Dhaka, Bangladesh (BBN)–Bangladesh’s stock market experts and academics have stressed on strengthening coordination among the regulatory bodies and taking ‘proactive’ measurers, instead of reactive ones, to help stabilise the country’s capital market.
They also emphasised on changing ‘negative mindsets’ of the policy makers, especially the government high ups, about the market’s importance and potential to boost the national economy.
The views came at a roundtable titled “Sustainable Stability and Development of Capital Market” organised by Capital Market Investors National Alliance Foundation (CMINAF), a platform of small investors, at the National Press Club in Dhaka on Saturday.
“There is little coordination among the regulatory bodies (concerned). They hold meetings but as reactive and after occurrence (of incidents). Such corrective measures do not work expectedly,” former adviser to a caretaker government AB Mirza Azizul Islam said as the chief guest.
Mr Islam, also former chairman of the securities regulator, also called for cautious remarks, if any, from the policy makers about the stock market.
Favouring approval of new IPOs in any situation, Mr Islam said that but those companies would have to have good fundamentals. “Shares of more companies reduce the scope of market manipulation.”
He also opined for continuation of the tax rebate for the listed companies on their disbursement of 20 per cent or more cash dividend in the upcoming national budget.
Analyzing the last week’s market trend, Mr Islam saw a ray of indication for growing confidence among the investors.
He identified ‘political stability’ as a precondition to facilitate to restore the investors’ confidence.
Some discussants questioned the transparency in bringing new companies to the market, as, they said, such companies are becoming faded soon after their listing.
About complying banks’ investment exposure limit to the capital market by 2016, some speakers demanded of the central bank authority to extend the deadline to ensure banks’ active participation in the secondary market.
While Dr. Muhammad Abdul Mazid, chairman of Chittagong Stock Exchange (CSE), opined for taking such decision after necessary analysis.
He also called for bringing back the environment of overall confidence in the economy in order to have stability in the stock market.
Regarding the high ups’ attitude to the market, Mr Mazid, also former chairman of National Board of Revenue (NBR), said, “Changing the mindsets (of policy makers) is important to change the capital market.”
Md Helal Uddin, a professor of economics at Dhaka University, opposed to bring new shares to the market saying that the authorities should rather try to increase the demand against the existing oversupply in the market.
Asad Khan, president of Bangladesh Leasing and Finance Companies’ Association, called for ensuring transparency in approving IPOs, having policy consistency and building image of the market by policy makers.
As an inseparable part of the overall economy, the capital market is impacted by the lower money circulation in the economy, said Dr. Hasan Imam of Association of Asset Management Companies and Mutual Funds.
Expressing eagerness of the institutional investors to inject more funds in the market, Mr Imam and Mohammad Ali of Dhaka Banks Securities Ltd urged the authorities to address the challenges they are facing to do so.
Echoing with some speakers, Prof Abu Ahmed demanded immediate passage of the Financial Reporting Act (FRA) to bring the auditors under a disciplined regulation.
He blasted the BSEC ‘for not taking’ actions against the errant auditors, and urged the merchant banks to waive interest of the margin loan taken by the investors in 2010.
Former Dhaka Stock Exchange (DSE) president Rakibur Rahman called upon the authorities concerned to take measures to offload shares of the government entities.
“With the BSEC, we are trying to extend the banks’ exposure limit,” said Md. Rezaur Rahman, deputy managing director of Al Arafah Islami Bank.
President of CMINAF Md Ruhul Amin Akand conducted the roundtable.
Mr Akand placed 21-point demands, including stopping IPO approval with high premium, reducing in the corporate tax rate for listed companies, increasing paid-up capital of merchant banks and withdrawing BSEC’s recent decision on dividend disbursement of margin loan holders.