In two categories of companies, the index rose at the beginning of the day

Loan facilities are available against shares of only two categories of companies listed in the stock market. The two classes are 'A' and 'B'. And among these two categories of companies, only companies with a price earnings ratio (PE ratio) below 40 will get loans. Capital market regulatory body Bangladesh Securities and Exchange Commission (BSEC) has placed this provision in the revised margin (loan) rules to provide loan facilities against shares. The gazette of the revised rules was published last Monday night.

There are five categories of companies listed on Dhaka Stock Exchange (DSE), the country's main stock market. These are 'A', 'B', 'G', 'N' and 'Z'. Among these categories divided by English initials, companies belonging to category 'A' are considered as good quality companies. And 'B' category companies are considered as medium quality companies. Apart from this, 'G' category is for green field companies. Currently there is no company in this category in the market. Class 'N' is reserved for newly listed companies. And 'Z' category companies are considered as poor quality companies. According to the revised margin rules, investors will not get any loan facility for buying green field, newly listed and 'Z' class shares in the stock market. Apart from this, no loan facility will be available for companies listed in SME, ATB and OTC market.

According to the revised rules, investors will not get loan facility even in the shares of 'A' and 'B' category companies. Only companies belonging to 
these two categories whose price-to-earnings ratio is below 40 will be eligible for loan facilities. This price earnings ratio of a share is calculated 
by dividing the company's market price on the last trading day by the sum of the company's last four quarterly earnings per share or EPS. However, 
in the case of companies in the listed life insurance sector, the calculation will be slightly different. In case of life insurance companies, 
the loan will be calculated on the basis of asset value. Investors will get loans on the shares of life insurance companies 
whose market value is not more than three times the total asset value.

Investors will get loan facility for buying shares of more than hundred companies as per the revised margin rules, including companies listed in 'A' and 'B' categories in DSE. Out of which most of the companies belong to 'A' category. Currently there are 195 'A' category companies in DSE. And the number of 'B' category companies is 74. Shares of companies whose PE ratio is more than 40 will not be eligible for loans, so many shares will be considered ineligible for loans even after being classified as 'A'.

Meanwhile, after the publication of the gazette of the revised margin rules, the index rose in the beginning of the day on Tuesday. The index also rose due to the increase in the prices of most of the traded stocks. The main index of DSE, DSEX, increased by 51 points or about 1 percent in the first half an hour of trading on this day. Insurance sector shares dominated the gains in the first hour of trading.