Stocks
Asia Stocks Rise Amid Focus on US Inflation Data
Equities mostly climbed in Asia on Wednesday after a subdued day on Wall Street, as investors focused on the imminent release of crucial US inflation data, which could significantly impact interest rate expectations.
Following last week’s robust jobs report, indicating a resilient economy, there’s apprehension on trading floors that a third consecutive overshoot in consumer prices might prompt the Federal Reserve to postpone rate cuts.
“The consumer price index is the critical number this week,” remarked Andrew Brenner of NatAlliance Securities. “The fear is that CPI has continued to be a thorn in the side of the Fed.”
He noted that market sentiment is strongly bearish.
Expectations for rate cuts this year have diminished from six at the year’s onset to possibly three, with some even considering zero. However, some argue that no rate cuts could be the price for sustained economic health and robust earnings.
Atlanta Fed chief Raphael Bostic struck a pragmatic tone on Tuesday when discussing the bank’s strategy. While reiterating a forecast of one reduction this year, he remained open to reassessment based on incoming data.
Responding to inquiries about the possibility of maintaining rates unchanged all year, he stated, “I do think the risks are balanced, and given that the US economy has been so robust and resilient… I can’t rule out the possibility that rate cuts may need to be postponed further.”
However, he also acknowledged, “if I started to receive different signals suggesting potential labor market distress, then I’d consider altering our policy stance and possibly cutting rates sooner.”
Krishna Guha at Evercore maintained optimism ahead of the CPI reading, suggesting that “the odds are the data will come in good enough to proceed.”
On Wall Street, the S&P 500 and Nasdaq registered modest gains, while the Dow dipped marginally.
In early Asian trading, Hong Kong surged over one percent, with Sydney, Taipei, and Wellington also in positive territory, although Shanghai edged lower.
Tokyo experienced declines as a stronger yen weighed on exporters. The currency strengthened against the dollar following less-dovish comments from Bank of Japan chief Kazuo Ueda.
The yen’s exchange rate, particularly against the dollar, has been closely monitored, with many observers identifying 152 yen per dollar as a threshold prompting authorities to intervene to support the Japanese currency.
Last month, the central bank raised interest rates for the first time since 2007, as inflation remains significantly above officials’ target, fueling speculation about future moves.
Addressing lawmakers on Tuesday, Ueda noted, “We must consider scaling back monetary easing if the underlying price trend aligns with our outlook.”
Dhaka Stock Exchange DSE, Bourse on the third working day of the week, 21th May, ended with a drop in Indices and gain in Turnover from the previous working session. This information is known from DSE sources.
591 crore 62 lakh taka shares were traded on this day. 152 crore 2 lakh more tradings were done in DSE today compared to the previous workday, 19th May , Shares worth Tk 561 crores 21 lakh shares were traded last time, Sunday
The benchmark DSEX lost 22.55 points or 5,371 The Shariah-based index DSES dropped 6.19 points or 1,174, and the blue-chip index DS30 decreased by 8.95 points or 1,929.
Of the issues traded, 102 advanced, 235 declined and 56 remained unchanged.
Prime Bank 1st ICB AMCL Mutual Fund ranked top gainer on DSE, the share price increased by Tk 0.30 paisa or 5.08 percent. On this day, the share was last traded at Tk 6.20 paisa.
Sikder Insurance Company Limited ranked top loser on the DSE, the share price dropped by Tk 0.90 paisa or 3.00 percent. On this day, the share was last traded at Tk 29.10 paisa.
DSE topped on trade is Orion Pharma Limited 43 crore 67 lakh takas of company shares have been traded.
A total of 39 companies’ shares were traded in the Block on Dhaka Stock Exchange. A total of 83 lakh 47 thousand 709 shares of the companies were traded. The financial value of which is 70 crore 48 lakh taka
The Bangladesh Securities and Exchange Commission (BSEC), the regulatory authority for the stock market, has issued new guidelines for transferring listed companies to the Z category for non-compliance. From July 2, any listed company that violates specific conditions can be moved to the ‘Z’ category by the stock exchange.
On Monday (May 20), BSEC released these directives, outlining several conditions under which a company may be reclassified.
According to the guidelines, if a company fails to declare dividends for two consecutive years from the date of the last dividend declaration or from the date of listing on the stock exchange, it will be moved to the Z category. Additionally, failure to hold the annual general meeting (AGM) within the stipulated time as per law will result in the same action.
However, if an AGM is not held due to a court order or legal proceedings, this rule will not apply for up to two years, considering the extraordinary circumstances.
The guidelines also state that a company will be moved to the Z category if it ceases production for a continuous period of at least six months, except for periods allocated for restructuring or BMRE (Balancing, Modernization, Rehabilitation, and Expansion).
Furthermore, if the accumulated losses of a listed company exceed its paid-up capital, it will be transferred to the Z category.
Another condition includes failure to distribute at least 80% of the declared or approved dividends within the specified timeframe, leading to reclassification to the Z category by the stock exchange.
Trading of Z category shares will be settled on a T+3 basis.
These measures aim to ensure stricter compliance and maintain the integrity of the stock market.
The Bangladesh Securities and Exchange Commission (BSEC), the regulatory authority for the stock market, has issued new directives for the trading of shares of companies listed on the Alternative Trading Board (ATB).
On Monday (May 20), BSEC released the guidelines, stating that for the first trading day, the circuit breaker will be set at 5% above the fair value, as determined by Schedule A, Appendix 2 of the Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) regulations. If no trades occur within the first six months, the selling broker will initiate an offer based on a price set by the seller.
In cases where there are no trades, the seller can set any offer price, provided it does not exceed the fair value calculated under Schedule A, Appendix 2.
From the second transaction onward, the regular circuit breaker will be 5% above the previous day’s closing price or the open adjusted price.
Additionally, the value of shares traded on the ATB cannot exceed 30% above the fair value at any time.
All equity securities traded on the ATB platform will be settled on a T+4 basis.
A listed security issuer will not be eligible for listing on the ATB if the company has increased its paid-up capital by issuing bonus shares from retained earnings within the two years prior to the application date to the stock exchange.
Before and after listing on the ATB, the issuer’s most recent financial statements must be audited by a panel of auditors as declared by the stock exchange for ATB listing.
These directives override provisions of the Dhaka Stock Exchange (Alternative Trading Board) Regulation, 2022, and clauses (e), (f), and (g) of sub-regulation 9 of the Chittagong Stock Exchange (Alternative Trading Board) Regulations.
The new guidelines are effective immediately.
