The Prime Minister’s directive is seen as a pivotal step towards revitalizing and expanding the economy.
Dr. Babu further remarked, “The listing of reputable companies in the capital market, as directed by the Prime Minister, will greatly benefit the country’s economy. It will also enhance investor confidence.”
Similarly, the DBA released a notification applauding the Prime Minister’s directive, terming it as positive and timely for the capital market.
Saiful Islam, President of DBA, expressed optimism about the directive’s potential to accelerate the country’s capital market and overall economy. He pledged support to relevant government departments and regulatory bodies in implementing the directive, ensuring its positive impact on the economy, including the capital market.
