Dhaka Se Team To Study Bse Risk Management

The top brass of Bangladesh's premier trading bourse will visit Mumbai next week to study the risk managemetn systems at BSE in an effort to revive trading at the Dhaka Stock Exchange after a complete collapse in recent months.

The move gains significance as the Bangladesh government, through its finance ministry and trade/commerce bodies, had sought the advise of senior marketmen including BSE president M G Damani and National Stock Exchange (NSE) managing director R H Patil.

Both Damani and Patil had toured Bangladesh recently to ascertain the crisis plaguing the Dhaka bourse.

After the Dhaka SE officials visit to Mumbai, a two-day seminar will be held in Dhaka where market experts, regulators and ministry officials will discuss and formulate a blueprint for the revival of the exchange.

 

The Dhaka Stock Exchange, which had witnessed a sharp speculative boom at the markets late last year (with the index moving from 1100 to 3600), collapsed after large deals struck in kerb trading were not honoured. As a payment crisis erupted, large foreign institutional players dumped stocks and moved away from the markets which led to a further downslide.

NSE chief R H Patil has already prepared a report suggesting the steps for revival of the exchange. This report comes as a project for the Asian Development Bank (ADB). Damani, who had been first approached by World Bank officials when the crisis erupted, met representatives of the Federation of Bangladesh Chamber of Commerce and Industries headed by Yusuf Harun.

BSE chief also met top finance ministry officials and the capital market regulator, the Securities Exchange Commission of Bangladesh.

BSE chief has advised a complete upgradation of the surveillance and monitoring system including a clampdown on price rigging.

The proposed exchange of ideas will help Dhaka bourse officials familiarise themselves with the existing systems at BSE including the measures to reduce incidence of fake/forged shares, price rigging, collection of margins, monitoring brokers positions and closure of trading terminals.

Following the erosion of market capitalisation at the Dhaka SE, the Chittagong Stock Exchange has also witnessed a downslide in trading fortunes, sources said. However, in recent weeks, the interest from foreign business, trade and industry is on the upswing following reports of huge gas reserves in Bangladesh. The government has also recently invited bids for oil exploration in the country.