Investors allowed to avail of credit facilities as per existing margin ratio
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Investors will be allowed to avail credit facilities as per the existing margin ratio until the broad index of the premier bourse exists below 8000 points.
The Bangladesh Securities and Exchange Commission (BSEC) has kept the existing highest margin loan ratio unchanged taking into account the ongoing pandemics situation.
As a result, stockbrokers will be allowed to disburse margin loan at a ratio of 1:0.8 meaning that an investor will get Tk 80 as a margin loan against his/her investment worth Tk 100 until the DSEX, broad index of Dhaka Stock Exchange (DSE), exists below 8000 points.
And the margin loan ratio will be 1:0.5 if the DSEX crosses 8001 or above.
The securities regulator made the announcement of fresh range of broad index for availing margin loan facilities on Friday night amid rallies recently observed in the market.
As per the previous directive issued on April 4, 2021 investors were allowed to avail margin loan facilities at a ratio of 1:0.8 until the DSEX remains below 7000 points. And the lower loan ratio was 1:0.5 if the DSEX crosses 7001 point or above.
The DSEX on Thursday closed at 6699 points on the premier bourse DSE after the market displayed continuous upward trend in recent sessions.
Asked about the reason of keeping the margin loan ratio unchanged amid the upward trend, the BSEC's spokesperson Mohammad Rezaul Karim said the decision was taken to facilitate the growth of the market.
"Presently, the market is featuring a good turnover. The regulator has kept the margin loan facility unchanged so that the turnover is not affected after the index crosses 7000 points," Mr. Karim said.
The DSE featured a turnover above Tk 20 billion for last sessions in a row following investors' increased participations.
Meanwhile, the premier bourse DSE Monday posted new records in six market parameters, including all indices, riding on an increased participation of buoyant investors.
On Monday, the DSE settled at 6,628, the highest since its inception more than eight years back in 2013, with a rise of 0.48 per cent or 32.06 points.
On the day, the DSE also hit fresh records in market capitalisation, trade volume and total number of trades.
The turnover hit more than 10-year high of Tk 29.39 billion on Monday. It was also the second highest turnover in the DSE's history. The all-time high turnover on the DSE was Tk 32.49 billion recorded on December 5, 2010.
Bangladesh Bank (BB) issued a directive on Thursday regarding submission of banks' investments, made in the stock market, on day to day basis.
Asked, whether the BSEC issued the directive regarding keeping the margin loan facilities unchanged following the BB's directive the BSEC's spokesperson Mr. Karim said there is no relation between the directives.
"The BSEC's decision was taken before the central bank's directive. The securities regulator has issued the directive regarding fresh margin loan ratios considering the long term growth of the stock market," Mr. Karim added.