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Institutions start buying shares after 'govt directives'
Institutional investors went for purchasing a significant volume of shares amid a steep fall of prices Wednesday, following an instruction from the government's upper level, and eventually the market ended the day's session with gain, sources said.
The market insiders confirmed that an instruction of purchasing shares came from the Ministry of Finance (MoF) during the trading when the benchmark DSE General Index (DGEN) lost about 148 points at 12.30 pm.
At the end of day's trading session the DGEN gained 88.70 points to close at 4077.70, and daily turnover also increased by 8.64 per cent to Tk 2.01 billion. The DGEN went down below the 4000-mark Tuesday following sharp fall of share prices.
The sources said the MoF called some key people to attend an urgent meeting to ensure the institutional investors' participation in the market.
Bank and Financial Institution Division Secretary Shafiqur Rahman Patwari chaired the meeting at the secretariat.
"In the meeting we have taken some measures for ensuring the institutional investors' participation to contain the continuous falling trend of the market," a participant of the meeting told the FE.
He hoped that the market would see a positive impact of the measures taken Wednesday.
When asked whether the market Wednesday bounced back following the immediate reaction of the meeting, he said, "I think it happened due to a positive impact of the meeting."
Another source said the institutional investors may face music, if they do not play their due roles in stabilising the market.
Some of the institutional investors also confessed that the market bounced back mainly due to instructions that came from the high authority of the government.
"Buying pressure was seen during the trading session Wednesday, as the institutional investors went for purchasing shares," a merchant banker told the FE.
He said the institutions, including the Investment Corporation of Bangladesh (ICB), purchased shares following the government directives.
Another official of a state-owned merchant bank said they received an instruction Wednesday to purchase shares.
"The market bounced back mainly due to institutional investors' buying spree. The ICB purchased a significant number of shares," he said.
When asked, ICB Managing Director Md. Fayekuzzaman said his institution continued to play its due role to bring back stability in the market.
"We will continue our positive role, so that the market gets back to a stable position," he told the FE.
[ First Page ] 2012-07-12