RSS Feed (xml)
market, a separate trading floor to be used for companies once
de-listed from the normal trading floor, on September 6, said Saiful
Islam, senior vice-president of the bourse. 'After opening the OTC
market, companies will be listed with the market for trading of their
shares after being de-listed from the normal market,' he told New Age
on Tuesday. He said the bourse would de-list non- performing and
non-operational companies. Which listed companies will face the music
is yet to be decided, he said. 'The OTC market will be introduced
at the DSE in accordance with the SEC rules in this connection,'
Saiful said adding 'We are working to have an effective OTC market.'
The Securities and Exchange Commission, stock market regulatory
body, introduced OTC rules in 2001. In July of 2004 the Chittagong
Stock Exchange introduced the OTC market with which four companies,
de-listed from the CSE, are listed. But no trading was held in the
market since its inception, said CSE sources. On June 1, the SEC
asked the Dhaka and Chittagong stock exchanges to prepare a mode of
operation for an effective OTC market for junk shares' trading.
The SEC's instruction came after the DSE had initiated a move to
segregate junk shares aiming to place them into a separate trading
floor instead of normal market. On July 12, the DSE decided that in a
bid to facilitate junk share trading it would set up an OTC market.
Under the OTC system, a separate trading floor will be opened where
interested buyers and sellers of shares of non-performing and
under-performing companies will announce prices and numbers of shares
to be traded. Transaction will take place on the OTC market if the
announced prices of buyers and sellers match. DSE sources said
trading of such companies would take place on the OTC market, meaning
price movement of those shares would not be seen on the electronic
board. The sources said the bourse had no plan to place all the
'Z' category shares into the OTC market but non-operational and
non-performing ones. Out of more than 90 companies now listed
under the 'Z' category, traces of many are not found, while some have
gone out of operations. But trading of shares of those companies is
taking place nonetheless, as many retail investors are unaware of the
companies' present status, according to SEC and DSE sources. From
early July the SEC kept halted the trading of the shares of more than
30 low profile companies.
