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.

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BSRM's billet plant goes into operation by August

BSRM Group, a leader in iron and steel manufacturing in Bangladesh, is setting up a high quality billet making plant in Chittagong to ensure a steady supply of quality billets for its rolling mills, senior officials said.

The construction of the new plant, BSRM Iron & Steel Company Ltd (BISCO), claimed to be the largest billet-manufacturing unit, is progressing fast. It is expected to start its commercial operation from August this year.

BISCO's estimated cost will be Tk 1.946 billion, of which Tk 1.362 will be provided by several financiers.

“We signed a syndicated term loan facility for the Tk 1.362 billion with 14 financial institutions on Tuesday,” said Aameir Alihussain, director of BSRM Group.

Industrial and Infrastructure Development Finance Company (IIDFC) is the lead arranger of the syndicated term loan. Representatives from the participating banks and BSRM signed the loan agreements.

Alihussain Akberali, chairman of BISCO, M Matiul Islam, chairman of IIDFC, Asaduzzaman Khan, managing director, SA Farooqui, managing director of Standard Bank, Erfanuddin Ahmed, president and managing director of Bank Asia, M Shahidul Islam, deputy managing director of United Commercial Bank, Rakibur Rahman, president of Dhaka Stock Exchange, and AB Siddique, CEO of Chittagong Stock Exchange, were present at the signing ceremony.

“The production capacity of the new plant will be around 1.50 lakh tonnes billet per year. The full output of the plant will be consumed by BSRM Steels Limited, an entity of our group,” Aameir Alihussain said, revealing another plan to set up a 1.50 tonne capacity billet making plant after setting up the ongoing plant.

The BSRM Group set up a captive billet making plant in 1996.

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