With the General Index on the Dhaka Stock Exchange (DSE) hitting all time high, the capital market watchdog yesterday urged investors to invest in stocks cautiously.

“The continuous upward trend does not reflect the sign of a sound market," Faruq Ahmad Siddiqi, chairman of Securities and Exchange Commission (SEC), told

reporters at his office in Dhaka.

He said the investors should invest carefully as the market is now behaving abnormally.

The DSE General Index, the benchmark index, yesterday crossed 2800 points for the first time to end the day at 2802.6 points, up by 40.23 points, or 1.45 percent, on its close on Monday.

The DSE AU Share Price Index also recorded an all time high at 2332.34 points, up by 35.38 points,

or 1.54 percent, on its previous trading day's closing.

Meanwhile, the stock market regulator has formed separate bodies to investigate allegations of stock price manipulation by two merchant banks and two brokerage houses, according to sources.

In the wake of bullish trend in stock market, the SEC received allegations that the merchant banks and brokerage houses were

giving excess loans to individual investors in violation of margin loan rules.

Market insiders said in the last several days individual investors were very active. Usually the market gains momentum when institu -tional investors play active role.

The DSE will remain closed from today [October 10| to Monday [October 15| on the occasion of Eid-ul-Fitr.