Staff Reporter : There have been allegations that illegal margin loans have played a role in the abnormal rise in prices of small capital companies in the capital market. By law, lending to customers to buy shares of a company with a PE ratio of 40 or more is prohibited.
But there are allegations that some brokerage houses and merchant banks are offering these loans to their preferred customers. In the wake of the allegations, the Bangladesh Securities and Exchange Commission (BSEC) has directed the Dhaka Stock Exchange (DSE) to look into the matter.
The BSEC said it had sent the letter to the DSE on Wednesday, September 6.
In this regard, BSEC Executive Director and Spokesperson Mohammad Rezaul Karim said that most of the small capital companies have weak fundamentals. Even then, the share prices of these companies have continued to rise. The DSE has been asked to look into whether there is anything unusual behind the price hike. Besides, it has been asked to check whether margin loan is being given to the shares of these companies.
Source: Daily StockBangladesh by www.dailystockbangladesh.com.
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