10 firms slip from DSE blue-chip index
The Dhaka Stock Exchange (DSE) has announced the removal of 10 companies from its blue-chip index, DS30, due to their failure to meet specific requirements.
This semi-annual rebalancing will take effect on 21 July with 10 new companies being inducted as members of the DS30, the DSE said on Tuesday.
Although most of the removed companies had sufficient market capitalisation, they did not meet the stock trading or turnover criteria, largely due to the slowdown in the capital market, DSE officials said.
The companies that will be included in the DS30 are Beximco Pharmaceuticals, Pubali Bank, City Bank, Bangladesh Steel Re-Rolling Mills, Robi Axiata, Orion Pharma, Summit Power, Power Grid Company, GPH Ispat, and Linde Bangladesh.
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The stock exchange will drop AND Telecom, Bashundhara Paper Mills, Eastern Housing, Green Delta Insurance, Intraco Refueling Station, Kohinoor Chemicals Company, Marico Bangladesh, Sonali Paper & Board Mills, Trust Bank, Uttara Bank Ltd from the index.
According to the Bangladesh Index Methodology of DSE, designed and developed by S&P Dow Jones Indices a decade ago, DS30 was constructed with 30 leading companies which can be said an investable Index of the exchange. The DS30 reflects a large portion of the total equity market capitalisation.
The criteria considered in constructing these Indices are market capitalization, liquidity, financial viability, and base value of the companies.
The companies must have a float-adjusted market capitalisation above Tk50 crore as of the rebalancing reference date.
The DS30 stocks must have a minimum three-month average daily value traded of Tk50 lakh as of the rebalancing reference date.
Liquidity criteria can be reduced to Tk30 lakh in certain circumstances to ensure it has enough constituents in the index.
At each semi-annual rebalancing, if a current index constituent falls below Tk50 but is no less than Tk30 lakh, then the stock remains in the index provided it also meets the other eligibility criteria.
The DS30 stocks must be profitable as measured by positive net income over the latest 12-month period, as of the rebalancing reference date.
The figure is calculated by adding the latest four quarters of net income reported for the company.
All listed DSE stocks are classified according to the DSE Industry Classification system. The number of constituents in banks, financial institutions, the insurance sector, the real estate sub-sector of service and real estate sector, pharmaceuticals and fuel and power is capped at 5 each and 20 combined for the DSE Bangladesh 30 Index. And the base value is 1000 for the DS30 Index, according to the methodology.
The Dhaka bourse currently computes three indices - the DSE Broad Index (DSEX), the DS30 and the shariah-based DSES index. None of the DSE Indices include mutual funds, debentures and bonds.
