SEC bans share sale by sponsors
Sponsors of big cap companies seek to buy their own firms' shares
Apart from sponsors and directors, any shareholder owning 5 percent or more stocks in any listed company cannot sell his or her holdings either, until further notice, the SEC said.
“The commission passed the order considering the investors' interest and capital market development,” said Saifur Rahman, the spokesman and an executive director of the SEC.
“The order shall have immediate effect and would continue until further instruction.”
He said the matter of selling shares by sponsor directors were discussed in meetings with market stakeholders last week. “The stakeholders pointed out that sponsors or directors were selling their own companies' shares even amid a downward trend in the market,” he said.
It also appeared to the commission that sponsors and directors of many companies are selling shares in their own firms, he added.
The regulator's latest move came after the stockmarket yesterday suffered a steep fall in prices, in continuation of a month-long bearish trend. The key index of the Dhaka Stock Exchange yesterday plunged 2.75 percent to 5,649 points.
The stockmarket regulator and the central bank took several positive measures this month to rejuvenate the capital market and to boost the investors' confidence, but all the steps failed to put expected impact on the market. Rather, the falling trend is deepening by the day.
In another development, Salman F Rahman, president of Bangladesh Association of Publicly Listed Companies (BAPLC), said sponsors of big cap companies want to support the market by purchasing their own firms' shares from the market.
“The market has come to such a level that we want to support our own companies' shares,” he said, adding that he has already talked with sponsors of seven to eight big cap companies and they all have agreed to buy their own firms' shares.
“There are some minor regulatory problems in doing so. But, I have discussed the issues with the SEC and hope the problems will be solved soon,” he said.