DSE sees negative growth in 2005
The Dhaka Stock Exchange (DSE) witnessed a negative growth in 2005 as the year's trading closed Thursday with a bearish note, reports UNB.
DSE chief executive criticised government policies for the downtrend while chairman of the regulatory authority SEC claimed the policies posed no hindrances.
The DSE registered a 16 per cent negative growth on the basis of calculation of General Index for the A and B category shares as the year's DGEN closed at 1677.35 points Thursday against 1999.71 on the first day of the year.
On the basis of DSE all share price index introduced end March this year, the market went down by 15 per cent to close at 1275 down from 1500.5.
Most Blue chip shares lost during the year as the DSE-20 index shed 26 per cent from 2177 to close at 1609 points.
DSE chief executive officer Salahuddin Ahmed Khan, however, said the market was almost static with ups and downs within certain range.
"Recent banking policy and increased benefits from investment on the savings certificates have had negative impact on the capital market," he said.
Bangladesh Bank recently increased the rate of Cash Reserve Requirement (CRR) of the commercial banks by two per cent in a bid to curb inflation while the government significantly (1.5 per cent) increased the interest rate on savings certificates to attract and mobilise funds for government borrowing.
"These two decisions of the government hampered the investment in the capital market," said the DSE CEO, adding that the people found investment in savings certificate more lucrative than in the capital market.
SEC chairman Dr Mirza Azizul Islam, however, said: "The market behaved well no big ups and downs… highest number of IPO came and highest number of company listed this year."
About the quick fall of the market, he said it was necessary for the market correction as the market was clearly over heated. "We took strict measures to control the market at that time."
About the government decision on the Savings Certificates, he said: "There is enough liquidity in the market now, the government policy did not affect the market in the last part of the year."
"The savings rates might have an impact on the capital market, but not much," Bangladesh Bank Governor Dr Salehuddin Ahmed told UNB Thursday.
He said the market needs good shares to attract people for investment. The major companies, however, are not interested to come in.