SME index jumps 9% following High Court intervention

The SME index of the Dhaka Stock Exchange (DSE) jumped 9% on Thursday, a day after the High Court had stayed the condition to participate in trading SME shares and instructed the authorities to impose floor price on the SME board as in the main trading platform of the DSE.

On Wednesday, the High Court bench of Justice Md Ashfaqul Islam and Justice Md Suhrawardy issued the stay order for three months on the condition that the securities regulator determines the qualified investors, who have at least Tk30 lakh investment in the share market, for the trading SME shares.

The High Court bench also instructed the Bangladesh Securities and Exchange Commission (BSEC) to impose floor price on the SME board as in the main market of the stock exchanges.

Following the High Court order, investors participation increased in the DSE SME board, which helped to boost SME index DSMEX by 9% or 124 points to reach 1,484.

The turnover also jumped over the day by 337% to Tk12.16 crore as compared to the previous session.

DSE Acting Managing Director Shaifur Rahman Mazumdar told The Business Standard, "We have not received any official instruction from the securities regulator and the High Court yet. That is why we have not changed anything to run the SME board."

When asked, BSEC Spokesperson and Executive Director Rezaul Karim declined to make any comments over the sub-judice matter.

There are legal complications in complying with the High Court orders, because the definition and qualifications of a qualified investor are specified in the main law of the SME board and there is no mention of ordinary investors there.

Basically, as the risk is high in the SME board, there are opportunities for big investors, they added.

The apex court issued the stay order based on a writ filed by Advocate Mustafa Kamal, a Supreme Court lawyer, on behalf of Md Raju Hasan, a resident of the Dilkusha area in the capital.

Meanwhile, DSEX, the broad index of the Dhaka bourse, inched up by 0.2% or 12.6 points and settled at 6,266 points as against 6,253 points in the previous trading session.

The EBL Securities said in its daily market commentary that the market saw mixed performance, with investors active on both sides of the trading fence while buyers dominated the bourse by the end of the session. Investors reacted positively to the regulator's attempt to withdraw floor price restrictions in the block market, which has increased liquidation opportunities for large investors.

The Dhaka bourse also observed an increase in participation while the total turnover rose by 17.8% and stood at Tk552 crore.

On the day, the total transaction of Tk39 crore was held on the block market, where eight companies' shares traded below the floor price.

The port city bourse, Chittagong Stock Exchange, also settled on green terrain. The selected indices CSCX and All Share Price Index CASPI advanced by 11.4 and 18.1 points, respectively.