As the market is buzzing with investors despite the recent floods and volatile politics, the situation has prompted the capital market regulators to air a note of caution urging the investors not to pay heed to rumours.

The Dhaka Stock Exchange General Index gained 213 points or 16.24 percent in the past one month that has made the Securities and Exchange Commission (SEC) a bit sceptical about the whole affairs.

"All brokers or dealers are requested to strictly comply with the securities laws in conducting trade. All investors are requested not to make their investment decision based on rumours," the SEC said in a letter to all the brokers yesterday.

The capital market watchdog directed both the bourses -- Dhaka and Chittagong -- to air the cautionary note in its daily bulletin of the online trading system.

Talking to The Daily Star, senior SEC officials said they are monitoring the market very closely as the market is shooting up everyday.

"Given the present political scenario after the devastating flood we do not see any reason for market to behave so positively," a top SEC official said.

From August 1 to September 1, he said, the DSE general index went up from 1312 points to 1525 points. The index gained everyday excepting August 22, a day after the deadly grenade attacks on Awami League rally in Dhaka.

The 213-point gain was witnessed in only 23 trading days in August as four days were wasted due to hartal and there were four weekly holidays.

SEC officials said they have strengthened their vigilance and analysis of the trade patterns to detect any abnormal behaviour of the market.

"But so far, we have not come across anything to draw our suspicion," the official said adding the SEC is now contemplating to expedite process of releasing the IPO proposals in the pipeline to cool down the market.

Presently two new products -- ICB AMCL Islamic Mutual Fund and ICB AMCL Pension Holders Unit Fund are in the pipeline awaiting approval of the SEC. Both the funds are expected to raise Tk 10 crore individually.