Robi among 11 cos to have lost blue-chip status for illiquidity

As many as 11 companies, including the second largest telecom operator Robi Axiata, have been dropped from the DS30 index after they endured a steep, persistent fall in transaction volumes for months.

Daily average turnover volumes worth less than Tk 5 million in the three months to June 30 is one of the reasons for the exclusion of the stocks from the index, according to the Dhaka Stock Exchange (DSE) that disclosed the rebalancing of the index on Thursday.

Of the companies, Robi, United Power Generation & Distribution Company (UPDGC), TITAS Gas, and Power Grid are among the top 20 companies in terms of market value.

The companies have lost the status "mainly because of very low turnover on the back of liquidity crisis," said a DSE official preferring not to be named.

A blue chip is considered a recognised, fundamentally-strong company, with a well-established brand value, to have in a portfolio.

Due to the price movement restriction, the companies have remained stagnant in the stock market with buyers reluctant to inject money into the stocks even at floor prices.

The 11 companies of the blue-chip index have been replaced by 11 others including Eastern Bank, Heidelberg Cement,

and Sonali Paper & Board Mills.

The premier bourse rebalances its indices twice a year based on the criteria set.

A stock must have a minimum three-month daily average traded volume of Tk 5 million up to the reference date to stay in the index.

It must have a float-adjusted market value surpassing Tk 500 million as of the reference date. And the stock must have reported positive net income over the 12 months to the reference date.

The stocks, newly included in the blue-chip index, have shown swings on the bourse, driven by investors' increased participation.

They have climbed up the floor price for higher demand on the trading floor.

For example, Heidelberg Cement went above the floor price on April 24 and has traded at prices higher than that since then.

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