Stocks skyrocket on rumourStaff Correspondent
Dhaka stocks skyrocketed on Tuesday as investors became optimistic following a rumour that the Securities and Exchange Commission might extend the deadline for listed company directors to comply with the mandatory shareholding rule.
DGEN, the benchmark general index of Dhaka Stock Exchange, gained 3.14 per cent or 134.05 points, to close at 4,400.73 points.
The day’s turnover increased to Tk 162.18 crore from that of Tk 142.81 crore on the day before.
Market operators said a rumour spread in the market on Tuesday morning that the SEC would announce a time extension for complying with mandatory shareholding rule.
Investors banked on the rumour and went for buying shares as the SEC was scheduled for a meeting on the day, they said.
They also said as the SEC won two legal battles that validated 2 per cent mandatory shareholding rule, it might now announce the next steps which would favour the company directors.
‘As the first verdict came on 21 May, the last day to comply with the rule, many investors and other stakeholders in the market expected SEC to extend the time,’ said a stockbroker.
The SEC meeting started at 11am on Tuesday at the commission’s board room with a number of agendas including time extension for the company directors to comply with the mandatory shareholding rule.
The commission meeting ended at 2pm and the SEC, after the trading hours, announced that it would not extend the time.
After the announcement market operators said the impact of the SEC decision would be seen today which perhaps would not be positive.
‘Investors would be disappointed. They thought if SEC extended time, the directors would buy shares from the market which would push up the share prices when they could sell shares at high prices,’ said a stockbroker.
The SEC on November 22 issued a notification that made mandatory for listed company directors to hold 2 per cent shares individually and 30 per cent jointly in their respective companies.
In the same notice, the SEC had also set a six-month time to comply with the rule, saying that if any director failed to comply in time, his/her post would be vacant automatically.
Of the 268 traded issues, 253 advanced, nine declined and six remained unchanged.
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