Bangladesh Securities and Exchange Commission (BSEC) Chairman Professor Shibli Rubayat Ul Islam has said that a total of 13 banks have formed low-interest special fund to invest in the capital market to further revive it.
“Progress is being made as the Bangladesh Bank has given the opportunity to the banks to form Taka 2.00 billion special fund by each bank to invest in the capital market,” he said.
“Already some 13 banks have passed the proposal for forming such special fund in their boards. These banks are also sending their reports on such investment to the BSEC,” the BSEC chairman added.
The BSEC chairman came up with the statement while addressing a resurgent dialogue on the impact of coronavirus and to overcome it as the chief guest, reports BSS.
Resurgent Bangladesh in association with the Metropolitan Chamber of Commerce and Industry (MCCI), Dhaka Chamber of Commerce and Industry (DCCI), CSE and Business Initiative Leading Development (BUILD) organised this dialogue.
Moderated by MCCI President Barrister Nihad Kabir, CSE Chairman Asif Ibrahim gave the welcome address. CSE managing director Mamun-ur-Rashid made the key-note presentation.
BUILD Chairman Abul Kasem Khan, DCCI President Shams Mahmud, Policy Exchange Chairman Dr Masrur Reaz, Apex Footwear Ltd managing director Syed Nasim Manzur, DSE managing director Kazi Sanaul Haque, BAPLC President Ajam J Chowdhury, BRAC Bank managing director Selim RF Hossain, ICB managing director Abul Hossain, Economic Reporters Forum (ERF) General Secretary SM Rashidul Islam spoke, among others, at the dialogue.
Earlier in February, the Bangladesh Bank allowed banks to form a Tk 2.00 billion special fund each by taking low-interest loans from the central bank to invest in the stock market.
Shibli informed that efforts are going on so that the other banks could form such special fund while the Bangladesh Bank would extend necessary support in this regard.
Mentioning that the investment to the capital market could be hampered to some extent due to some conditions in the gazettes issued by the central bank on special fund, he said that a letter has already been put forwarded to the central bank to reconsider these conditions.
The BSEC chairman informed that he would hold discussion with the central bank to increase the exposure of the non-banking financial institutions to the capital market alongside the banks.
“Besides, a request will be made to the ICB to extend low-interest funding so that it could play a greater role in the capital market,” he added.
Noting that his commission is putting higher priority on establishing good governance and automation in the capital market, Shibli said, “Once there is automation, there will be ease of business, while it will also save time and cost of the stakeholders. Good governance and transparency will be brought to the market and thus it will be possible to extend the coverage of the market. Hopefully, we’ll be able to see a dynamic capital market after two years,”
The BSEC chairman said the fundamentals of many companies which hit the market over the last couple of years are not good while many companies have passed their IPOs through submitting their fake papers at the BSEC.
The perpetrators of such incidents are being identified and thus being brought to book so that none could dare anymore to commit such crime. He also sought cooperation from all to increase the standard of audit reports to stop such tendency.
Shibli also informed that the Ministry of Commerce has been served a letter to incorporate such provision while amending the Companies Act to launch the much hyped buy back method.
Highlighting the importance for developing the bond market, he said, if this market is developed, then the companies would need not to rely on the banks for long-term financing while the pressure on the banks would also be reduced.
He opined that with this, the problem on long-term financing would be mitigated to a great extent after taking short-term deposit.
Alleging that some of the foreign investors are not playing their due responsible role in the capital market, Shibli said many of the foreign investors make long-term investment and it is good while the Commission also wants to encourage them.
But, he alleged that some of the foreign investors want to make more profit through forgery after making short-term investment. “We’ll take action in such incidents,”
In order to further rejuvenate the capital market, CSE Chairman Asif Ibrahim stressed the need for making the corporate governance better and also to bring those companies which gave good dividends in the past.
BUILD Chairman Abul Kasem Khan called for strengthening the bond market.
Policy Exchange Chairman Dr Masrur Reaz laid importance on developing the capital market.