World Business News Tuesday

Dhaka stocks continue to slide
on mutual funds fall
Sadat Sayem

Dhaka stocks closed downbeat on Monday for the second day in the week as investors sold off their holdings unnerved with the recent downtrend at the market, said market operators.
The general index of the Dhaka Stock Exchange lost 29.74 points or 0.98 per cent to close at 2990.56 while its blue chips index, DSE20, shed 41.81 points or 1.61 per cent to finish at 2556.39.
A merchant bank official said bearish market trend in recent weeks drove the investors to take cautious move. Mutual funds suffered further losses over media reports that the Securities and Exchange Commission was unlikely to rescind its decision on closed-end mutual funds to bar them to increase their sizes through issuing bonus or right shares, he said. There was a speculation at the market that the regulatory body might rescind its decision on the issue, he added.
A group of retail investors on Sunday formed a human chain in front of the DSE building in protest against the SEC decision baring closed-end mutual funds to increase their sizes. Earlier on June 29, a group of retail investors staged a half-an-hour demonstration in front of the DSE building being upset with the fall in share prices following the SEC decision on closed-end mutual funds. In the previous day, a group of retail investors at a meeting held in the Dhaka city also protested at the SEC’s latest decision on the closed-end mutual funds.
The share prices of the mutual funds suffered heavy losses last week due to the SEC decision and retail investors were worst losers as they bought shares at higher prices, the demonstrating investors said.
On June 26, the SEC at a meeting decided in principle to amend its mutual fund rules to bar closed-end mutual funds from increasing their size.
Dhaka stocks ended last week downbeat as investors remained unnerved due to the SEC decision on closed-end mutual funds. Market lost steams also in previous two weeks due to selling pressure from investors frustrated with the DSE’s market cooling measures.
Of the total 229 issues traded at the DSE, 75 posted gains, 145 declined and nine remained unchanged.
Turnover at the DSE decreased to Tk 255.04 crore from the Sunday’s Tk 312.8 crore.
ACI topped the turnover leaders with a total transaction of Tk 15.18 crore.
Square Pharmaceuticals, LankaBangla Finance, Beximco Pharmaceuticals, Aims 1st Mutual Fund, Apex Adelchi Footwear, Fareast Life Insurance, Keya Cosmetics, BRAC Bank and Beximco were the top 10 turnover leaders.
Normal trading of the shares of the Titas Gas Transmission and Distribution Company Ltd resumed on Monday. A total of 55,650 shares worth Tk 2.39 crore of the state-owned enterprise were traded at the DSE.
The trading of the shares of Titas Gas remains closed on Sunday to allow the market to distribute shares that were traded since its debut on July 2.


Bangladesh pays $591m to ACU
for May-June transactions
Staff Correspondent

The Bangladesh Bank has paid $591 million to the Asian Clearing Union to settle its transactions with other member countries.
Bangladesh makes payments every two months to settle trade balances with Bhutan, India, Iran, Myanmar, Nepal, Pakistan and Sri Lanka, said a BB official.
The total transactions in May, channelled through the ACU, amounted to $1,683.10 million, showing a decrease of 5.87 per cent from April 2008, according to the ACU’s website.
However, in comparison with the corresponding figure of the previous year, there is an increase of 15.38 per cent. The credit positions of the three largest creditors — the Central Bank of the Islamic Republic of Iran, Reserve Bank of India, and State Bank of Pakistan — were $1,082.36, $528.29, and $37.07 million respectively, accounting for 64.31, 31.39, and 2.20 per cent of the total transactions.
The debit positions of the three largest debtors — the Reserve Bank of India, Bangladesh Bank and Central Bank of Sri Lanka — were $976.54, $291.85 and $224.67 million respectively, representing 58.02, 17.34, and 13.35 per cent of the total transactions.
The Asian Clearing Union, at a board meeting held last month, decided to introduce the euro as an alternative currency from January next year to ease import payment settlement, said Salehuddin Ahmed. The eight-member ACU is now only using the US dollar as the settlement currency.
The new system will widen the avenue of the payment system among the members and increase regional trade and cooperation, said the governor to the press after attending the meeting.
‘Some members of the union are facing problems in settlement by dollars and they requested the other members to adopt the euro as the second currency for opening letters of credit,’ he said.
Adoption of the euro as an alternative currency will benefit especially countries like Iran and Myanmar, on which the US has imposed embargo.
It is expected that after adoption of the euro, local importers can open euro-denominated letters of credit with the banks of Myanmar and Iran, the governor hoped.