SEC to stop stock rumours

The stock market regulator will take action against those who spread
rumours in the market to make it unstable, the top boss of the watchdog
said yesterday. "There might have some rumour-based trading with some risks,
but that should not be reckless," said Ziaul Haque Khondker, chairman of
Securities and Exchange Commission (SEC). He was addressing the inauguration
of a daylong training programme for journalists, who are currently involved
in capital market reporting. Capital Market Journalists' Forum ( CMJF) and
Dhaka Stock Exchange jointly organised the programme at the DSE training
academy in the city. Some 40 journalists from newspapers, electronic media
and news agencies participated in the programme. It was the first session
of a six-month-long training programme. Unscrupulous investors often spread
rumours and make the market unstable that harms the general investors.
The SEC chief said the depth of the market is increasing gradually with the
market capitalisation to GDP ratio reaching over 20 percent and having
some 20 lakh beneficiary owners' (BO) accounts. He said successful
monitoring of all banks' stock portfolios by the central bank will help
keep the market sound. "What the central bank is doing, as part of its
monitoring activities, is a timely step, as the banks contribute about 40
percent of the total capitalisation in the stock market," Khondker said.
The central bank recently through a directive asked all banks to submit a
monthly report on their stock portfolio. Khondker also said the commission
is considering measures to introduce rating or grading system to rank the
mutual funds' performance so the investors can get idea about the
strength of the funds. He also urged the journalists to write objective
and analytical news on stock market, saying: "Nowadays many investors are
influenced by your reporting and make their investment decisions
considering these reports." DSE President Rakibur Rahman and CMJF President
Ziaur Rahman also spoke at the inauguration. Salahuddin Ahmed Khan,
professor of finance at Dhaka University and former chief executive
officer of DSE, delivered a lecture on 'Capital Market', while Farhad
Ahmed, executive director of SEC, spoke on 'IPO Procedure: Book Building
Method and Direct Listing', and Mohammad Abdul Hannan Zoarder, executive
director of SEC, delivered lecture on 'Regulatory Framework of SEC'.