15 banks among 83 stocks slip from DSEX
16 new companies being inducted into the list after rebalancing
The Dhaka Stock Exchange (DSE) has removed 15 banks along with 68 other companies from its broad index DSEX as the firms failed to comply with the requirements of the country's premier bourse.
The index rebalancing will come into effect on Sunday, inducting 16 new companies as DSEX members. After this, the total number of DSEX members will stand at 250, according to DSE.
DSE officials said most of the dropped companies had sufficient market capitalisation to continue their membership, but they failed to fulfil the stock trading or turnover criterion as asked by the DSE index methodology because of the floor price.
Keep updated, follow The Business Standard's Google news channel
According to the Bangladesh Index Methodology of DSE, designed and developed by S&P Dow Jones Indices a decade ago, companies must have a free-float market capitalisation of Tk10 crore to become a DSEX member.
The market capitalisation can drop to as low as Tk7 crore for an existing member that fulfils other criteria.
The newly included companies are Legacy Footwear, Daffodil Computers, Tosrifa Industries, Imam Button Industries, Zaheen Spinning, United Insurance, Meghna Pet Industries, Renwick Jajneswar, Zeal Bangla Sugar, Meghna Condensed Milk, Navana Pharmaceuticals, Midland Bank, Libra Infusions, Trust Islami Life, Islami Commercial Insurance and Chartered Life Insurance Company Ltd.
After semi-annual rebalancing, six new companies are being included in the DS30 index, while six others are being dropped from the list from Sunday.
Besides, after annual rebalancing, three new companies are being included in the DSMEX, but no companies are being dropped from it.
Therefore, the total number of DSMEX members now stands at 16, which will be effective from the next working day.
Free-float market capitalisation refers to the market value of the company stake that needs no prior announcement to be sold in the market. Sponsor-directors and any other shareholders with more than 10% company stake need prior announcement of their buy-sell intention in the company shares. The shares held by others are free-float ones by nature.
The other criteria to stay in the DSEX include minimum trading of company shares over the six months before the rebalancing date. Daily average trading turnover must be at least Tk10 lakh, while it can go down as low as Tk7 lakh for existing members that fulfil other criteria.
The third eligibility criterion for the DSEX membership is that the shares must be traded on for at least half of the each normal trading days in the past three months.
