The stockmarket regulator has formed a three-member committee to introduce a flawless index computation method on the bourses.
The Securities and Exchange Commission (SEC) came up with the body after an index development committee earlier submitted a report on flawless index calculation method to the commission.
The SEC asked the new committee, led by the regulator's Executive Director ATM Tariquzzaman, to submit a report to the commission in the next 15 working days.
The commission yesterday issued an office order to this effect, said an SEC official.
The two other members of the committee are Executive Director Md Anowarul Islam and Director Mahbubul Alam.
The index development committee in its report said the General Index of the Dhaka Stock Exchange (DGEN) was 1,900 points higher than the amount that should have been up to June this year.
If other technical faults of the counting system are taken into consideration, the points would be higher, according to the report.
The report also made two recommendations on flawless index computation -- the first one is about eliminating the wrongly added points from the index, and the second is about launching a new index.
The first recommendation will be difficult to implement, while the second one will be easier and more market friendly to put into place, the report said.
The flawed computation in indices first came to light through media reports in January last year, following the trading debut of Grameenphone on the stockmarket in November 2009. Presently, each bourse has three types of indices. The DSE introduced the general index on November 27, 2001 with a base of 817.62 points. The index, which excludes 'Z' category companies, is calculated on the basis of individual stock price movements under the 'A', 'B', 'G' and 'N' categories.
Previously, there was only one index that included all the securities of the stock exchange. Starting with a base of 350 points, the index rose as high as 3,648.75 points on November 5, 1996, when the market witnessed a 'bubble and bust'.
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