BSEC extends margin benefits for good stocks

The Bangladesh Securities and Exchange Commission (BSEC) has extended margin benefits for good stocks in order to give a boost to the ailing shares.

Stockbrokers can now give margin loan for share purchase of a company with price earnings ratio of 50—higher than the earlier limit of 40—if the company meets two conditions, according to a BSEC directive issued today.

The company has to have a paid-up capital of over Tk 50 crore and it has to remain an A category stock for consecutive three years.

No margin loan will be allowed for companies with price earnings ratio over 40 if they cannot meet the two conditions.

The price-to-earnings (P/E) ratio is the ratio for valuing a company that measures its current share price relative to its per-share earnings, according to Investopedia.