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Thursday, March 19, 2009

Investors, brokers see bias in DSE move

Investors and brokers, angered by the bourse's decision to halt trade of Aftab Automobiles and Eastern Housing shares, have alleged that the DSE's move is discriminatory in monitoring trade practices.

Even though the trade of Eastern Housing shares resumed yesterday, the trade of Aftab Automobile shares did not.

The Dhaka Stock Exchange (DSE) management halted the trade of the two companies on Tuesday for a market probe, in response to unusual price jumps of shares.

The share prices of several companies soared more than Aftab and Eastern, but the DSE overlooked those, aggrieved investors and brokers said.

“It's a biased decision,” said a broker.

The prices of each Beximco Synthetics share almost doubled in just five days, while the prices of Bangladesh Welding Electrodes (BD Welding), Kay&Que and Olympic Industries shares soared by more than 100 percent in the last two and a half months, he cited.

“But the DSE management did not halt trade of those issues,” he said.

The DSE management however denied any bias in monitoring trade. “We did it to make a market probe,” said AFM Shariful Islam, chief executive officer of DSE.

Asked why they did not take steps against shares whose prices doubled or trebled in the last two and a half months, he replied, “We are observing the price movement of those issues.”

In response to an inquiry regarding the factors, the DSE might have considered before halting the trade of Aftab and Eastern shares, the CEO said, “The price hike was one factor.”

He however did not disclose the other reasons, saying, “We will disclose the other factors after the inquiry."

An investor, nicknamed Mannan, said the DSE management could not present any valid reason to explain the suspension of trade of the two companies.

“The DSE was pressurised to take the decision by some member of the board of directors, who would benefit from the halt,” he alleged.

“If the DSE gave the same treatment to the other scrips, whose prices rocketed, then we would not raise any allegations,” he said.

Denying the allegations, DSE President Rakibur Rahman said the Board of Directors has no influence over management.

Meanwhile, Aftab Automobiles, in response to the DSE probe, said they do not have any undisclosed material, decision or information relating to the company's operation or profitability that might have an impact on the price and volume of their shares traded in the stock exchange.

The company however said they are exploring possibilities of BMRE of their assembling and body building units and fund raising thereto. The exploration is at a preliminary stage, it said.

Eastern Housing said they do not have any undisclosed materials, facts, decisions, or information relating to the company's operations and profitability that may influence share prices.

The Daily Star



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