BSEC suspends 15 authorised traders for aggressive selling
More than half of the DSE scrips had no buyers yesterday
The Bangladesh Securities and Exchange Commission (BSEC) on Monday ordered the suspension of 15 authorised traders for aggressively selling off shares of several companies and thus creating panic among investors.
"Our surveillance found several brokerage firms engaging in the creation of abnormal sell pressure in some large-cap scrips. They put zero-price bulk orders that dragged down the stocks' price abnormally and that is why the commission ordered nine brokerage firms to suspend 15 of their traders," BSEC Executive Director Rezaul Karim told The Business Standard.
Authorised representatives or traders execute buy-sell orders at brokerage firms.
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Zero price orders refer to putting sell orders without asking any price intended to sell off at any available price and that in bulk volume is a violation of the codes for authorised representatives.
Of the 15 suspended traders, five worked for ICB Securities Trading, two for Rashid Investment Services and Shyamol Equity Management, and one each for brokerage firms Parkway Securities, Quayum Securities, Mercantile Bank Securities, TA Khan Securities, JKC Securities, and Kazi Equities.
Whoever is violating the trading rules and creating panic in the market would face the music, Rezaul Karim warned.
"We have got complaints that some traders are discouraging buyers to bid for available prices and encouraging sellers to go aggressive and thus artificially hurting the market," he added.
The BSEC on Monday took a hardline against trading rules violation in major large-cap scrips which contribute to the indices' movement more than the smaller-cap scrips.
The suspended traders were engaged in dragging the price of heavyweight stocks like Beximco Pharmaceuticals, Square Pharmaceuticals, LafargeHolcim Bangladesh, GreenDelta Insurance, Investment Corporation of Bangladesh, British American Tobacco, Olympic Industries and Beacon Pharmaceuticals.
The panic
As most of the stocks sharply fell on Monday, DSEX, the broad-based index of the Dhaka Stock Exchange (DSE), lost 72.5 points or 1.1%, to close at 6,482.
Amid the intensified panic, only 14 scrips advanced against the decline of 347, while prices of 19 remained unchanged on the DSE.
More intimidating for the investors, over half of the DSE scrips were lacking any bids from buyers at or above the bottom circuit breaker which the BSEC narrowed to 2% after the Ukraine war broke in late February.
Investors were deprived of selling opportunities in that situation.
Market insiders said aggressive sellers dragged the market down before the bidders stood up for healthy trading.
Analysts have been blaming both the tightening money market and an overall pessimistic outlook for the bearish trend in the stock market.
Amid buyers' caution, the narrowed bottom circuit and a slightly shortened trading hour in the month of Ramadan, the daily turnover on the DSE came down to under Tk500 crore, the lowest level in a year.
Some investors lost confidence in the market also because of the alleged manipulative attempts in several stocks during the last legs of market rallies that remained unpunished, said stockbrokers and analysts.
