SME index falls as rules tightened

The index of the SME board in Dhaka Stock Exchange (DSE) dropped over 5 per cent yesterday after the Bangladesh Securities and Exchange Commission (BSEC) tightened one condition for trading shares on the board. 

The BSEC decided to tighten the requirements on Wednesday following criticisms that easy access had let to the overvaluation of the market index.

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Any investor registered with the stock exchanges' electronic subscription system and maintaining a minimum investment of Tk 30 lakh in listed stocks will be allowed to trade on the SME board, according to the BSEC's new decision.

Initially, the eligibility hinged on being registered and having an investment of at least Tk 50 lakh.

In February, the BSEC eased the conditions, reducing the investment requirement to Tk 20 lakh and withdrawing the necessity to get registered.

After that, the SME index soared 51 per cent, or 696 points, in the last one month.

Meanwhile, the DSEX, the key index of the DSE, dropped 1.83 per cent, or 119 points, in the last one month. The DS-30, the blue-chip index representing reputed companies, plunged 2.54 per cent, or 60 points.

Against this perspective, the BSEC decided to slightly tighten investment requirements.

The index dropped 96 points or 5.28 per cent to 1,720 yesterday.