BANGLADESH

Shares have again slid back into negative territory after a one-day rise triggered by measures of the central bank and the capital market regulator to lift the sagging market.

Share prices of the country's two bourses were erratic on Tuesday before they closed lower.

Stakeholders, however, are sanguine about the market bouncing back 'soon'.

The Dhaka Stock Exchange (DSE) general index rose 67.73 points or 1.5 percent to 5908.93 points in the first half-an-hour of trading and gained over 32 points more in the next half an hour.

The index then lost over 50 points in the subsequent hour to drop to 5890.33 points around 1:21pm and finally closed at 5809.56 losing 31.63 points or 0.54 percent.

On the Chittagong Stock Exchange (CSE), the selective categories index (CSCX) gained 132.09 points or 1.24 percent to hit 10712.83 at 11:37am.

It gained over 20 points more to 10734.01 points around 1:31pm but lost 23.50 points or 0.22 percent to close at 10557.23.

On Monday, share prices on both the stock exchanges were up after the Bangladesh Bank extended time for commercial banks to adjust its single borrower exposure limit by another year, in an effort to prop up the market.

The DSE general index rose 40 points to 5,841 and CSCX 52 points to 10,580.

DSE president Md Shakil Rizvi told bdnews24.com: "Many bought shares after seeing the uptrend in the opening session. Selling pressure rose towards the end as they adjusted their investment. As a result, the index dropped slightly."

On Tuesday, the turnover on DSE stood at Tk 3.37 billion, Tk 360 million less than that of Monday. CSE turnover, however, rose Tk 50 million to Tk 436 million.

Of the 269 issues traded on DSE, 73 advanced, 176 lost and 10 remained unchanged while of the 185 issues traded on the CSE, 77 gained, 96 lost and 12 remained unchanged.

Bangladesh Merchant Bankers Association (BMBA) president Mohammad A Hafiz said: "The lack of [investors'] confidence is evident. The market has been fluctuating for some days. The investors are wary because of this."

Varying statements by the policymakers also have negative impact on the market, he observed and hoped that the market would be better soon.

Asked whether the merchant banks would raise amount of loans now that they have more time to adjust single-party exposure, Hafiz said: "The banks will take the decision. It will take time after raising the flow of loans."

Commenting on the uptrend in the first hour, DSE senior vice-president Ahsanul Islam earlier told bdnews24.com: "The fear that had been in investors' mind seems to have gone away. But I'm not on the side of being more enterprising."

He suggested buying shares with good fundamentals.

Bangladesh Bank's executive director S K Shur Chowdhury told bdnews24.com on Monday that the banks with merchant banking operations would now have until Dec 31, 2012 to bring down their exposure to the allowable limit.

Earlier, on Thursday the Securities and Stock Exchange (SEC) suspended sectoral and individual investment ceilings for mutual funds until Dec 31, 2011 to ease the liquidity crisis in the market.

Before the SEC move, a mutual fund could not invest more than 10 percent of its fund in a single company or more than 25 percent in a single sector.

The stock market regulator on Saturday announced its decision to keep the face value of each share at Tk 10 effective from Dec 4.